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The Public Policy

The Immorality of the Minimum Wage

Naturally those who forcing others to pay it want to take all moral credit for their selflessness.

The Democratic juggernaut has slowed. The House has approved a minimum wage increase as part of the “100 hours” agenda. But a filibuster has blocked a vote in the Senate.

Of course, Republicans there are not going to stop the hike. Instead, they are demanding a minor concession — some tax breaks for small business. An amended bill will almost certainly pass, though Democrats are still pressing for “clean” legislation.

The minimum wage has proved to be a popular bandwagon, with scores of House Republicans joining Democrats in voting to raise the rate from $5.15 to $7.25 an hour. Even the White House has signed on, so long as Congress distributes a few tax goodies to Republican-leaning small businessmen.

Alas, the minimum wage has not become better policy because of the new GOP embrace.

The usual arguments on behalf of the minimum wage are simply wrong. Rarely do workers support families on the minimum wage. Columnist Mona Charen points to Labor Department data that more than four in five minimum wage recipients have no dependents. Most are second or third earners in a family, not heads of households. Just 1.2 percent hold full-time jobs. Most are below age 25 and almost half of their families earn above $60,000 a year.

Instead of helping those most in need, the minimum wage prevents the most disadvantaged from getting a foot on the ladder of economic success. If you raise the cost of hiring workers, fewer will be hired. If you raise the salary that must be paid, employers will reject those with the least skills, education, and training.

If there is one issue about which economists agree, it is that the minimum wage destroys jobs. Indeed, whatever legislators might say in public, they obviously understand this point. After all, if you could raise wages without consequence, then Congress should up it to $100 or $1,000 an hour and make all of us rich.

The only question about an increase, whether to $7.25 or $1,000, is how many jobs are destroyed. Raising the minimum wage has discouraged employment of minority teens, spurred mechanization, and encouraged substitution of fewer, better- trained workers for unskilled laborers. (This, of course, is why organized labor backs government wage-setting.) In short, the minimum wage, however well intentioned, hurts those it is supposed to help.

The best argument for raising the minimum wage today is that doing so will only have a modestly negative effect since the minimum hasn’t been increased for some time. Alas, that doesn’t help the workers who still will lose their jobs.

Of course, economic arguments have had little impact on the minimum wage debate. Instead, the wage hike is being propelled by emotion, the sentiment that people simply “should” be paid more.

THAT THE LEFT PREFERS to emote than to analyze comes as no surprise. Alas, it is not only liberals who believe in sentimentality as a basis for legislation. So, apparently, do the moderate Democrats elected in November, who are supposed to make this Democratic majority different from previous ones. These legislators all voted to raise the minimum wage.

Indeed, Rep. James Clyburn (D-SC), the new majority whip who leads a “faith working group,” defines raising the minimum wage as a “values” issue. Rep. Heath Shuler (D-NC), the pro-life, pro-gun former Redskin quarterback who upended a GOP incumbent, said of hiking the minimum: “To me that’s a moral issue. That’s where I’m with my party.”

In what way, however, is voting to make other people pay someone a higher salary a moral action?

Forcing others to do what one believes to be a good deed is a form of cheap grace. I receive a benefit, in this case winning votes, while making someone else, namely employers, bear the cost. Such a deal!

As Marvin Olasky has pointed out, compassion once meant to suffer with, to actively help those in need. Compassion then turned into writing checks — a worthy activity, to be sure, but very different in its impact on both giver and recipient.

Page: 1 2  

topics:
Education, Business

About the Author

Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).

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