Many states are taking actions to increase their state’s minimum wage above the federal minimum wage which is currently $7.25 per hour. We tend to think that industries that traditionally pay minimum wage are the only ones effected. Industries like restaurants, retail and hospitality. However, could there be a domino effect to other industries?
Generally, people seek additional education, training and certifications for monetary reasons. The additional education may lead to a better paying job. What happens if that incentive is removed or
reduced? Consider the job of a phlebotomist, a healthcare worker that draws blood. This position typically requires additional education and a certification. The starting pay for a phlebotomist in Oklahoma is about $10.50 per hour (source: Sokanu). Oklahoma’s minimum wage is $7.25 per hour. Therefore, there is a $3.25 per hour incentive for a person to obtain the education to be a phlebotomist. What would happen if Oklahoma changed its minimum wage to $9.00 per hour? Would the starting wage of the phlebotomist need to be increased to maintain the incentive or would the new $1.50 per hour incentive be enough?
Consider the following table. Phlebotomist wage data is from the Bureau of Labor Statistics. Historical average starting wages were not available, therefore, historical average wages were used. 2018 data were not available as of this writing.
| State | 2016 Min Wage | 2017 Min Wage | % Change | 2016 Ave Phleb Wage | 2017 Ave Phleb Wage | % Change |
| Arizona | 8.05 | 10.00 | 24.0 | 14.72 | 15.59 | 5.9 |
| Arkansas | 8.00 | 8.50 | 6.3 | 13.42 | 13.82 | 3.0 |
| Oklahoma | 7.25 | 7.25 | 0 | 14.20 | 14.51 | 2.2 |
Statistical anomalies and other factors may affect the data, but it does appear there is a correlation between an increase in the minimum wage and an increase in the average wage of a phlebotomist. I postulate that the effect on starting wages would be even greater. It will be interesting to see if Arkansas eventually passes Oklahoma in average wages of a phlebotomist.
There may be other types of occupations that require this monetary incentive. Perhaps some other occupations in healthcare, manufacturing and transportation.
Takeaways for the Business Owner
Your business may be affected even if you currently pay your employees above a newly increased minimum wage. The supply of some skilled workers may be reduced if the incentive to obtain additional education, training and certifications is reduced. Starting wages may need to increase to maintain the incentive and attract new employees.