June 29, 2006

Quick hits on the Minimum Wage debate

First, despite what Alec says I'm not an expert on the minimum wage (although he put it in quotes so maybe he knows, as I do, my lack of expertise on the subject). I do believe, however, in Congress periodically raising the minimum wage. I've been told by economists from my uncle, Ted Snyder, to my interviewer, Allen Sanderson, and most frequently by my co-blogger, Alec Brandon, that, on the margin, minimum wage increases unemployment. My good friend, and soon-to-be Econ grad student at University College-London, Jason Shapiro, told me that that argument presumes that the market is at equilibrium, which might not necessarily be true. (For the record, I don't know if Jason agrees with me either).But what it comes down to for me, is that every American who works hard should live above the poverty line. We disagree on a lot of things, but most Americans agree that if you play by the rules and work hard, you and your family should be able to get by. The minimum wage has existed for decades (since 1938), and yet it's real value in 2006 is at its lowest level in over 50 years. I agree that it might not be the best anti-poverty strategy. It would certainly not be at the top of my wish list. But I think that Americans believe in the decency of hard work, and that's why, like me, 83% of them support raising the minimum wage.Alec brings up a good point when he asked why democrats are clinging to this as the legislative item for the working class. My answer: the '06 elections. Congressional Democrats understand that the vast majority of Americans are for raising the minimum wage, and they want their party to benefit from that support and conversely, for the GOP to be damaged because of it. It's the same electoral logic driving the flag burning amendment. The difference is that the consequence of the former would be lifting millions of Americans out of poverty while the latter would be dismantling the first amendment.Finally, despite some members' opposition to the raise for American workers, it's hard to find representatives opposed to raising their own. Congress will have raised their wage by nearly $35,000 since 1997 and haven't raised the wages of workers once in that time. Then again, members of Congress are less worried about the raise causing unemployment, what with their 96% incumbency reelection rate. That's one class of American workers that should not be guaranteed job security.