Sunday, April 03, 2016

Is there ever a good time to raise the minimum wage?

Rob's comment:

Whenever there's a serious proposal to raise the minimum wage, there's the same exasperating "debate." Conservatives and business groups always argue that giving the lowest paid workers a raise will actually hurt the working poor. 

But when exactly do those folks think raising the minimum wage is a good idea? The answer: never. They think it's a bad idea when the economy is doing poorly, and it's a bad idea now when the economy is doing well.

Who is Douglas Holtz-Eakin? President of the American Action Forum. He thinks Obamacare should be repealed. He doesn't think the working poor deserve either a raise or medical care.

See also this.


At 6:51 PM, Anonymous Gregski said...

Rob, as is commonly the case you are accurate. This time it's when you claim that the right wing never favors a minimum wage under any circumstances. If you were to give a serious, thoughtful, honest answer to the question, "If a $15 minimum wage is a good idea why isn't a $15,000 minimum wage a better idea?" you would be the first of my left wing friends and acquaintances to do so.

This makes sense, since any thoughtful answer would contain the presupposition that at SOME high-enough level, a minimum wage will provoke unemployment for many who would be willing to work, and be paid, a lower wage. In my view it is conceited for anybody to claim to know a single dollar figure that will maximize low-skill compensation AND employment across ALL industries 3 or 5 years from now, as if such a universal figure could ever exist.

Yes, there is no good time for a minimum wage. In other words, it never adds widespread value. If it is set lower than the prevailing unskilled market wage it is simply a waste of time as it changes nothing. If it is set higher then it will stimulate a contraction in employment, effectively denying opportunity for willing, unskilled workers to join the workforce, gain experience, and grow.

Minimum-wage advocates effectively value one type of employment (full-time; cash-rich employer; head-of-household; industries with inelastic demand) over another (part-time; single, young, starting out; low-margin businesses with no pricing power). While the minimum wage can be shown to benefit some of the former (if their industries can sustain it) it gives the middle finger to the latter.

As in so many discussions the difference between Right and Left comes down to values. The Right values individual participation in productive enterprise, period. The Left values a guaranteed livelihood. And if any job doesn't provide it then that job is not worth having or doing in our country.

At 8:39 PM, Blogger Rob Anderson said...

But there's also a factual issue here. I admit I don't know the literature on the minimum wage well enough to know whether it is in fact true that raising the minimum wage causes job loss. That's the claim that conservatives and the business community always make, but then they would wouldn't they? For ideological reasons and/or reasons of self-interest.

But I can't remember ever hearing a conservative or a business person say that, yes, now is a good time to raise the minimum wage. As an old man, I've heard them making the same argument for 50 years now, that in effect grass is going to grow in the streets if we give the working poor a raise. That means their credibility with me is non-existent.

Whether it's true or not that raising the minimum wage costs jobs, it has to be done periodically so that Democrats, unlike Republicans, can show that they care enough to do something about income inequality.


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