Monday’s Mtg: Should We Raise the Minimum Wage?

I had this idea for us to do a series of meetings in the run-up to November that highlighted the starkest policy differences between the two presidential candidates. Oops. Donald Trump’s candidacy and Media’s obsession with horserace trivia make that pretty hard to do. Trump’s policy platform involves him basically riffing a stream of consciousness on whatever topic an interviewer brings up, hoping to run out the clock before anyone notices he has no policy ideas at all nor a rudimentary grasp of the issue.  No one seems to know exactly what Trump’s position on the minimum wage is, much less what it might be tomorrow or in a face-to-face debate with Clinton.

But, I’m not sure it really matters. As I keep hammering away at week after week, we are electing a political party to govern us more than an individual. And, the Dems and GOP at all levels hold irreconcilably-opposite views on the minimum wage. The Republican Party is wholly opposed to raising the minimum wage at all. Period. Many conservatives would prefer it be abolished or reduced, although I doubt they would take the political risk of trying it at the federal level. Marco Rubio and Ted Cruz oppose any federal minimum wage.

In stark contrast, Democrats really, really want to raise the minimum wage, either nationally or in as many states as possible. Hillary Clinton campaigned on raising it by 60%, from $7.25 to $12 per hour, to be phased in over several years. This would be the largest such increase in history. Under pressure from Bernie Sanders, Clinton stated she would sign a $15 minimum wage bill if a Democratic Congress sent one to her. This would double it.  This November 8, minimum wage increases are on the ballot in five states.  Democrats want to make this a wedge issue – one that motivates base voters to turn out – like Republicans did with same sex marriage bans in 2004.

Luckily for us, the debate over what would happen if the minimum wage were raised significantly is not all theoretical. The current federal minimum wage is just $7.25 per hour, one-third lower in inflation-adjusted terms than it was in the late 1960s. However, 29 states have a higher minimum wage, 12 of which are over $9.00 per hour. California’s is $10 – the nation’s second-highest –and Brown just signed a law to raise it to $15 in 2022. This means that lots of studies have been done comparing places that have raised the minimum wage to those that have not raised it. The results are generally encouraging to the liberal economic case for raising the wage. Yet, as I will explain, it’s not quite that simple.

On Monday I will open with a brief tutorial on the minimum wage and the types of questions we should be asking about what might happen if we raised it to various levels. I don’t think lowering the minimum wage is really on the table right now as a viable policy option, although if Trump wins, all bets are off.

DISCUSSION QUESTIONS

  1. Current policy:
    1. How high are U.S. minimum wages now and how high are they due to rise in some states?
    2. What else does govt do to support working poor? How important a policy tool is the minimum wage in comparison?
  2. Arguments: What arguments are used to support and oppose raising/lowering/ending the minimum wage
  3. Evidence: Based on history what affects would raising min. wage have on:
    1. Helping people: Raising incomes of the working poor, reducing poverty and reliance on govt transfer programs.
    2. Hurting business: Killing jobs, raising prices, other business decisions (like replacing workers with machines).
    3. Would more spending on other govt programs (EITC, etc.) do more to help the working poor than raising the min. wage?
    4. Can we predict what would happen if we abolished the min. wage?
  4. Fairness:
    1. Will raising min. wage really put a dent in inequality?
    2. Will it make low-wage pay more “fair?” What’s fair?
    3. Does the minimum wage subsidize big corporations more than it helps the poor (they can keep paying low wages)?
  5. Politics: Is this a winning issue for Democrats or Republicans? How big a winning issue?

SUGGESTED BACKGROUND READING –  

Next Week (Sept 26):  Progressives’ Constitutional Philosophy.

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