Senate Votes Down Minimum Wage Increase

The Democrats in the Senate tried to get an amendment to a defense authorization bill that would have incrementally boosted the minimum wage 40%, from $5.15 an hour to $7.25 by January 1, 2009. There hasn’t been an increase since 1997. While the measure had 52 votes in its favor out of 100, 60 votes were needed to end debate and get a proper up and down vote. Nonetheless, the Democrats have begun to learn the Republican trick of getting their opponents' votes down on the record. Then, hang them with their record in November.

The minimum wage debate is, at least, subject to reason, unlike the GOP’s favorite wedge issues of homosexual rights, establishment of an official religion and flag burning. There are legitimately two sides to the argument. On the one hand, the value of the minimum wage is at its lowest since the 1950s thanks to inflation. On the other hand, businesses claim that an increase in the wage would result in fewer jobs for the least skilled. An appeal to the facts should sort this out.

According to the Economic Policy Institute, increases in the minimum wage don’t measurably reduce the number of jobs at the low end of the pay scale. Contrary to reason as this may appear to those with business degrees, the explanation is simple enough – the elasticity of demand for these jobs is quite low. In other words, if a CEO has to pay the toilet cleaner an extra $2 an hour, he will rather than do it himself or getting the head of marketing to do it. If a business gets $10 of productivity out of a worker earning $9 an hour, the business is ahead. Only when the minimum wage exceeds the value of the work done is it detrimental to business. A good manager can find productive things for low-skilled staff members.

This, however, ignores the big political issue. The Senate Republicans are now on record (most of them) as opposing an increase in the minimum wage. That can be played, Karl Rove style, as “they hate poor people.” In fairness, the GOP-controlled House Appropriations Committee included the wage hike in a labor and health spending bill for fiscal 2007 in a vote taken last week. However, that takes longer to explain than “they voted against it.”

There are many other issues that the Democrats can get into the record before the August recess and the autumnal campaign. The silly debate on redeploying from Iraq (out by July 2007 or start getting out now, and finishing someday) is a start – most Americans want out, and the GOP wants to stay the curse (not a typo). Outsourcing of jobs, stock scandals, lack of health insurance, and more await the Democrats if they really work at it. The strategy works, and it has taken the Democrats far too long to realize it. One wonders if it isn’t too late, now.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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