With the midterm elections approaching, the United States Congress finds itself in an exaggerated version of its customary posturing gridlock. Among the many urgent issues that itĀ almost certainly wonāt addressĀ this year are immigration reform, gun control, the Keystone XL Pipeline, the fate of the Export-Import Bank, and the federal minimum wage. A bill to raise the minimum wage from its current level, $7.25 per hour, to $10.10 an hour, over the course of two years, has been rattling around on Capitol Hill for eighteen monthsāwith, it now seems, no hope of passing. Because the federal minimum wage has never been indexed to the cost of living, the debate over its efficacy and morality is regularly reĆ«ngaged as its value sinks and Congress is called upon to act.
The arguments againstāa hundred yearsā worthāwere recently collected by a group of scholars calling itself theĀ Cry Wolf Project. They sound hair-curling. āThe minimum wage has caused more misery and unemployment than anything since the Great Depression,ā Ronald Reagan said in 1980. āRome, two thousand years ago, fell because the government began fixing the prices of services and commodities,ā Guy Harrington, of the National Publishers Association, told Congress in 1937. The Fair Labor Standards Act, which set a national minimum wage of twenty-five cents an hour, in 1938, and also abolished most child labor, āconstitute[d] a step in the direction of communism, bolshevism, fascism, and Nazism,ā according to the National Association of Manufacturers. In the view of its opponents, the minimum wageāor raising an existing minimumāwill always and inevitably damage the economy, kill jobs, doom American freedom, and/or harm the very people that it is meant to help.Ā This litany of alarm has a dismal record as a description of reality, and yet has not changed much over the past century.
President Franklin D. Roosevelt, when he first introduced the federal minimum wage, in 1933, was clear about its main purpose. āNo business which depends for existence on paying less than living wages to its workers has any right to continue in this country,ā he said. āBy living wages, I mean more than a bare subsistence level. I mean the wages of decent living.ā It had other purposes, too, including regional economic development: the initial impact of the minimum wage was strongest in low-wage industries in the South,Ā such as textiles. But its Southern opponents succeeded in creatingĀ exceptionsĀ to the law for agricultural and domestic workers, insuring that the decent living envisioned by New Dealers would not become available to, among others, millions of African-Americans. It has been raisedĀ twenty-three timesĀ since 1938. Still, itsĀ value todayĀ is far lower than it was two generations ago. The 1968 minimum wage, to take a high-water mark, was, in real 2014 dollars, $10.95 an hour.
Raising the minimum wage is not, by any stretch, a poverty panacea. Its knock-on economic effects are in fact complex, its redistributive aim less well targeted at the working poor than, say, theĀ earned-income tax credit. But opponents who insist that a raised minimum wage only hurts low-wage earners by eliminating entry-level jobsāa popular conservative position todayāoften have a weak grasp of the lives of the people involved. In March, RepresentativePaul Ryan, attacking the proposed hike at a town-hall meeting, said, āThe majority of these workers are younger people just getting into the workforce.ā This is not so. According to the Economic Policy Institute, the average age of workers who would benefit from a higher minimum wage today is thirty-five. Eighty-eight per cent areĀ over the age of twenty. āThe typical worker who would be affected by an increase in the minimum wage to $10.10 per hour by 2015 looks nothing like the part-time, teen stereotype: She is in her early thirties, works full-time, and may have a family to support.ā In last weekās issue, I wrote aboutĀ fast-food workersĀ who also look nothing like the stereotype, and who have begun fighting for an industry-wide raise and the right to unionize. Their present wages are hopelessly inadequate. One study showed that fifty-two per cent of fast-food workers are on some form of public assistance.
Recent polls find that Americans strongly support (seventy-three per cent in favor, twenty-five per cent against) raising the minimum wage to $10.10. Senator Orrin Hatch, in an earlier round of this century-long debate,Ā told theTimes, āYouth unemployment and black unemployment will drastically rise. Itās amazing to me that some black leaders want an increase in the minimum wage.ā African-Americans and young adults are evidently consulting oracles different from Hatchās. Both groups support raising the minimum wage toĀ even higher rates than do Americans as a whole.
The true (and truly depressing) modesty of $10.10 was made clear in the most recent ājob-gap study,ā released annually by a group called Alliance for a Just Society. Using data from state and federal public sources, the study found that, for a single person, the bare minimum income necessary for a basic household budget varied widely according to location. In Montana, for a full-time worker, it was $13.92 an hour; in New York City, it was $22.66. For a single adult with a school-age child, the bare minimum required, in Montana, was $19.36 an hour for a full-time worker; in New York City, it was $30.02. Raising the minimum wage to $10.10 would increase the income of at least sixteen million workers. It would not lift anywhere near that many people out of poverty. The proposed hike would ease present hardship, not abolish it. It would be a move in theĀ directionĀ of āthe wages of decent livingāāa performance, one might say, of decency itself.
Senator Mitch McConnell, Republican of Kentucky and the Minority Leader, has voted seventeen times against raising the minimum wage; in April, he led a successful filibuster of the $10.10 bill. If the Republicans can manage to take the Senate in November, McConnell hopes to become the Majority Leader, though he will first need to retain his own seat. He is in a surprisingly tight race with Alison Lundergran Grimes, Kentuckyās Secretary of State, who has been resolutelyĀ reminding votersĀ of his record on the minimum-wage issueāa majority of Kentuckians favor raising it. McConnell recently had what may turn out to be his Mitt Romney āforty-seven per centā moment. He was speaking at a donor conference in California, organized by Freedom Partners Action Fund, a superĀ PACĀ with ties to the conservative billionaire industrialists Charles and David Koch, called American Courage: Our Commitment to a Free Society. McConnellās remarks wereĀ secretly recordedĀ by a political Web show called the Undercurrent and later published byĀ The Nation. Looking forward to his reign as Majority Leader, McConnell told the wealthy donors, āWeāre not going to be debating all these gosh-darn proposals. Thatās all we do in the Senate is vote on things like raising the minimum wage.ā
That California conference seems to have been an extraordinary affair. The setting was the St. Regis Monarch Beach Resort, in Dana Point, giving Party leaders, including McConnell and Senator Marco Rubio, along with a number of Senate hopefuls, the chance to mingle for a weekend, in luxurious surroundings, with the Partyās largest donors. The Party of kill-the-minimum-wage could hardly have been more splendidly represented.
The most startling recording made at the California conference was of a speech by Richard Fink, an economist who is an executive vice-president of Koch Industries, Inc., and who has been described as the āchief political adviserā to Charles Koch. Fink hit every scare note in the timeworn aria against the minimum wage. āThe big danger of minimum wage isnāt the fact that some people are being paid more than their value-added,ā he said. āThatās not great. Itās not that itās hard to stay in businessāthatās not great, either. But itās the five hundred thousand people that will not have a job because of minimum wage.ā This theoretical mob of half a million jobless will see themselves as victims, Fink said, making them, psychologically, āthe main recruiting ground for totalitarianism, for fascism.ā Fink drew dark analogies to the Third Reich, Stalinās Soviet Union, Maoās China, even āsuicide-bomber recruitment.ā It was, in many ways, the same old song, and it probably spoiled no oneās appetite for the āoven-roasted Angus natural filet mignon served in a fresh green peppercorn sauceā at a conference dinner held at La Casa Pacifica, the old Western White House of Richard Nixon. Still, I like to think that Nixon himself, who originally proposed the earned-income tax credit and presided over a dramatically less unequal American economy, might have blushed.
ZNetwork is funded solely through the generosity of its readers.
Donate