Editorials, Opinion

Capito’s trade-off: Higher wages, but no illegal workers

U.S. Sen. Shelley Moore Capito is one of six Republicans sponsoring the Higher Wages for American Workers Act, which would gradually increase the federal minimum wage over the course of five years to $11 per hour. After that, the federal minimum wage would be indexed to inflation.

If you’re surprised, we were, too. The last federal minimum wage increase was in 2009, and at that time, it was set at $7.25 an hour. Many states do offer a higher minimum wage (West Virginia’s is $8.75), but 13 states only match the federal wage; five states  don’t have a minimum and two states have minimums lower than the federal standard, making $7.25 the default in those seven states.

The Higher Wages Act would start at $8 per hour, effective January 2024, and increase it by 75 cents every year until it reaches $11. From then on, every two years, the U.S. Secretary of State will use the Consumer Price Index to determine the next increase, so minimum wages will keep up with inflation. Small businesses with fewer than 20 employees (including individual franchises) will start the increase at $7.75 per hour and increase in 50-cent increments until six years after the effective date. At that point, they will have to meet the prevailing wage.

We’d like to see a provision added that raises the base wage for tipped employees. Right now, the federal minimum “cash” (read: employer paid) wage is $2.13 per hour. (West Virginia requires $2.62/hour). So-called tipped workers, like waiters, deserve to make a decent wage. And maybe establishing a higher employer-paid cash wage will help get this outrageous tipping culture under control.

Of course, there is a caveat to the Higher Wages Act — the bill would also crack down on “illegal” workers by forcing all businesses to check a potential employee’s work status with the national E-Verify system.

According to the bill, “Any person or other entity hiring, recruiting, or referring an individual for employment in the United States shall utilize E-Verify” to confirm if an applicant is authorized to work in the U.S. In fact, the bill dedicates most of its 74 pages to laying out the whos, whats, wheres and whens of using the E-Verify system and establishing four-to-five-figure penalties for violations.

Fighting the imaginary scourge of supposed illegal immigrants stealing Americans’ jobs has long been a conservative priority. In reality, though, unauthorized workers account for less than 5% of the labor force (as of 2018, the most recent data), and they tend to work the jobs that most Americans don’t want, such as in agriculture, construction, child care and hospitality. Economists have warned that eliminating illegal workers — especially those unlikely to be replaced by legal workers — could cause the economy to contract.

In 2019, the Cato Institute analyzed E-Verify’s impact on the states and counties that used it — some for all employers, some only for public employers and others on a volunteer basis — and came to this conclusion: “… most businesses refuse to adopt the program”; of the four states that have mandatory E-Verify, none were able to uniformly enforce it; and “E‑-Verify has harmed nearly three quarters of a million legal workers and has not stopped illegal employment.”

Capito and her colleagues had the right idea about increasing the minimum wage and indexing it to inflation, but their insistence on mandatory E-Verify use is more likely to hurt America’s workers and economy than it is to help.