Over at Outside the Beltway, the long AWOL Steve Verdon has raised his head and posted on the subject of the minimum wage. The post itself was more or less inoffensive but the way that Steve was savaged in the ensuing conversation effectively justifies his long hiatus.
Comments in the thread varied from the sensible (supply and demand for labor aren’t the only factors that determine the price of labor) to the borderline insane (workers at McDonalds deserve a $15/hour wage because the president of Expedia’s salary is in the millions). The consensus seems to be that the minimum wage should be raised because you can’t maintain a decent standard of living on $7.25 an hour (argumentum ad passiones).
I’ve raised the issue from time to time and tried to keep the discussion rational. In essence my views are:
- I think that the supply and demand for labor are important considerations but not dispositive.
- Labor conditions differ in different parts of the country.
- Consequently, a federal minimum wage doesn’t make a great deal of sense.
- There are probably places where the state or local minimum wage could be raised without throwing a lot of struggling people out of work.
- There’s no a priori way to determine the effects of raising the minimum wage in any given locality.
- Therefore it makes the most sense to raise the minimum wage locally and slowly, prepared to stop or even roll it back, depending on what happens.
I would also caution people on the moral hazard issues. A high minimum wage provides incentives for having people work off the books which in turn is an incentive to illegal immigration.
Some things to keep in mind:
- About 1.4% of workers earn minimum wage.
- Most of those are below the age of 25, immigrants, or both.
- Almost two-thirds of those earning minimum wage are women.
- Most work part time.
- Most of those earning minimum wage are in the food service or hospitality sectors.
One last thing. In the past I’ve presented a balance sheet for a typical fast food franchise operation and based on that it’s obvious that most fast food stores can’t raise what they pay their workers as much as would be required for a big increase in the minimum wage. There’s plenty of research showing that prices at fast food stores aren’t infinitely elastic so that doesn’t provide much relief.
So, have at it. What should be done about the minimum wage?
Why stop at $15? Why not $25?
Personally, I don’t see much of a federal role here for one of the reasons you cite – greatly varied local conditions. The federal minimum wage should be low – States and localities can decide for themselves what works best for them beyond that.
One of the reasons I’m skeptical about a $15/hour federal minimum wage is epitomized by the difference between Illinois and California. In California the major population centers are far from state borders. In Illinois it’s the opposite. Most of the major cities and towns are on the state’s borders with Iowa, Wisconsin, Indiana, Kentucky, and Missouri, all of which have lower state minimum wages. A high federal minimum wage hurts those states to help Illinois.
Is helping some states at the expense of others the role of the federal government? How about carrying water for state and local politicians?
The fact that one of the Presidential candidates is making an issue of a cartoon frog whose main significance comes from a couple (possibly only one) of high-schoolers trolling a journalist for shits and giggles says all that needs to be said about the national coversation.
Vote Pepe/Harambe, National Razor Party, 2016. Feels good, man!
I just learned what you were writing about. If Hillary Clinton’s campaign staff is the best that money can buy, we’re all in a heap of trouble.
And I’m not sure I can take four (or eight) years of voxsplaining without doing myself a mischief.
And I’m not sure I can take four (or eight) years of voxsplaining without doing myself a mischief.
Meme-jihadis* are usually yutes, but I’d be interested in seeing what you would do – you’re a talented man and I’m not going to underestimate you!
I believe the trick is in picking targets that cannot be underestimated, if you know what I mean.
* “Meme-jihadi” is a new word for me, as the whole Pepe the Frog thing was a new area of “knowledge”. I had been seeing that damned frog turn up off and on for years, and a lot this year, but I had no idea what it was supposed to mean. I had made a point of actively trying to avoid finding out what it was all about. It turns out it means anything you want, plus that you like to pee standing up in public – I think.
There are other things which I don’t know what they mean and don’t want to know. I had been seeing references to 4chan all year, and I resisted all attempts to explain it to me. (Unfortunately, thanks to Pepe I now know a little more.) I’ve reached an age at which I have determined NOT knowing certain things is often more useful than knowing those things. 4chan, cartoon frogs not named Kermit, and the like are better left in the dark, as are (especially) the definitions of terms of sexual deviancy that I’m not already familiar with. (And I wish I could bleach my brain to scrub it of some such terms I now DO know the definitions of – the internet is a wild place.)
Anyway, the Clinton campaign, having been punked by meme-jihadis, should have to dick-out the rest of the campaign. Figuratively, obviously, I hope.