The $10 Minimum Wage – A Cautionary (and Ironic) Tale

by Rob Roper

The Vermont minimum wage rose to $10 an hour on January 1 2017. California provides us with a unique teachable moment on this issue – one filled with some wonderful left-wing irony.

A group of very liberal actors, including Ed Asner and Ed Harris, is protesting a move to make small local theaters pay actors and other theater workers $10 an hour for their work. California had a minimum wage exemption for theaters with 99 seats or less. Yes, those on the left like to exempt themselves from the regulations they like to impose on everyone else, but I digress….

The reason the $10 minimum wage is so damaging, these activists explain, is that it will drive these small theaters out of business and actors out of work, depriving them of critical opportunities to gain valuable experience. What? For other small businesses the minimum wage is supposed to unleash some kind of economic and hiring boom, but I digress again….

One theater owner/producer lamented, “The cost of paying four Equity actors to do a weekend of “Gardel’s Tango” performances went from $132 a show to $429. Mr. Lacey said he couldn’t have afforded to pay his cast minimum wage for the 150 hours they rehearsed.” And that one response to the new rule would mean “a lot more one man shows,” (WSJ) or, in other words, fewer jobs.

Opponents of the minimum-wage requirement argue, “it puts pressure on an ecosystem that already operates on a shoestring budget,” and “actors accept shows at measly pay in lieu of costly acting classes.” One explained, “If you want to do a new play, you can do it and see if it has legs for a tenth of what it costs in New York.” You mean these businesses can’t just absorb the added costs of the higher wage? Consumers won’t just pay more for a ticket? Astonishing.

So, the lessons to be learned here are that for employees work has a value beyond the wage received, namely marketable experience, and for employers this kind of flexibility allows for expanded opportunity and experimentation at low cost/risk. And, of course, the consumer benefits from this as well as they get to see a new play with new faces at an affordable price.

This dynamic holds true for lots of businesses, not just theaters. I can’t wait to see Misters Asner and Harris reemerge on the activist scene as free market warriors. I’d pay a premium to see that play! Let’s put it on at the Flynn in Burlington.

– Rob Roper is president of the Ethan Allen Institute.

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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
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