Speaking Of The Minimum Wage …

I have a laundry list of things I hope to see happen under the Biden administration, and one of those at the top of the list is a significant increase in the federal minimum wage rate.  It has been stagnant for 12 years now, despite the fact that the cost of living has increased consistently, year after year.  The article I’m about to share was written a week ago, two days before President Biden’s inauguration, but the premise still stands, and I completely agree with its author, Paul Krugman writing for the New York Times.

Who’s Radical Now? The Case of Minimum Wages

Evidence has a well-known liberal bias.

paul-krugman-thumbLargeBy Paul Krugman

Opinion Columnist

  • Jan. 18, 2021

Most Americans, myself included, will be deeply relieved when Joe Biden is finally sworn in as president. But almost everyone has a sense of foreboding, not just because of the specific threat of right-wing terrorism, but also because Biden will take office in a political environment polluted by lies.

Most important, of course, is the Big Lie: the claim, based on nothing whatsoever, that the election was stolen. Has there been anything in U.S. history like the demand from leading Republicans that Biden pursue “unity” when they won’t even say publicly that he won fairly? And polls showing that a large majority of rank-and-file Republicans believe that there was major election fraud are deeply scary.

But not far behind in importance is what I think of as the Slightly Smaller Lie — the almost universal insistence on the right that the mildly center-left leaders of the incoming administration and Congress are, or at least are controlled by, radical socialists. This allegation was almost the entire substance of Republican campaigning during the Georgia Senate runoffs.

One response to this bizarre claim — and it’s not a bad response — would be a Bidenesque “C’mon, man. Get real!” But I’d like to do a somewhat deeper dive by focusing on one particular issue: Biden’s call, as part of his economic recovery plan, for an increase in the minimum wage to $15 an hour.

Republicans raising objections to Biden’s plan have singled out the minimum wage hike as a prime reason for their opposition, although we all know that they would have found some excuse for objecting no matter what he proposed. What’s striking about this fight — let’s not dignify it by calling it a debate, as if both sides were making real arguments — is that it shows us who the real radicals are.

For what counts as a radical economic proposal? One possible answer would be a proposal that flies in the face of public opinion.

By that criterion, however, Republican politicians are definitely the radicals here. Raising the minimum wage is immensely popular; it’s supported by around 70 percent of voters, including a substantial majority of self-identified Republicans. Or if you don’t believe polls, look at what happened in Florida back in November: even as Trump carried the state, a referendum on raising the minimum wage to $15 won in a landslide.

So the G.O.P. is very much out of step with the public on this issue — it’s espousing what is almost a fringe position. Oh, and it’s a position that is completely at odds with the claim by many Republicans that they’re the true party of the working class.

What if we define radicalism not by opposition to public opinion but by a refusal to accept the conclusions of mainstream economics? Here, too, Democrats are the moderates and Republicans the radicals.

It’s true that once upon a time there was a near-consensus among economists that minimum wages substantially reduced employment. But that was long ago. These days only a minority of economists think raising the minimum to $15 would have large employment costs, and a strong plurality believe that a significant rise — although maybe not all the way to $15 — would be a good idea.

Why did economists change their minds? No, the profession wasn’t infiltrated by antifa; it was moved by evidence, specifically the results of “natural experiments” that take place when an individual state raises its minimum wage while neighboring states don’t. The lesson from this evidence is that unless minimum wages are raised to levels higher than anything currently being proposed, hiking the minimum won’t have major negative effects on employment — but it will have significant benefits in terms of higher earnings and a reduction in poverty.

But evidence has a well-known liberal bias. Did I mention that on Friday, just days before their eviction, Trump officials released a report claiming that the 2017 tax cut paid for itself?

Voodoo economics may be the most thoroughly debunked doctrine in the history of economic thought, refuted by decades of experience — and voters consistently say that corporations and the wealthy pay too little, not too much, in taxes. Yet tax cuts for the already privileged are central to the Republican agenda, even under a supposedly populist president.

On economic policy, then, Democrats — even though they have moved somewhat to the left in recent years — are moderates by any standard, while Republicans are wild-eyed radicals. So why does the G.O.P. think that it can get away with claiming the opposite?

Part of the answer is the power of the right-wing disinformation machine, which relentlessly portrays anyone left of center as the second coming of Pol Pot. Another part of the answer is that Republicans clearly hope that voters will judge some Democrats by the color of their skin, not the content of their policy proposals.

In any case, let’s be clear: There is indeed a radical party in America, one that, aside from hating democracy, has crazy ideas about how the world works and is at odds with the views of most voters. And it’s not the Democrats.


12 thoughts on “Speaking Of The Minimum Wage …

  1. What’s a “laundry list”? Who makes a list when you’re doing your laundry? Don’t you just toss the clothes into piles (lights, darks, delicates) & then go from there?

    Shouldn’t the saying be “grocery list” or “shopping list”? This has always bothered me.

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  2. I have given my 15 cents worth on a few other of Jill’s blogs recently, so I don’t want to repeat them yet again. But suffice it to say, minimum wage is just one of a 4 point process that needs to be seriously looked at. I call it Controlled Capitalism. I would put it on my own blog, but I don’t have the readership to spread it around, not to mention it has little to do with my main theme, spirituality. But I will work on it, and then look for a place to put it. It is based on the premise that income inequality is running wild, and needs to be turned on its head. Being that the largest class of income earners are the poor, putting more money in the hands of the poor will increase the economy, while taking money away from those who hoard money, never using it, will further increase the economy, keeping more money going round and round and round.
    Money kept in interest-earning accounts or stocks and bonds erodes the available supply of money. Ultimately it will destroy capitalism, by destroying the low income workers who are it’s backbone.

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  3. Jill, the number of states and cities that have raised the minimum wage is significant. The number of companies who have done so reads like a who’s who. The same minimum is not needed everywhere, with some cities needing $15 with others getting by with less. My suggestion would be to have a minimum wage based on he living wage for the states or urban centers, also subjecting it to a COLA.

    The studies that note job loss should be considered, which is why a phased approach has been adopted successfully in more than several places. My favorite example is when Seattle went to $15 an hour, a restaurant said to its customers they were doing this, increasing prices, but eliminating tips. So, the consumers were not overburdened and everyone kept their job. Keith

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    • Yes, and many are on track to $15 in the next year or two. Sadly, though, some states have done nothing, or far too little, which is why we need a federal minimum wage. And the idea that it will costs thousands of jobs is simply a fallacy … a republican talking point. I’m not saying it won’t cost some jobs, but nothing along the lines the republicans are saying.

      Your idea is a good one, but … some states will simply do nothing.

      And the restaurant … servers are already paid beneath minimum wage, as a certain level of tips are assumed, so the restaurant industry gets by with paying them less than subsistence wages. In one sense, it makes sense, and if the server is now making $15 per hour, he/she is likely better off, but … it removes the incentive to go above and beyond in hopes of earning a better tip. Many facets to this issue.

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