OurPeerless Leader recycled yet another timeless classic fromthe liberal playbook in his State of the Union address, exhorting Congress to spend some more of other people's money by raising the minimum wage.
The Times will never tire of this idea, so let's check their reporting. This nugget defies credulity, but is presented uncritically:
The White House said that the move would have profoundly positive effects for low-income families without unduly burdening businesses or raising the unemployment rate. It cited research showing “no detectable employment losses from the kind of minimum wage increases we have seen in the United States.” The White House also pointed to companies like Costco, the retail discount chain, and Stride Rite, a children’s shoe seller, that have previously supported increasing the minimum wage as a way to reduce employee turnover and improve workers’ productivity.
Now wait - surely they can't mean that CostCo thinks that paying a higher wage to its own workers would reduce turnover but only if other firms were also obliged to raise wages? Even a Times reporter might be able to guess that CostCo would have an even easier time retaining good employees if it paid above the current minimum wage.
In fact, the CostCo CEO in question has the classic corporatist view of using government as a way of imposing costs on his competitors while extracting benefits for his own firm. Here is the WaPo, describing their strategy during the 2006/07 minimum wage scuffle. CostCo already pays above the minimum but woul dlike to burden its competitors and see more money in the pockets of their customers who keep their jobs (my emphasis):
Jim Sinegal, a maverick entrepreneur who founded Costco in 1983 and has resisted Wall Street pressure to cut wages and benefits for his 130,000 employees, said he signed onto the effort because he thinks a higher minimum wage would be good for the nation's economy as well as its workers.
"The more people make, the better lives they're going to have and the better consumers they're going to be," Sinegal said in an interview. "It's going to provide better jobs and better wages."
Sinegal is one of dozens of business owners and executives [that]... are lending their voices to an effort called Business for a Fair Minimum Wage, a project of Business for Shared Prosperity, an organization of "forward-thinking business owners, executives and investors committed to building enduring economic progress on a strong foundation of opportunity, equity and innovation," according to the organization's Web site.
Chuck Collins, the organization's director, described the group as "high-road businesses" that are already "paying well over the minimum wage" to their employees and must compete with companies that pay less. The group, Collins said, is "as nonpartisan as it gets." However, in its maiden campaign, Business for Shared Prosperity has teamed with Let Justice Roll, a coalition of church and community groups that also includes the AFL-CIO, the big labor federation.
Costco, of Issaquah, Wash., would suffer no direct impact from a higher minimum wage because its lowest-paid employees now make about $11 an hour, Sinegal said, adding that the average worker in the company's 504 stores in the United States makes $17 an hour.
"In my view, some of these industries that pay minimum wage are constantly turning their people," Sinegal said. "They spend more on turnover than they would in paying the additional wages."
I have no doubt the White House backgrounders parrotted the CostCo agenda to the Times, but is it too much to ask to expect the Times to poke at that assertion a bit? Maybe a subscription to Google (or Bing!) would be a helpful enhancement to their new effort, and would allow them to move beyoned mere White House stenography. Ahh, what am I saying?
Jared Bernstein, a former economics advisor to Joe Biden, love the idea of raising the minimum wage, so we don't expect much critical thinking from him in recounting the White House fact sheet. Still, I love this:From the WH fact sheet:
Raising the minimum wage mostly benefits adults, and especially working women: Around 60 percent of workers benefiting from a higher minimum wage are women, and few are teenagers – less than 20 percent.
Yeah, yeah. But what about college kids and recent graduates? Based on 2010 data, the Current Population Survey shows that,of 4.3 million workers at (or below, if they have tip-based income) the minimum wage, 2.1 million are aged 16-24 and 2.2 million are 25 or older. At a guess, roughly 20% are 16-19 (teenagers), 30% are 20-24 and 50% are 25 and up.
And as an anti-poverty program, raising the minmum wage is hunting with a shotgun (Sorry, Times readers, that must be a baffling metaphor - a shotgun fires pellets over a broad area; a rifle fires one bullet at the target). Let's go back to the the Times coverage of his speech:
“Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong,” Mr. Obama said in his State of the Union address Tuesday night. “Let’s declare that in the wealthiest nation on earth, no one who works full time should have to live in poverty.”
First of all, we have anti-poverty programs, including the Earned Income Tax Credit, for those rare cases of people stuck year after year in a minimum wage job with a stay-at-home spouse.
Here is the CBO from 2006 on poverty and the minimum wage. Their gist - roughly 14% of the workers who would be immediately affected by the proposed increase in the minimum wage had family incomes below the poverty line after adjusting for transfers and anti-poverty programs. And roughly 15% of the wage increases due to raising the minimum would go to these families. Raising the minimum wage is not a targeted response to a problem of low-skilled, low-paid workers who can't manage an occasional merit raise.
But we don't expect logic or evidence to play into this debate. Democrats live to spend other people's money and raising the minimum wage lets them do so without even needing to pretend to worry about the deficit.
Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly-paid workers, they made up about half of those paid the Federal minimum wage or less. Among employed teenagers paid by the hour, about 23 percent earned the minimum wage or less, compared with about 3 percent of workers age 25 and over.