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Minimum Wage: Yet Another Republican Retreat

Every so often, without fail, the Republicans remind me why I don’t join the party.

A recovering drug and alcohol abuser, living in the streets, recently told me the following story. One day, in desperate need of money, he went to the owner of a convenience store. The street guy pointed to the dirty, bottle-strewn parking lot and offered to sweep and clean the parking lot for $4 an hour. He said the owner looked nervous before turning down the offer.

My homeless friend countered with $3, and still, the man said, “No.” So my friend went to another mom-and-pop store. “May I clean your lot for $3 an hour?” he asked. Again, “no.” He went to four other convenience stores, each with a filthy parking lot. Each time, the owner said, “No.”

Several owners said they could not legally hire him for less than the California hourly minimum wage of $5.75 an hour. The owners told my friend they “couldn’t afford to take a chance,” some no doubt assuming that he was an undercover cop out to bust them.

What does this have to do with Republicans? Leading Republicans, including House Majority Leader Dick Armey, say they will no longer oppose a minimum-wage hike.

“I believe it is a foregone conclusion that some type of minimum-wage increase bill will be approved in this session of Congress. Rather than fight the thing and have Republicans being dragged kicking and screaming to vote on the minimum wage, I say to my party, ‘Why not take the lead,’” said Rep. Jack Quinn (R-N.Y.).

Excuse me? Why not?

How about the fact that Nobel laureate economist Milton Friedman said, “We regard the minimum wage as one of the most, if not the most, anti-black laws on the statute books.” Friedman and the overwhelming majority of economists say that minimum-wage laws hurt the very people that proponents seek to help — minorities, teenagers and female heads of families.

Or how about the 1987 New York Times editorial, “The Right Minimum Wage: $0.00″? The editorial in the liberal paper urged the abolition of the minimum wage, arguing, “An increase in the minimum wage … would increase employers’ incentive to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers, and fewer will be hired.”

How about the unemployment rate for black teens, age 16 to 19, which now stands at 30.1 percent? Before minimum-wage laws, the black and white teenage employment rates were about the same. After minimum-wage laws, however, black teens experienced greater unemployment than white teens.

Or how about when Congress raised the minimum wage from $4.25 an hour to $4.75 an hour? From third quarter 1996 to first quarter 1997 (when the rate kicked in), teenagers, blacks and women heading families all experienced greater unemployment. And this during a period of over-all job growth! Allen Reynolds, director of economic research at the Hudson Institute, writes, “Such a sudden rise in the national unemployment rate would be front-page news. But when only teens, blacks and single moms are affected, it apparently does not attract much attention or sympathy.”

For over 30 years, my dad ran a cafe near downtown Los Angeles. Whenever Congress hiked the minimum wage, I watched my parents sit at the kitchen table with pen and pad and make decisions. The goal of hiring a new dishwasher? Not now. Raises for the waitresses? Postponed. Prices? Must raise them, even though this always triggered several weeks of business falloff.

Studies show that most people hired at the minimum wage get increases within a matter of months. Many fast food executives started out flipping burgers. And the image of a guy with a family of four working a minimum-wage job? It is just that — an image. Most minimum-wage earners are teens and secondary household wage earners.

Republicans, by abandoning principle in supporting higher minimum-wage laws, seek to reposition themselves as “compassionate.” But, by doing so, the GOP hurts the very people most likely to call them “mean-spirited.”

True compassion does not lie in drop-kicking principles, especially when the result harms people. True compassion lies in making a credible, persuasive case for opposing minimum-wage hikes. True compassion lies in maintaining the course, even if it takes a while before critics appreciate the journey.

  • drfredc

    The solution to the MW issue is to make it dynamic market based, not politically based, MW system. One simple way to do this is to make the MW self adjust in reverse to the unemployment in any region. If unemployment goes down, the MW goes up… If the unemployment goes up, the MW goes down. Add a caveat that existing MW employees wages can’t go down.

    For example, assume the base dynamic MW settings are $7/hr, 8% unemployment, 50 cents times change from base MW. If the unemployment in AnyZipCode is 6%, the MW is (+1 percent * 50 cents) $7.50. If the unemployment rates increases to 8%, the MW changes to (-1% * 50 cents) or $6.50. Pick reasonable numbers and parameters to suit your political desires to best support the general welfare of all, not just big blue city and union interests. Then let the system do its thing, much as biologic systems operate to dynamically sustain life in various ecosystems around the world…

    Such a system, if properly designed will create a dynamic self supporting system for economic prosperity, instead of a self defeating overly centralized MW that results in perpetually high unemployment accompanied by significant moral and political dissatisfaction.

    The folks in the job marketplace need a MW system that helps them understand how a properly functioning the marketplace work and how centralized economies do little to help the little guy, but do a lot to empower the elected monarchies…

    Voting for politicians who support regulations, taxes and laws that make it easier or harder to employ people have consequences of a personal nature when it comes to wages and employment. What works for folks in big cities may not work for the general welfare of rural districts and suburbs — solutions should embrace the Constitutional ‘general welfare’ principle of the Preamble, not embrace the special interest politics of deep blue cities.

    The GOP leaderships failure to make an issue of these sorts of points clear to everyone is one reason the GOP is in the minority. They’ve lost to vision of what the Constitution is all about, particularly how the Preambles role is to define how the various powers of the federal gubermint should be utilized.

    If the Preamble defined how a lawnmower should be used, the GOP leadership would be fine picking the lawnmower up and using it to trim hedges, or plow snow…. The GOP leadership needs to be changed…

  • Ltpar

    Sorry folks, in case you haven’t noticed there simply aren’t any “free lunches,” despite what the Pied Piper of Chicago wants you to believe. Wages should be set by the market place and not by government. Minimum wages are for those with little or no job skills and apply until the individual exercises initiative to improve themself. If you want higher wages, then get the education, job training and technical experience to advance to a higher paying position. These are the concepts this country was built upon. It worked for me and if I can do it anyone can.