One of the most politically pressed issues in the last decade is the public desire for a raise in the minimum wage, and what could be wrong with allocating additional funds to those in need?
Well, nothing; and while I support the allocation of additional funds directed towards those in need, I don't believe that a raise in the minimum wage would have that desired effect. Not only would a raise in the minimum wage affect only a small percentage of low income households, it could potentially do more harm than good by causing a raise in the unemployment rate and potentially causing inflation, degrading the value of our currency.
Kevin A. Hassett and Michael R. Strain of the American Enterprise Institute agree in their article Why we shouldn't raise the minimum wage. They argue that "Raising the wage will make it more expensive to hire younger and low-skill workers. There are better ways to help the poor... only 11.3% of workers who would gain from the increase belong to poor households". Hassett and Strain go further in detail in their article, which includes a more effective proposal for the allocation of funds to low income households; they present the nonpartisan Congressional Budget Office's solution of "expanding the earned income tax credit [as] a much more efficient way to fight poverty". This solution though, as Hassett and Strain describe it, is not embraced by politicians since expanding the earned income tax credit would come out of government coffers, and raising the state or national minimum wage would not only gain them political points, but it would also have no effect on the government coffers.
While it may be more difficult to push for a more beneficial solution, I feel that Texas should avoid any implication towards raising the minimum wage, for the better of her people overall.
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ReplyDeleteIn today’s ultra-partisan style of political discourse, I find it refreshing to come across issues that are simply too complex to be apart of any party’s cut-and-dry litmus test of political opinion. The minimum wage is, generously enough, just such an issue. Although it would seem simple enough (D’s: Yes! Living Wage!, R’s: No! Bootstraps Only!), I’ve come to find that my peers’ opinions concerning the minimum wage, regardless of political affiliation, are always more nuanced then expected.
ReplyDeleteJosh Nava, over at his blog nosce tuus imperium, provides a perfect example of this in his latest editorial “The problem, or lack thereof, with the minimum wage.” In his article, Nava expresses both support for the social safety net (in the form of welfare type programs), yet simultaneously shares his skepticism towards expanding it via an increase in the minimum wage. Nava cites the dissenting voices of the American Enterprise Institute and Congressional Budget Office in his argument, noting their predictions of stymied job growth and the latter institution’s proposal of earned income tax credit’s as a preferred alternative.
I find Nava’s argument commendable. Frankly, there are too few left-leaning voices with no sense of centrist-bred economic skepticism. That being said, I personally disagree. I find the matter to have greater social implications.
Raising of the minimum wage dignifies the impoverished workers who rely on it. Brishen Rogers, an Assistant Professor of Law at Temple University’s James E. Beasley School of Law, sums up my view on the matter in a 2014 article for Texas Law Review, stating “Minimum wage laws advance social equality, and do so better than direct transfers, in several ways. They increase workers’ wages, which are a primary measure of the social value of work; they alter workplace power relationships by giving workers rights vis-à-vis employers; and they require employers and consumers to internalize costs of higher wages rather than mediating all distribution through the state.”
Also, I believe the economic problems would remedy themselves. After all, this wouldn’t be our first time raising the minimum wage and feeling its effect on the economy. The egalitarian ethos behind such a move would benefit us much more as a society in the long run.
Still, I’m glad there are multiple voices in the discussion. That’s how political discourse should be.
Rogers, B. (2014). Justice at Work: Minimum Wage Laws and Social Equality. Texas Law Review, 92(6), 1543-1598.