What’s
Wrong Today:
The minimum wage was last
increased in 2007 by huge bi-partisan majorities. George W. Bush was
president, and the House and Senate were controlled by the Democrats. In the
Senate, only 3 Republicans voted against the bill, Messrs. Coburn
(R-OK), Kyl (R-AZ) and DeMint (R-SC), while 2 Democrats did not vote: Messrs.
Schumer (D-NY) and Johnson (D-SD). The bill passed 94-3.
In the House, the bill passed by 315-116, with all 233 Democrats voting
for it along with 84 Republicans, while 116 Republicans voted “no”. Today’s
Senate is different. Only 22 of the 45 Republicans who voted for the bill
in 2007 are still in the Senate, while Think Progress reports
that 67 House Republicans who voted for it in 2007 are still house members.
This year, it seems unlikely that there are sufficient votes to bring the
$10.10 minimum wage bill to the floor of the Senate, while the Republican House
leaders say they have no intention of voting on the legislation, even if passed
by the Senate.
President Obama and
congressional Democrats support an increase to $10.10, indexed to inflation.
Republicans plan to obstruct this. Indeed,
Republican governors called
out the minimum wage at the National
Governors Association meeting at the White House, with several governors
indicating that they opposed increasing the minimum wage in their home states. Mr.
Obama to the govs:
little appetite in Congress to move on some of these priorities, at the state
level you guys are governed by practical considerations. You want to do right
by your people and you see how good policy impacts your citizens, and you see
how bad policy impacts your citizens, and that means that there’s less room for
posturing and politics, and more room for getting stuff done
Reply from Gov. Bobby Jindal (R-LA):
is now the minimum wage economy. I think we can do better than that
So, what’s different today from the environment in 2007? Republicans
now hate the minimum wage increase. Rep. Paul Ryan (R-WI) said the
following to CNN after Mr. Obama’s SOTU speech:
it actually is counterproductive in many ways. You end up costing jobs from
people who are at the bottom rung of the economic ladder.
Can raising the minimum wage be a defining political battle of the
2014 elections? Big
majorities of voters in both parties want the minimum wage raised. As the Wrongologist reported in December, when the public can vote on minimum
wage increases, they pass handily:
(plus DC) have set their own, higher minimums, ranging from $7.35 in Missouri
to $9.19 in Washington State. Some cities and counties have gone even higher —
San Francisco’s minimum wage, for example, is set to rise 19 cents to $10.74 next month
Even in
New Jersey, where voters re-elected Republican Chris Christie as governor, the
minimum wage was increased to $8.25, and indexed it to inflation, by 61% to 39%
of the voters.
Polls show
public support for an increased minimum wage: A December 11 Wall
Street Journal/NBC News poll found that 63% supported a rise to $10.10:
$10.10 rate was broad, including 61% of those earning $75,000 or more and 68%
of those earning $30,000 or less. The survey found 77% of Democrats supported
that rate, as did 47% of Republicans
Here are a
few more polls: A November Gallup
poll
showed that 76% of Americans want the minimum wage raised to at least $9 from
the current $7.25. This is up 5 percentage points just since March. An August poll by the National
Employment Law Project (NELP) found that 80%
support raising the minimum
wage to $10.10,
including 62% of Republicans and 75% of southern whites. A March poll by the
USA Today/Pew Research Center found that 71% favor increasing the
minimum wage to $9.
Making the minimum wage a national election issue could succeed. Republicans will have to decide: Will they obstruct a vote on the
minimum wage and run in 2014 as opponents of fair pay for working people?
The
current salary (2013) for rank-and-file members of the House and Senate is
$174,000 per year. If you broke that down to a 40 hour work week and 52 weeks a
year then they would make $83.65 per hour.
You know
they don’t work 40 hours per week, and certainly not 52 weeks per year. BUT all
of the House Republicans tell you that you can live on $7.25 per hour.
Republicans will continue
to push the nonsense that joblessness will result from a higher minimum wage, as
did Mr. Ryan above. In fact, more consumer demand via a higher minimum wage
means more jobs. Raising the federal
minimum wage means all businesses must do the same thing at the same time, so
no business gains an advantage over other businesses.
Businesses can
decide how to cover their added costs. Some might raise prices, others might
pay top executives a bit less, and others would dip into some of the excess
cash. Companies that raise prices so top executives can retain their pay will
be at a disadvantage if their competitors don’t raise prices.
Raising
take home pay will not hurt our (now) growing economy; it will help it move
ahead.
Let’s
force Congressional Republicans to tell voters why they think a higher minimum
wage is a bad idea.
Every so often an economist has the nerve to say that he or she is an empiricist. But try as they might, there is far too much real data for any of them to consider in full. Nor do they run real experiments. That said, when economists analyze what happens in a real time/place after the minimum wage is raided, in general, they find growth and ultimately more jobs (while some jobs will be lost at the margins).
this should be compared to the exaggerated claims for lowering tax rates – which, despite the nonsense of the Laffer curve, do no show any general or long term improvement to the economy – but they do show enrichment to the classes who benefitted most from the tax decrease (the wealthy)
ironic!