Building an Economy that Works for Everyone

Marilyn Watkins: Training wage is bad policy

Good morning. I am Marilyn Watkins of the Economic Opportunity Institute. Thank you for allowing me to testify this morning against H.B. 1258 and the institution of a training wage below Washington’s minimum wage.

Allowing a sub‐minimum wage during the first 680 hours of employment could potentially impact a large share of Washington’s workforce. It would reduce economic security and buying power for low wage working people and their families and increase turnover,thereby adding to costs and reducing profitability for our state’s businesses.

According to Bureau of Labor Statistics publications:

  • 19% of all workers had been with their current employer fewer than 12 months in January 2010. That figure is lower than usual now because of the recession. In 2006,fully 24% of employees had been with their current employer less than 1 year.
  • Over the past decade,median job tenure for all U.S. employees has been about 4 years, meaning half of all workers have been with their current employer a shorter period of time.
  • Sectors with the largest number of minimum wage jobs tend to have higher rates of turnover. In retail,median job tenure is about 3 years. In restaurants, it is about 1.5 years.

Higher minimum wages do not reduce the number of jobs available. Some earlier research indicated that there might be a small amount of job loss associated with raising the minimum wage. However, those studies failed to take into account regional variations and long term trends. The most recent, economically sophisticated studies take into account regional variations by pairing contiguous counties across state borders – for example Spokane and Coeur d’Alene, and by controlling for long term growth differences among states.2 Contrary to earlier minimum wage studies,these newer studies find no significant impact on employment numbers resulting from minimum wage increases.

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