The 'cascade' effect of minimum wage

Lost in the debate about the $15-an-hour minimum wage is the "cascade" effect. If a $10/hour employee gets a 50 percent increase to $15/hour, then those with higher skills earning $11 to $14.99 per hour are going to ask, "Where's my 50 percent raise?"

The employer, besides increasing automation, may just fire all employees whose skills aren't at the new level, and hire on those who do have $15/hour skills.

Second, as the wage earner is paid more, then some government benefits decrease or disappear such as food, housing, healthcare earned income credit. The employee earning $10 an hour may also have noncash benefits of several more dollars per hour worked, so their "real" after-tax income may decrease from the former level.

I agree that an indexing of the minimum wage based on local cost of living is worth exploring. Finally, the minimum wage is intended to be one for low-skilled workers entering the workforce. As workers gain skills, then employers generally recognize this with raises to the value of the work performed.

Finally, when the Obamacare program defines full-time work requiring employer benefits at 30 hours per week; 40 hours used to be the norm; then employers will reduce workers' hours below 30, to avoid paying benefits.

Mason Holmes

Glen Ellyn