Mario’s boy, Andy Cuomo, has taken to the airwaves to rally the support of the public to his initiative to increase the minimum wage to $15 an hour. The argument in support is pretty straightforward: people need to eat. And human experience suggests that Andy may be right about that.
And never one to pass on the opportunity to promote a populist cause that sails over the heads of its beneficiaries, the New York Times chimes in with its support. This is neither new nor surprising, as it previously offered an editorial in favor of a federal $15 minimum wage. This time, it’s the New York state of mind:
The lowest-wage workers in New York could soon get a much-needed raise — if the stingy Republicans who control the State Senate don’t block it.
What? You didn’t think they would pass up the chance to call Republicans stingy?
So far, however, Senate Republicans have opposed the increase, saying the $15 target is a populist ploy rather than valid policy. The Democratic-controlled Assembly supports the increase.
It is the Republicans who are playing politics. By opposing a $15 minimum, they are currying favor with corporations that keep wages low as a way to keep profits high. They ignore the economic arguments in favor of $15. They also are defying the majority of voters in New York who support it, according to recent polls.
The Times is likely right that most voters favor an increase to $15 an hour. Of course, that’s because most voters would be on the receiving end of the benefit, and what idiot wouldn’t prefer to make more money rather that less? But its strawman explanation of the stingy Republicans does no one, neither the Times nor the public, any service.
First, an increase to $15 an hour is a palliative solution. You can’t live on the current minimum wage? You can’t live on $15 an hour either.
In Alabama and Mississippi, for instance, it takes around $20 per hour for a single parent to raise a child, according to MIT’s living wage calculator. From there, the Times concludes: “Sooner or later, Congress has to set an adequate wage floor for the nation as a whole. If it does so in the near future, the new minimum should be $15.”
Doubling the minimum wage sounds great, until one realizes that it doesn’t solve the problem on the “living wage” side of the equation. Maybe $15 is some arbitrary number that somebody pulled out of their butt. Maybe it was the number that a national poll found to be “reasonable” to the sort of people who answer the phone when a national polling company calls. It is nice and round, and people do so love round numbers.
The Times, smarting from the smack the last time it tried to pull this off, offers a tepid effort at pretending otherwise.
In addition, a $15 minimum in 2021 would meet, not exceed, the benchmarks accepted by most economists. A minimum wage is generally considered adequate if it is equal to at least half of the average hourly wage, which is now about $27 in the state. That means a $30 average wage and a $15 minimum in 2021 would be fair and reasonable.
Cite? Nope. And there are plenty of economists who apparently aren’t aware that that this is what the consensus is, according to the Times. But at $15 an hour, a third less than what’s needed in Alabama, no less New York, to survive, we’ve put a Band-Aid on a very hungry child. Let’s pat ourselves on the back for being so socially justice-y.
But then, there’s the flip-side of the equation. The Times, as is its wont, points at the greedy corporations, with their CEOs bathing in champagne. While the unseemliness of top corporate executive salaries are certainly cause for castigation, it’s a separate problem, and a facile stalking horse. Most employers are mom and pop shops, and they too are struggling to survive.
More to the point, the New York Times, and wage-earners, ignore a basic idea of business. If businesses do not turn a profit, they have no reason to exist. If they don’t exist, they can’t hire anybody. If they can’t hire anybody, you might as well have a $100 an hour minimum wage, because it doesn’t make any difference if you don’t have a job. Hate business owners all you want, but without them, you don’t work, and you don’t earn a wage, living or otherwise.
How do wages rise to the point where they are sufficient for regular folks to survive, if not thrive? One theory is that a robust economy creates upward pressure on wages, when employers have to pay more to get people to work for them, because the potential employees have plenty of opportunity to find jobs. And then these well-paid employees have money to spend, and they spend it, and the economy continues to grow.
But even that doesn’t quite address all concerns, and the implications could prove devastating.
One danger is that a high minimum wage will push some workers out of the labour force for good. A building worker who loses his job in a recession can expect to find a new one when the economy picks up. A cashier with few skills who, following the introduction of a high minimum wage, becomes permanently more expensive than a self-service checkout machine will have no such luck. The British government’s defence of its new policy—that a strong economy will generate enough jobs to replace those lost to a higher minimum wage—is disingenuous: the jobs are still lost. That is why Milton Friedman described minimum wages as a form of discrimination against the low-skilled.
Granted, this post is a gross over-simplification, but the point is that the push to raise the minimum wage, without a meaningful discussion of how economics happen and its implications, is pandering to the populist will without giving thought to the implications of the change.
And that doesn’t begin to scratch the Millennial itch of demanding high pay, no heavy lifting and jobs that value and respect their feelz. Good luck with that.
And you wonder why Donald Trump’s candidacy has captured the attention of the public, despite the apparent absence of any clue how to fix any problem. Does the New York Times, does Governor Andy, see the similarities? Pandering to the ignorant is a dangerous game, but it’s one anybody can play.