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Myth of Minimum Wage as Job Killer Persists

Earl Ofari Hutchinson, Special to The Informer from New America Media | 1/15/2014, 3 p.m.
The GOP has ruthlessly sold the outlandish myth to millions that a hike in the minimum wage is a huge ...
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The GOP has ruthlessly sold the outlandish myth to millions that a hike in the minimum wage is a huge job killer. It has been so effective in its hard sell that President Obama and Congressional Democrats have repeatedly been stymied and frustrated in every effort they’ve made to boost the minimum wage nationally. And almost certainly, Obama in his State of the Union Address later this month will again demand that Congress, meaning House and Senate Republicans, immediately raise the minimum wage. Some states have hiked the old, archaic, and pitifully low standard minimum wage from $7.25 to a double digit figure that faintly resembles a living wage. The current federal minimum wage amounts to slightly more than $15,000 in annual income. That’s not even close to the amount needed to keep a family of four out of the soup lines. You’d have to go back more than four decades, to 1968, to find the last year that the minimum wage actually kept pace with inflation for workers.

House Speaker John Boehner in a pithy, horribly simplistic, but effectual retort to the cry for a minimum wage increase, said, “When you raise the price of employment, you get less of it.” Boehner and Congressional Republicans cherry pick a few dated studies and some anecdotal employment figures in some low wage, low unemployment states such as North Dakota to make the case that the minimum wage hurts the economy. At first glance, that seems compelling enough. But it ignores other low wage states that have boosted the minimum wage and where there’s been no plunge in employment, or wholesale flight of employers from those states to low wage states that won’t boost their minimum wage a penny higher than the federal minimum wage.

Boehner also ignores recent studies that found that states that have boosted their minimum wage have not had a plunge in hiring. It doesn’t take a course in Economics 101 to figure out that employers increase production and sales when there’s demand. Demand increases when workers have enough cash in their pockets to buy more goods and services. It also doesn’t take a seat in the same Econ class to know that lower job turnover boosts productivity and reduces business costs. This adds tens of billions more to the economy which translates out to job growth.

So studies overwhelmingly back up a huge bump up to the economy from a decent minimum wage. Polls show that the overwhelming majority of Americans support a minimum wage hike, and that includes a significant number of Republicans. Yet, the GOP despite its unpopular, bogus argument against a minimum wage increase has still managed to get its way.

It comes down to two things. One is the millions that buy the notion that a minimum wage hike is a bad thing. This belief is based in part on blind adherence to Republican dogma, in part on kneejerk opposition to anything that Obama and the Democrats propose, just as reflexive knee jerk opposition to labor unions that have traditionally been in the forefront of the fight for a minimum wage hikes, as well as the legitimate fear that business owners will simply pass along any wage increase to consumers by boosting prices on goods.