Minimum Wage Hike is Popular, But CBO Report Reels Rightbloggers into Attacking It
Since President Obama proposed a new $10.10 minimum wage in his last State of the Union address, rightbloggers have been sore about it. But out of apparent respect for -- or fear of -- public opinion, they'd been keeping their mouths shut about it till last week.
That's when a Congressional Budget Office report speculated that the $10.10 minimum might raise the wages of 16.5 million American workers (yay!) but might also lead to a loss of half a million jobs (boo!).
This revived rightbloggers' opposition to raising the wage -- and (as too much ain't enough for the brethren) stirred some of them to advocate lowering it, if not doing away with it altogether.
Obama's SOTU, you will recall, generally and predictably enraged conservatives, but the proposed minimum wage was not so much their focus at first. You might think they kept relatively quiet because the minimum wage hasn't risen much over the years, and in a era of stagnant wages and rising prices it makes sense to raise the wage floor to reduce the number of "working poor." More likely it had to do with the large and widespread public support for the $10.10 minimum wage -- measured by Pew in January at about 73%. If you want to win another election someday, that's a bad number to get on the wrong side of.
Nonetheless some of the brethren had a go. Reacting to pre-SOTU trial balloons, National Review's Jim Geraghty, for example, focused on the small size of the minimum-wage community. "So . . . the Democrats' big idea on income inequality is one that will increase wages for . . . 1.1 percent of the workforce," he wrote. They're like snail-darters of poverty! "The workers making minimum wage may very well appreciate the extra $85 to $114 per week," admitted Geraghty, "but it's not going to have much of an impact on their purchasing power." (The guy living on $15,000 a year may disagree, but who are you going to believe: Some bum making minimum wage, or Jim Geraghty?)
At The Federalist, Sean Davis listed "11 Facts About The Minimum Wage That President Obama Forgot To Mention," which also portrayed the beneficiaries as a small, easily-disregarded minority of young burger-flippers who "Either Dropped Out Of Or Never Attended High School" (which "doesn't mean a college education is best for everyone," Davis cautioned, "but it does suggest that lacking one can make it more difficult to move up the pay ladder").
But Davis saved his grimmest news, by conservative standards at least, for last: "A Change In The Minimum Wage Often Triggers Union Wage Hikes And Benefit Renegotiations." By a variety of mechanisms, including the use of the minimum wage as a baseline in contract negotiations, unions may benefit from a raise; therefore, said Davis, "The 'real' reason behind the minimum wage push is to pay back the labor unions who helped re-elect the president in the form of higher wages, increased negotiating leverage, and less competition for jobs."
The connection between minimum and union wages has been explored for decades and, as seen in this 2007 Heritage Foundation report, has developed into a venerable conservative talking-point. Yet for some reason this argument that other workers might also get higher wages out of a higher minimum wage hasn't caught fire with the sheeple. Curse that MSM!
But last week's CBO report gave the brethren a new attack point -- for, while the Democrats had been playing on citizens' fears of falling into poverty, rightbloggers could now play on their fears of falling into joblessness.
"What's better?" asked Rob Port of Say Anything. "More people working at a lower wage? Or fewer people working at a higher one?" (The answer: Obama sucks.) "The question we have to ask ourselves," demanded S.E. Cupp of CNN: "Would that [wage boost] be that worth the potential loss of 500,000 jobs?" (Answer: Obama sucks!)
When the Economic Policy Institute produced a letter signed by 600 economists, including seven Nobel laureates, in favor of a minimum wage hike, Reason's David Harsanyi oh-yeahed, "How many of those findings are driven by partisan and ideological concerns rather than empirical outcomes? I'll let the social scientists argue over it." While you were out looking for social scientists, Harsanyi hustled in his experts: 38 "top economic experts" from the University of Chicago. Given the proposal "raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment," 34 percent agreed, 32 percent disagreed and 24 percent were uncertain. What does this tell us? That "the minimum wage debate splits economists in many ways these days, but what it doesn't do is offer us any consensus that asserts Obama is right. It never does." Because Obama sucks!
At the Western Center for Journalism, Christopher Agee crowed that the CBO report "slaps Obama in the face," called $10.10 "unfeasible" and "unsustainably high," and asserted the hike "would result in widespread price increases for consumers, which would disproportionately affect the very low-income families the policy would ostensibly benefit." Ultimately, though, even the vigor of his contempt could not lift Agee's spirits, for "an uninformed populace" had been taken in by the "false promises and pandering for guaranteed votes" of "leftist politicians." His gloom was shared by Tyler Cowen at Marginal Revolution, who lamented that "the American people will never understand the ins and outs of the monopsony debate and the like." (Wiki here.) Later, Cowen asked, "Will raising the minimum wage boost crime?"
In the fun-with-numbers category, Jeffrey Dorfman said at Forbes that "the President is proposing to redistribute around $100 billion per year from business owners and customers to low wage workers" and since, notwithstanding the 16.5 million wage-gainers, CBO proposed only 900,000 citizens rising above the poverty level, "the proposal is to spend $100 billion to remove 900,000 people from poverty. That is about $110,000 per person lifted out of poverty." Gummint spendin' $110,000 a my money fer one freeloader! Mabel, git me my votin' rifle! (Fun game, anyone can play.)
"This is how the numbers have always worked," intoned Daniel Greenfield at FrontPageMag. "The left intervenes in the economy to reduce income inequality and destroys jobs which leads to more income inequality. The more it intervenes, the more people end up out of work or living from paycheck to paycheck." This accounts for the steady decline of the U.S. economy since the minimum wage was established in 1938.
Perhaps swayed by reflection, or an editor, further down Greenfield admitted, "some workers will benefit. Others will lose." But the real problem was liberals' bad attitudes: "If the Dems simply admitted that, we could have a rational conversation on the subject," said Greenfield. "Since they won't, we can't. In their world, no one will lose their job, unless businesses are mean. That's the philosophy that led to people fighting over powdered milk in government stores in Venezuela while the government denounces milk hoarding." You had your chance at rational conversation with Daniel Greenfield, libs, and now look what's happening in Caracas!
Speaking of rational conversation, Per Bylund at the Mises Economic Blog claimed that the $10.10 proponents' argument "attempts to sound like economics it clearly is not. Rather, it is just the common political statistics-throwing to support one's own position on the matter." Bylund quoted as an example BusinessWeek's Peter Coy, who had said, "it could make sense to raise the minimum wage even if some jobs are lost because of the benefits of higher pay to people who do have jobs." If you also see the point of increasing some workers' spending power in a moribund economy, you're obviously a victim of statistics-throwing: "Yes, you read that correctly," marveled Bylund: "even if outlawing low-paying jobs would cause 'some' unemployment (obviously an outlandish thought), it might 'be worth it.'" To demonstrate how real economists discourse, Bylund then explained that "Coy and his statistics-munching, central planning buddies" were engaged in the "political condemnation of a few hundred thousand people" who would soon be "begging for change."
When the New York Times ran a story about how some states' border towns were competing for workers and the ones who had higher minimum wages were winning, Tom Maguire of Just One Minute found the weak spot in the statists' argument: One of the Times' subjects was a rodeo barrel racer -- a lady rodeo barrel racer -- who had bought a new horse with her extra earnings. "What kind of a country are we living in where a young lady with rodeo dreams can only afford one horse?" cried Maguire. "Raise the minimum! Spend Other People's Money!" Another subject, a bartender -- a lady bartender! -- got this treatment from Maguire: "So she can work a few less hours and spend quality time with her honey. Good to know, but is this why we are raising the minimum? Next!" Finally, Maguire found a feedlot worker he was disinclined to mock, for reasons we will leave up to our readers. "Why is he buried at the end?" complained Maguire.
Gary Galles of the Ludwig Von Mises Institute revived the union angle -- "a higher minimum wage increases the demand for union workers by reducing competition from lower-skilled workers" -- in a post headlined "How Special-Interest Groups Benefit from Minimum Wage Laws," which we at first thought was meant to hook readers who suspected Obama was steering those cushy $10.10 an hour jobs to his homosexual friends; however, it turned out the other con artists Galles believed were supporting the higher wage merely to enrich themselves were "non-union workers and employers in high cost of living areas, where virtually everyone earns above the federal minimum wage" -- nearly all of whose corrupt jurisdictions are blue! -- and "even Wal-Mart... because Wal-Mart already pays more than the federal minimum, in low-wage areas a federal minimum-wage increase raises competitors' costs, but not theirs." The "cui bono?" test clearly shows that people who want to raise their workers' wages are scheming to corner the market -- monopsonically, we guess -- while those who want to reduce workers' wages are just trying to help the poor. Counter-intuitive? Not if you're a rightblogger.
Speaking of reducing wages, there were rightbloggers who went even further and called for a lower minimum wage, or none at all. Actually, they weren't all rightbloggers -- Texas Governor Rick Perry said on CNN that "I don't think it's government's business to be setting the minimum wage out there."
The no-minimum-wage concept is a staple of that brand of conservatism known as libertarianism, a logical extrapolation of their government-only-hurts beliefs. Lew Rockwell was inspired by the CBO report to republish Murray Rothbard's "Against the Minimum Wage," in which the old crackpot railed against a corrupt wage-raising deal from the days of George H.W. Bush in which the Republicans, to his disgust, cooperated. Rothbard would be so proud of John Boehner. (Rothbard was also invoked by Robert Wenzel of the Economic Policy Journal, who attacked PayPal founder/libertarian Peter Thiel for even considering a minimum wage hike: "This is why Theil gets invited to Bilderberg meetings," huffed Wenzel: "'in theory' he is a libertarian but when it comes down to the 'practical,' he is a Greenspan interventionist." Splitters!)
"The government has no business telling private employers what to pay or telling workers they cannot offer their labor services at less than the legal minimum wage," sniffed James A. Dorn at the Cato Institute, "even if they are willing to do so to retain or get a job." "If government sets or raises the minimum, employers have an incentive to use fewer low-skilled workers... The minimum wage, therefore, harms the people most in need," said Sheldon Richman at Reason.
At Bloomberg, Michael R. Strain of the American Enterprise Institute was willing to compromise, offering paupers a minimum wage of four dollars. Since the long-term unemployed -- of which the U.S. has many -- are unlikely to ever get rehired, said Strain, we should "let companies pay the long-term unemployed less by lowering the minimum wage for them." Don't worry, added Strain, he didn't want to "leave it at that. Society must have as a goal that no one who works full time and heads a household lives in poverty." Thus the $4 minimum should come with "expanded earned-income tax credit, or with more straightforward wage subsidies" -- which would give the slave-laborer a few extra portions of meat per week without costing businesses a dime.
Everybody wins! Even better: a few years later, once the heat's blown off, Republicans can ask what this money-wasting government program is doing on the books, cut the shit out of it, and move on with no one the wiser! Look, it's worked before.
At Commentary Arthur C. Brooks agreed and, as part of his plan for America's poor -- which also includes their religious "transformation," presumably through nagging -- proposed hiring the long-term unemployed at "sub-minimum wages" because no one's going to hire them anyway and this at least "would give them a fighting chance," if not three square meals a day. (Also they'd have less money to spend on sin, which fits Brooks' religious angle.)
Bloomberg's Ramesh Ponnuru was on board: Strain's plan "has two great advantages over raising the minimum wage," he said. "It is better targeted at people in low-income households, and it is very unlikely to reduce employment." Not as much as slavery, but let's take it one step at a time!
And so rightbloggers rose to protest a popular policy at the provocation of a wonkish document from an office most Americans have never heard of. You know, sometimes we suspect President Obama is trolling his opposition to make them embarrass themselves, but in this case, unless you think Obama somehow engineered the CBO report, that doesn't seem to be happening. Maybe Obama's just that lucky. Or they're that dumb.
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