Slamming progressives on minimum wage

By Alec Brandon

This summer has been a hot one, especially for progressives: Bush’s approval ratings are mired in the mid-30s, pariah Joe Lieberman has been ousted as the Democratic nominee for the Senate, and Democrats look well positioned to retake the House and Senate.

But progressives aren’t waiting until after the 2006 election to get many of their favorite policies into law. In August alone, Chicago aldermen passed the big-box ordinance—requiring businesses with over 90,000 square feet to pay a “living wage” of $10 an hour and $3 of benefits, the repeal of the estate tax was defeated, and a hike of the federal minimum wage appears imminent. But while these are clearly rhetorical victories for the left, public policy doesn’t have much to do with rhetoric.

Don’t get me wrong. America’s rising inequality is no good, nor is the plight of the poor on Chicago’s South Side, but these policies aren’t likely to do more than send a positive message to the impoverished, if not actually harm them.

Chicago’s big box ordinance will, as it aims, keep Wal-Mart and its other big-box counterparts out of the city. But why is that good for the city and its poor? Wal-Mart does pay its employees less than a high-end grocer in Lincoln Park, but compared to no job, Wal-Mart is a lot better than the plight of the South Side’s status quo. On top of that, given proper governmental oversight, the big-box retailers lower prices for everyone on the South Side. The big-box ordinance might send a strong message to employers that progressives perceive as unjust, but public policy aimed at merely sending messages can be a dangerous game fraught with unintended consequences.

The same issues are at play on a national scale over the proposed hike of the federal minimum wage. For decades the progressives have championed the minimum wage as a way to protect citizens against demonic big business. But a look at the actual impact of minimum wage shows it has yet to be anyone’s savior.

Elementary economic theory tells us that while raising the minimum wage might increase pay for some, the fact that there are substitutes for unskilled labor means that raising the minimum wage by a couple of dollars will mean a slightly higher income for some and no more income for those who can be replaced by cheaper technology. Getting paid at all is a lot better for America’s poor than not working at all. Raising the minimum wage might send a positive message to America’s poor, and I’ll concede that it is important that the poor know that the government is looking out for them. But as an actual solution to the problems of the poor—something progressives ought to be aiming for—the minimum wage falls flat.

Defenders of the minimum wage can cite a litany of evidence on its behalf, but at its best, that evidence does nothing more than show that small increases in the minimum wage don’t hurt that many people. It is absurd that a policy with such a dubious track record would become the main plank in the fight against poverty for so many progressives, yet there it is, front and center on nearly every Democrat’s website.

But the problem here isn’t with politicians on the Democratic side of the aisle; instead voters who label themselves as progressives have to think about more than the rhetorical value of the policies they support. I don’t say this because of any ill will I have for progressives; in fact, I wholeheartedly agree with many of their goals. But they ought to try to actually achieve the goals they set for themselves—something lost on many progressives today.

Partial responsibility for the disconnect between the goals of progressives and their actual policy stances is that most effective tools in the fight against poverty aren’t the type that are likely to inspire anyone, let alone progressives. I’ll admit that proposing to raise the Earned Income Tax Credit may come off as wonkish, nothing like the great progressive crusaders of the 20th century who bravely confronted the political and economic establishment, demanding higher wages, union rights, and basic human dignity for America’s working class. But those fights were a long time ago, and just as the nature of the fight against poverty has changed, so should progressivism.

Progressives need to stop consuming themselves with the fight against poverty and need to focus on actually trying to win the fight against poverty. The tools are at their disposal, the only question is whether they are willing to give up the rhetoric that has motivated their cause for the sake of achieving its expressed goal.