Governor Pataki yesterday vetoed a bill that would have raised the state minimum wage to $7.15 an hour from $5.15 an hour by 2007.That was a smart move. Raising the minimum wage is not a good way of raising people out of poverty, but it is a good way of hurting small businesses and putting low-wage earners out of work entirely.

A recent Cornell University study has estimated that raising the minimum wage in New York would cost businesses $880 billion. Who would have profited from a raised minimum wage? Teenagers, especially those from middle-class families, make up one-quarter of minimum wage earners. On the other hand, small businesses without deep pockets would be hurt – and would respond by laying off workers, cutting hours, and doing less hiring. At the same time, raising the minimum wage attracts higher-skilled workers to traditionally low-wage jobs, further squeezing low-skilled, low-income adults. A University of Wisconsin study has found that 20% fewer women on welfare work in states where the minimum wage is above the federal level.

The minimum wage is an entry-level salary, and studies show that most workers who start at that level get a raise within a year. Workers at the bottom end of the pay scale get more and proportionally bigger raises rate than anyone else. That makes sense. Time on the job makes workers more productive and more valuable to employers, who respond by paying more. And that’s without government intervention.

Mr. Pataki will certainly be criticized for saying no to a law that is but a feel good. Call it the wages of leadership. In a just world he’d be commended for taking a stand against a measure that hurts small businesses without helping its intended beneficiaries.