Minimum Wage Question Fails to Consider Consequences

Marcos Lopez

Question 2, as we noted in our last minimum wage piece, is as much about health care as the minimum wage. Currently, the minimum wage for hourly employees who are offered health care insurance is $9.50, and those who do not receive benefits earn $10.50.

If the ballot initiative passes tomorrow, it would change the state constitution by removing the language that allows for a different minimum wage between workers – based on whether a company offers benefits – enshrining a $12 minimum wage in the constitution and ending cost-of-living adjustments. It would also ensure the state’s minimum wage meets the federal wage requirement if it were to increase.

But how did Nevada end up with the nation’s only two-tiered minimum wage?

The pay distinction was put into place by a 2006 voter-approved constitutional amendment pushed by the AFL-CIO, which excluded itself from the increase by making sure there was a carveout for workers operating under a collective bargaining agreement.

While two-tiered systems are bad policy, the really interesting nugget comes from the advocates for the passage of Question 2, like Battle Born Progress, who argue that Question 2 should be passed because health care plans being offered employees are “unaffordable garbage.”

That’s a weird way to admit Obamacare failed.

Remember when the Affordable Care Act was passed, and we were promised we would see lower premiums and better care across the board? Just over 10 years after its passage, it’s hard to say it worked.

According to the Department of Health & Human Services, premiums have doubled for individual health insurance plans since 2013, the year before many Obamacare regulations and mandates took effect.

Group coverage is not doing much better. The Left’s own admission that some plans are “unaffordable garbage” will likely not come with an admission that we are largely still living under the framework they created.

We will, however, get more ways to make health care worse, such as SB420, which passed last session, putting us on a course to creating a government-run health care “public option.”

One wonders if this was not an attempt to ensure fewer low-skilled workers are offered health care to build support for a “public option.”

The Right needs to brace themselves for a fight that’s just heating up on health care. The failures of Obamacare and top-down one-size-fits-all approaches to health care must be articulated and, in its place, replaced with a patient-centered free-market approach where competition is reintroduced to empower consumers.

We cannot fumble another attempt at health care reform; the cost is too high.

History Repeats?

Unfortunately for those interested in remaking health care in the U.S., we have a tendency to repeat bad policy again and again.

Consider the minimum wage thrust of Question 2. Despite ample evidence from national minimum wage data that shows how ineffective this policy is at helping improve the lot of lower-income families, the Left keeps bringing forth measures like Question 2 because too often bad policy makes good politics.

A key component of the Left’s coalition has been young adults (under 30 years of age), and they are betting on more of them, enticed by the potential of higher wages, to turn out on election day. The irony is that there is a strong body of research indicating that minimum wage policies reduce overall employment and have no negligible impact on reducing poverty.

Whether it’s reduced benefits, hours or being laid off, we know how this story ends – the good intentions of YES voters on measures like Question 2 never materialize. We might be able to bend the law of supply and demand in our favor at times, but we can never break it.

As we approach almost a century of minimum wage laws in the United States, I am reminded of what Thomas Rustici wrote in a Cato Journal article titled A Public Choice View of the Minimum Wage: “The question is no longer if the minimum wage law creates unemployment but how much current or future increases in the minimum wage will adversely affect the labor market.”

This is particularly important to think about as we are likely about to enter an economic downturn. As our minimum wage continues to increase, we need to ponder how much worse the downturn will be and how much longer recovery will take.

Nevada has been in a similarly perilous situation before. Let’s rewind to 2006 when voters approved the current minimum wage amendment. As the minimum wage increases began, the financial crisis hit. This, compounded with a massive tax hike from Carson City and the Bush/Obama stimulus packages, led Nevada’s unemployment rate to tick up for 53 straight months – even as other states started to recover.

It’s been said that history doesn’t repeat but it does rhyme. I hope Nevada never has to experience another period like the Great Recession, but the road to economic hell is paved with good intentions.

Marcos Lopez

Marcos Lopez

Policy Fellow

Marcos Lopez serves as a Policy Fellow for Nevada Policy. For over a decade, Marcos has fought to advance free-market principles, limited government, and secure individual rights through electioneering, lobbying, and grassroots mobilization at all levels of government across nine states and Washington D.C.

Originally from Miami, Marcos moved to Nevada in 2015 and has lived in Reno and Las Vegas, where he currently resides. His main areas of focus include economic opportunity, criminal justice reform, and school choice. Marcos’ work and efforts have been recognized and featured in The New York Times, The Las Vegas Review Journal, The Nevada Independent, This is Reno, and The Nevada Current.