How could our President, who
desperately wants his intellect taken seriously, say
“Nobody knew health care could be so complicated”? Easy. Countless people say
over and over again that health care is a simple issue and they have the simple
solution. At best, their answers are partial truths, puffed up as the whole truth.
Usually their one-sided arguments are worthless. One of the causes of our
current political crisis is the insistence of so many people, who claim to be
well informed, that our big political issues are actually very simple.
The Illinois House and Senate
just passed a bill raising
the state’s minimum wage from $8.25 to $15 over the next five years. This
paper responded on June 1 with an editorial
that began with “disaster” in the headline and ended with devastation in the
final sentence: “thousands of workers will find themselves unemployed”. It said
that hypocrites who advocate increasing the minimum wage are making purely
emotional arguments, blindly following “fringe protesters”.
Ignoring the facts makes life
so simple. The minimum wage is a complex issue, like most difficult political
questions with two serious sides.
Articles against raising the
minimum wage inevitably sketch a nightmare scenario of workers being fired.
They say to working men and women at the bottom of the pay scale, “Don’t ask
for more money. It will be bad for you, take our word for it.” But instead of
taking their word, let’s find out what really happened.
A minimum wage has been
raised hundreds of times. The Business
Insider, the largest business news site on the internet, says flatly, “78
years of minimum-wage hikes have produced zero evidence of the ‘job-killing’
consequences these headline writers want us to fear. If anything, the data
suggest that increases in the federal minimum appeared to encourage job growth
and hiring.” A successful venture capitalist offered the actual
cause-and-effect of raising the minimum wage: “When workers have more money,
businesses have more customers and hire more workers. That is the virtuous
cycle that has always described the way market economies actually work.” Too
simple, but a lot more accurate than the nightmare scenarios we too often read.
This is no secret. Although
chambers of commerce attack every attempt to raise the minimum wage, a 2016
survey of 1000 American business executives conducted by a Republican polling
organization found that 80%
(not a misprint!) supported raising their state’s minimum wage, 12% were
neutral, and only 8% opposed it. Fringe protesters indeed.
Besides getting basic facts
wrong, screamers about the minimum wage leave out key facts that we taxpayers
need to know. The real value of a minimum-wage income has fallen
20%, one-fifth, over the past 35 years, despite periodic increases, because
inflation has been much faster. That is part of the broader stagnation in real
incomes for most
Americans, which haven’t budged over the past 50 years, while the top
1% tripled their household income.
Working full-time all year
for the federal minimum wage of $7.25 now qualifies
as poverty for any size family bigger than one. Millions of families of minimum
wage workers qualify for food stamps, Medicaid, and other taxpayer-financed
government anti-poverty programs. Raising the minimum wage would lower
government expenditures for public assistance, saving billions of dollars
a year. How many billions? Read 10 articles and get 10 different estimates, but
agreement that a lot of tax money would be saved.
That’s a double-edged sword,
however. If workers in the poorest families make more money, they would then
forfeit some benefits. Earning more money from working is better than getting
public assistance, in my opinion, but a wage increase of $2 might not mean $2
more total income.
It’s even more complicated,
though. If the minimum wage were raised, home health care aides, orderlies and
other low-paid medical workers who contract with Medicaid would earn more
money, forcing state governments to pay
more. Nobody I could find has calculated those costs for Illinois.
When employers say they can’t
afford raise the minimum wage, we, the taxpayers, pick up the burden they don’t
want. Illinois taxpayers and American taxpayers subsidize employers who don’t
pay a living wage. You won’t find a word about these costs to the taxpayer in
the arguments against raising the minimum wage.
A minimum wage is a political
construction, built by a society to insure that all its members can live decent
lives. Because employers seek to pay their workers as little as possible, it
has to be created by a popular consensus. These days it seems like the
political commentators who try to make it impossible to reach any consensus get
the most air time.
What level of wage is too
low? Should employers be able to pay workers for a full-time year-round job so
little that taxpayers have to support them with food stamps and Medicaid?
Tough question. But the bad
things threatened by opponents of the minimum wage won’t happen. Good things
they don’t tell us about will happen.
Do I have every detail right
here? There are alternative ways of calculating every economic statistic under
the sun. But there’s nothing here that is not repeated in countless expert
analyses. Will I call my minimum-wage opponents hypocrites? Will I announce “disaster”
if my suggestions aren’t followed?
I don’t think that helps
anyone.
Steve Hochstadt
Jacksonville IL
Published in the Jacksonville
Journal-Courier, June 6, 2017
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