Minimum Wage as Politics

Democrats looking to make gains in the 2014 gubernatorial elections are using a possible minimum wage increase as a way to win support among voters….

Democrats across the political spectrum have lobbied for a higher minimum wage this year, after Obama got the ball rolling on the issue by calling for an increase in his February budget speech. Since then, union-organized demonstrations in front of profitable mega-chains such as Wal-Mart and McDonald’s have kept it in the public eye.

Senate Democrats have also pushed for a minimum wage increase going into 2014.  Their proposal would raise the minimum wage by 40%.

Of course there’s union involvement.  Aside from the Democrats being union meal tickets, increasing minimum wages protects union jobs—and so union leaders’ jobs—at the expense of the unemployed, those looking for a first job or for high school or college money, those looking for a second income, and the poor, who would gladly take the lower pay but who are priced out of the labor market by increased minimum wage.

We’ve already seen how that works.

Never mind the racist origin of minimum wage laws, instigated by FDR specifically to stem the tide of southern blacks moving north to take jobs at lower pay than white unions (blacks weren’t allowed in those unions, remember) wanted, and so taking jobs at the expense of those white union members.

Never mind that most of those unemployed and underemployed who will be priced out of the next round of hiring by these elevated minimum wages are the already vastly underemployed and underemployed black and Hispanic teenagers, black and Hispanic moms trying to work a family’s second job.  Regardless of current intent, the disparate impact of minimum wage laws is clear.  Where’s Eric Holder when we need him?

Nevertheless, Danny Kanner, Democratic Governors Association Communications Director had this to say:

The defining issue in every single one of these races is who is fighting for the middle class.

Yeah.  Never mind any of those poor, who’d like to get a job and work their way into the middle class.  Typical Progressive, playing politics, and with that play, ignoring the least among us.

2 thoughts on “Minimum Wage as Politics

  1. If the minimum wage is $10 per hour and you can only bring $9 per hour of value, you’re out of a job. A significant increase in the minimum wage will give employers like McDonald’s a massive financial incentive to invest in automation to reduce its workforce. It will also give less scrupulous employers an increased incentive to pay under the table to, in particular, employees who are powerless to complain, say, workers here without legal documentation. Even if it all “worked” the increased prices would ripple through the system significantly decreasing the buying power of someone making, say, $12 per hour. Other than that, it’s a great idea.

  2. Many (albeit far from all) of those “less scrupulous” employers might also be doing that to help their employees reduce their own tax bite: cash wages are harder to track, and in the fast food industry, among others, tips are not an expected or IRS-imputed income.

    You’ve also identified another major source of the failure of mandating wages. The bump in wages feeds back, pretty directly, into inflation rates so that today’s bump from $9/hr min wage to tomorrow’s $10/hr will by the day after tomorrow reduce the value of those $10 to the original $9.

    Eric Hines

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