Attack poverty intelligently

The best way to fight poverty is to increase the opportunities for low-skilled workers to obtain more education and training, not to raise the minimum wage.

Gov. Jon Huntsman Jr., has launched a task force to study whether Utah's minimum wage, which is tied to the national minimum of $5.15 an hour, should be raised. Frankly, it's disappointing to see the new governor has such little understanding of basic economics. It was also disappointing to see that voters in Nevada recently passed an initiative that made the ridiculous claim that, "Raising the minimum wage is the best way to fight poverty."

It certainly is not. If it were, government could simply raise the minimum to $100 an hour, with the slogan of "A Porsche in every garage!" But any honest observer would concede that the resulting inflation and job loss eventually would make $100 an hour fairly close to the equivalent of today's $5.15. The issue here, after all, is just a number with a constantly changing value.

That is a concept few people bother to consider, which is why the minimum wage remains such a popular political issue. Look at it this way: Today's minimum wage would have translated to 46 cents an hour in 1940, but a $5.15 wage in 1940 would be the equivalent of $57.18 today. Those are meaningless figures unless they are compared on the basis of the amount those figures could purchase. But even that comparison would have to take into account the goods available today that weren't even invented yet in 1940.

An increase in the minimum wage today would do little other than move that meaningless number a little bit again. In real terms, however, it would cost jobs on the lower end of the wage scale and give prices overall a slight boost. The net result may be hardly measurable, considering most Utahns already earn more than the current minimum wage, but it would certainly not help the state's poverty rate, either.

True, Utah's wages remain generally below where many would like them to be. That won't change by forcing people to pay more. Even though Utah is only a part of the national economy, it does not exist in a vacuum. An artificial boost in wages here would affect jobs and economic development relative to neighboring states.

However, an emphasis on training and education would do much to boost the earning power of people who currently have few skills. So, by the way, would tax reform that removes much of the state tax burden from the poor.

State lawmakers would get far better results from dramatically increasing the funding to adult education classes that help provide high school equivalency diplomas and that help adults overcome illiteracy and a lack of English proficiency. That would attack the problem, not its symptoms.