Minimum Wage Arguments

Minimum wage legislation is basically feel-good legislation. Giving poor people more money is GOOD, right? And many on the left would like you to believe that those making minimum wage are in fact poverty stricken.

But...is that what raising the minimum wage actually does? Could it in fact HURT poor people?

First, from John Stossel, who talks about "sticking it to low-skilled workers" - the conclusion to this piece is quite telling, as he borrows a quote from economist Walter Williams:

"As George Mason University economist Walter Williams says, 'It's tempting to think of higher minimum wages as an anti-poverty weapon, but such an idea doesn't even pass the smell test. After all, if higher minimum wages could cure poverty, we could easily end worldwide poverty simply by telling poor nations to legislate higher minimum wages.'"

Is that common-sense thinking, or is Williams wrong here?

Stossel talks about why a supply-and-demand approach works when it comes to the labor force and minimum wage. He explains why government mandate simply won't work:

"The law of supply and demand works in the labor market, too. If government mandates a higher minimum wage, some workers will get a raise. Some. But something else will happen. Employers will hire fewer low-skilled workers. Others will let some current workers go. Some will choose not to expand their businesses. A few will close altogether. If an employer believes a worker creates only about $5.15 worth of value on the job, he won't pay $7, even if the government demands it."

And, as he goes on further to explain, the victims of this legislation will not be highlighted in the press - instead, they will likely become part of the welfare state they were probably trying to avoid in the first place BY WORKING.

More evidence stated plainly from George Will.

"Most of the working poor earn more than the minimum wage, and most of the 0.6 percent (479,000 in 2005) of America's wage workers earning the minimum wage are not poor. Only one in five workers earning the federal minimum live in families with household earnings below the poverty line. Sixty percent work part-time and their average household income is well over $40,000. (The average and median household incomes are $63,344 and $46,326 respectively.)

"Forty percent of American workers are salaried. Of the 75.6 million paid by the hour, 1.9 million earn the federal minimum or less, and of these, more than half are under 25 and more than a quarter are between 16 and 19. Many are students or other part-time workers. Sixty percent of those earning the federal minimum or less work in restaurants and bars and are earning tips -- often untaxed, perhaps -- in addition to their wages. Two-thirds of those earning the federal minimum today will, a year from now, have been promoted and be earning 10 percent more. Raising the minimum wage predictably makes work more attractive relative to school for some teenagers, and raises the dropout rate. Two scholars report that in states that allow persons to leave school before 18, a 10 percent increase in the state minimum wage caused teenage school enrollment to drop 2 percent."

More from one of my favorites, Mona Charen. She quotes Democratic rhetoric following passage of the minimum wage bill in Congress:

"'...With the passage of this crucial legislation, we will reward work, paying America's workers a decent wage so they may join in our nation's prosperity,' declared Speaker Pelosi. Majority Leader Steny Hoyer chimed in that 'You should not be relegated to poverty if you work hard and play by the rules.' Rep. Bill Pascrell proclaimed that 'The little guy is not going to be forgotten any longer.'"

This goes back to Williams' point. These quotes seem to illustrate that Dems (and some Republicans, as Charen notes) have solved the poverty issue. If that's the case, why not speak to leaders of, say, North Korea (they're so fond of being diplomatic, aren't they) and tell them to stop starving their millions of citizens and give them a "living wage" to end poverty? And how do they know what a "living wage" actually is? And why can't they trust the American people to earn it for themselves?

Here's an attempted refutation of all the above from Media Matters - try to be fair and balanced, right? The site references two pieces from ABC News it claims are biased, reported by Jake Tapper and Betsy Stark. Look at what Stark says in her piece:

"STARK: For the nearly two million Americans who worked for the minimum wage, the 10-year status quo has been painful. While their wages have stood still, rents have gone up 34 percent. The cost of seeing a doctor is up 30 percent. A gallon of milk is 29 percent more. A gallon of gas has more than doubled."

Ummm...isn't there some sort of implication here that these two million people have stayed at minimum wage level for 10 years? Not sure about the authenticity of that statement...

Also, both pieces comment on Congress fattening its own wallets without raising the minimum wage for everyone else - fairly critical, right?

I don't see a "conservative bias" here, and Media Matters just seems wrong to me.

We'll see how this legislation plays out in the real world.