Raising the minimum wage

December 20, 2006 at 12:19 pm

President Bush today said he supported raising the minimum wage:

President George W. Bush said on Wednesday that he supports a Democratic proposal to increase the U.S. minimum wage but said it should be coupled with tax and regulatory relief for small businesses.

“I believe we should do it in a way that does not punish the millions of small businesses that are creating most of the new jobs in our country,” Bush told a news conference. “So, I support pairing it with targeted tax and regulatory relief to help these small businesses stay competitive and to help keep our economy growing.”

Democrats, who took control of Congress in November elections, have said they will push to raise the minimum wage over two years to $7.25 per hour from $5.15 per hour.

Bush appears to have GOP congressional backing as well. This statement was released today from Senate GOP leader Mitch McConnell:

An increase in the minimum wage needs to help both the workers who earn it and the small businesses that pay it. That’s why it just makes sense to pair the increased wage with tax and regulatory relief to help the small businesses that provide most of the jobs in this country stay competitive and employ even more people. The President laid out a commonsense approach to this issue, one that the Congress can pass in a bipartisan way.

But what nobody is talking about is consequences of raising the minimum wage. Heritage’s Tim Kane:

After decades of experience, everyone should know that regulating the price of labor is identical to any other price control and an especially crude way to “fix” free markets. Raising the minimum wage will hurt low-income workers, cost jobs, and hobble the American economy. Congress should know by now that bucking the laws of economics does not work.

Roseanne Barr wants Congress to raise the minimum wage

October 24, 2006 at 10:51 am

Andy Roth points to the below video in which Roseanne Barr teams up with the AFL-CIO and ACORN to pitch a raise in the minimum wage.

Andy writes:

In this video, they interview “Erin”. She actually earns more than the minimum wage, but not much more. She says she is single, has no kids, and lives with her parents. And she works loooong hours, almost 40 hours a week! Every week!

But cheer up if you feel sorry for Erin. She doesn’t know what she wants to do right now, job-wise or school-wise, but she says she’ll probably go and get a 2-year degree so that she can get a better job, one that pays more than the minimum wage. She expressed interest in being a pharmacy tech.

As Roseanne Barr says after the interview, “Pretty depressing, huh?”

Okay, without the sarcasm, I hate to make light of Erin’s situation. If she’s really having problems, I don’t mean to gang up on her. But from what she said in the video, I think she’s just a young kid who’s working hard to improve her lot in life. And she’s moving in the right direction. Go Erin!

Roseanne Barr is another Hollywood liberal meddling in affairs she knows nothing about. If Barr and her cohorts got their way, rather than helping Erin, they would hurt her because, as so often is the case, liberal policies wreak havoc on the lives of the people they purport to help.

The Heritage Foundation’s Tim Kane explains:

A survey published in the Winter 2005 Journal of Economic Perspectives, an academic publication, reports that 71 percent of economists at America’s top universities agree with the statement “a minimum wage increases unemployment among the young and unskilled.” About one-third of the economists agree outright, and another third agree with reservations. Think about that: the consensus among top economists is that the very existence of a minimum wage harms those who, according to its supporters, need it most.

Here is another paper worth reading on this subject in which James Sherk concludes:

Due to unintended effects, a law can achieve the opposite of its supporters’ intentions. The minimum wage is such a law. It is intended to reduce poverty, but it does not. Instead it encourages teenagers to drop out of school and reduces low-income workers’ future job prospects and earnings. Good intentions are not enough. Congress should not pass a destructive minimum wage hike that will harm the most vulnerable American workers.

I am all for helping people like Erin. But it is not the federal government’s job to do that by passing terrible legislation. And to be certain, a misguided, silly liberal policy like raising the minimum wage will hurt rather than help.

Sadly, should Dems win back the House, prepare for this policy to become law.

Morris: GOP Must Raise Minimum Wage

August 2, 2006 at 9:52 am

I don’t think that the minimum wage issue moves many votes, especially given the pervasiveness of Iraq (and Lebanon, and North Korea). However, Morris is always interesting - and often right. And he is right that Democrats will surely run commercials contrasting estate-tax relief with the status quo on the minimum wage. In a close election in a swing district, I suppose such an attack might move some votes.

Morris’ column is here.

Cross-posted by the Editor at IP at the Influence Peddler.

House conservatives oppose minimum wage hike — Leadership doesn’t care

July 28, 2006 at 10:41 am

Members of the Republican Study Committee have officially put their GOP leadership on notice as to their opposition to scheduling a vote on an increase to the minimum wage — read their letter here.

But as Congressional Quarterly reports, their efforts may not be good enough to overcome the squishiness of the GOP’s powerful mushy middle:

Over the course of 48 hours, prospects for a pre-recess vote to raise the nation’s minimum wage shifted from unlikely to probable — a change driven by the fears of House Republicans who know their election opponents will pounce if Congress fails to act.

“A minimum of 30 members need that vote so they don’t get skewered and barbecued over the summer break,” said Rep. Ray LaHood, R-Ill. “They know the 30-second commercials have already been cut.”

Members of the party’s small moderate faction spurred their leaders to action by making a credible threat: They notified leaders on July 26 that they would prevent the House from adjourning for the August recess until a minimum wage boost was considered on the floor. By late Thursday, the House appeared close to a deal. The Rules Committee passed a resolution allowing for a minimum wage bill to be considered Friday.

UPDATE: My Heritage Foundation colleague Mike Franc debunks the myths surrounding the minimum wage and explains why it would actually hurt low-wage workers:

An enduring urban legend about minimum-wage workers is that they are married adults struggling to raise children in Dickensian-style poverty. As Kennedy said in a recent Senate floor speech, “Minimum-wage workers are forced to make impossible choices between paying the rent and buying groceries, paying the heating bills or buying clothes.” Their families, he said, lack health care and adequate housing. Their “daily fear” is “poverty, hunger and homelessness.”

The data, however, tell a very different story. While some minimum-wage workers are primary breadwinners raising young children, the overwhelming majority are either younger workers honing their skills in entry-level positions or part-time, mostly female workers from middle-class homes supplementing their spouse’s income.

Read the rest here.

GOP moderates win the day (again)

July 27, 2006 at 1:34 pm

It looks like GOP House leadership is preparing to cave to GOP moderates and Democrats on the issue of minimum wage. Erick Erickson at Red State reports that GOP leadership is set to schedule a vote on an increase in the minimum wage — a move any economist with his head screwed on straight will tell you leads to increased unemployment — without even brokering a deal on adding some good policy to the package.

Erick has a good idea:

The GOP should add strict border security to the minimum wage bill. After all, if the House increases the minimum wage, there is going to be an increased rate of illegal immigration to offset the higher wages employers must pay legal residents. The net result will be higher illegal immigration and increased unemployment of legal residents as employers replace them with illegal immigrants who are not documented.

UPDATE: Indications are that some sort of conservative policy will indeed be attached to this legislation to lessen the pain. Still, it’s too bad that this is being scheduled for a vote.