George will: Let them eat cake!

Posted by Joshua Holland at 10:08 AM on January 4, 2007.

There are, of course, no good arguments against raising the minimum wage -- eroded by inflation to its lowest real value since 1955. So let's take a look at George Will's latest column -- in which he calls for its abolition -- for a sort of taxonomy of really bad arguments.

Before Will even gets to those bad arguments, he parrots a popular but entirely meaningless meme that's gained great currency on the right …

Today, raising the federal minimum wage is a bad idea whose time has come, for two reasons, the first of which is that some Democrats have an evidently incurable disease -- New Deal Nostalgia. Witness Nancy Pelosi's "100 hours" agenda, a genuflection to FDR's 100 Days. Perhaps this nostalgia resonates with the 5 percent of Americans who remember the 1930s.

Allow me to translate from wingnuttese to English: If we define the New Deal not only as a basketful of Roosevelt's policies in the 1930s but as a consensus that guided the hand of government during the period between the end of World War II and the rise of the new conservative movement in the 1970s -- as one should do -- then Will is saying that Democrats are nostalgic for a time when the very idea of corporate accountability was born; a period in which America experienced an unprecedented increase in shared prosperity; an era when a huge middle class was built and a single semi-skilled worker could afford to raise his or her (mostly his) family with a modicum of dignity; an era when people had the reasonable expectation that their kids would have an opportunity to do better than they did and a time when government attracted halfway intelligent people who believed in public service instead of the half-witted hacks that the Hart-Rudman Commission in 1999 found to be the ultimate cause of an "unprecedented crisis of competence in government."

Yeah, George, count me "nostalgic" for those days.

With that rant out of my system, let's go to Will's assault on the federal minimum …

Most of the working poor earn more than the minimum wage, and most of the 0.6 percent (479,000 in 2005) of America's wage workers earning the minimum wage are not poor.

Here's a nice bit of sleight-of-hand: the Bureau of Labor statistics says: "Of those paid by the hour, 479,000 were reported as earning exactly $5.15, the prevailing Federal minimum wage. Another 1.4 million were reported as earning wages below the minimum. Together, these 1.9 million workers with wages at or below the minimum made up 2.5 percent of all hourly-paid workers."

Of course, if you're making, say, $6 bucks an hour you're earning more than the minimum wage, but you'd still get a much-needed pay-hike if the minimum went to $7.25. How large is that group?

EPI:

An estimated 14.9 million workers (11% of the workforce) would receive an increase in their hourly wage rate if the minimum wage were raised from $5.15 to $7.25 by 2008. Of these workers, 6.6 million workers (5% of the workforce) currently earn less than $7.25 and would be directly affected by an increase. The additional 8.3 million workers (6% of the workforce) earning slightly above the minimum would also be likely to benefit from an increase due to "spillover effects".

Back to Will …

Only one in five workers earning the federal minimum lives in families with earnings below the poverty line. Sixty percent work part time, and their average household income is well over $40,000. (The average and median household incomes are $63,344 and $46,326, respectively.)

Those earning the minimum wage working part time are, of course, just keeping themselves busy while their yachts are in dry dock getting thoe pesky barnacles removed.

Anyway, the federal poverty rate for a single person is $9,800 per year, which means that even if "only" one in five earners getting the minimum are beneath the poverty line -- Will's throw-away statistic is actually a tragic aspect of the American economy -- there are many, many more who are simply "poor" by any reasonable standards.

Forty percent of American workers are salaried. [Note: this is just wrong -- over 60% are, according to the BLS] Of the 75.6 million paid by the hour, 1.9 million earn the federal minimum or less, and of these, more than half are under 25 and more than a quarter are between ages 16 and 19. Many are students or other part-time workers. Sixty percent of those earning the federal minimum or less work in restaurants and bars and earn tips -- often untaxed, perhaps -- in addition to wages.

Shorter George Will: None of my white, upper-class patrician friends earn the minimum, so therefore it should be abolished.

Seriously, this isn't even an argument. Many lower income families depend on the extra income brought in by a part-time worker, many students rely on those earnings to get through school and George Will knows perfectly well that while the federal minimum is $5.15 an hour, most servers who get tips are exempt and can be paid as little as $2.13 an hour.

Two-thirds of those earning the federal minimum today will, a year from now, have been promoted and be earning 10 percent more.

That's right, folks, many earning $5.15 an hour will, a year from now, be earning more than $5.70! Go capitalism!

Now, brace yourself. We are about to witness one of the most muddled and contradictory pairs of paragraphs in the history of Beltway punditry:

The federal minimum wage has not been raised since 1997, so 29 states with 70 percent of the nation's workforce have set minimum wages between $6.15 and $7.93 an hour. Because aging liberals, clinging to the moral clarities of their youth, also have Sixties Nostalgia, they are suspicious of states' rights. But regarding minimum wages, many have become Brandeisians, invoking Justice Louis Brandeis's thought about states being laboratories of democracy.

But wait. Ronald Blackwell, the AFL-CIO's chief economist, tells the New York Times that state minimum-wage differences entice companies to shift jobs to lower-wage states. So: States' rights are bad, after all, at least concerning -- let's use liberalism's highest encomium -- diversity of economic policies.

Got that? Liberals were opposed to "states' rights" in the 1960s, so they're hypocrites for advocating a raise in the federal minimum wage today. (Never mind that their opposition wasn't to states' rights per se, but to the argument that states should have the right to maintain racially segregated schools and public facilities.) In the immortal words of a wise Bunny: "what a maroon!"

The problem is that demand for almost everything is elastic: When the price of something goes up, demand for it goes down. Obviously were the minimum wage to jump to, say, $15 an hour, that would cause significant unemployment among persons just reaching for the bottom rung of the ladder of upward mobility.

There is a mountain of evidence that raising the minimum wage by a couple of bucks doesn't result in job loss. So the wingers do this dance with the straw-minimum of $15 (most like to use $40 or $50 an hour). It is entirely beside the point in a discussion of phasing in an increase to $7.25 an hour.

But suppose those scholars are correct who say that when the minimum wage is low and is increased slowly -- proposed legislation would take it to $7.25 in three steps -- the negative impact on employment is negligible. Still, because there are large differences among states' costs of living and the nature of their economies, Sen. Jim DeMint (R-S.C.) sensibly suggests that each state be allowed to set a lower minimum.

Because there isn't a state in the nation where the federal minimum even approaches a living wage, Jim DeMint's argument is pure gobbledy-gook.

But the minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices. Washington, which has its hands full delivering the mail and defending the shores, should let the market do well what Washington does poorly. But that is a good idea whose time will never come again.

One of the biggest of the Big Lies underpinning neoliberal economics is that wages -- especially for unskilled or semi-skilled workers -- are set by "natural" laws of supply and demand. The truth is that wages for people without highly-sought after skills are only determined by the market when they're bargained collectively. Individual workers don't have perfect information about the market and the fact that they'd starve without that minimum wage job is a form of de facto coercion -- the imbalance of power makes a mockery of the idea that low-end wages are determined in some kind of fairly-negotiated transaction.

Conservatives like Will don't like government intervention, but they don't spend much time bitching about the 30-year assault on organized labor that's left most American workers with nowhere else to turn.

That concluding graph is the epitome of George Will: he's no culture warrior; his is the deeply immoral -- maybe "amoral" is the better word -- Big-business worshipping conservatism that has long provided a thin intellectual cover for greed and exploitation. What he calls a "commodity" is in fact how most Americans put food on their families.

Having said that, I think the fact that the right is bitching about a long-overdue raise in the minimum wage is a great thing -- it's the kind of evidence of how divorced what passes for "conservatism" is from the experiences of ordinary people that we need if we're ever going to exile it back to the political wilderness where it belongs.

I will leave you with some facts from EPI to use in your next argument with that fascist neighbor next door:

• The earnings of minimum wage workers are crucial to their families' well-being. Evidence from an analysis of the 1996-97 minimum wage increase shows that the average minimum wage worker brings home more than half (54%) of his or her family's weekly earnings.
• An estimated 1,395,000 single parents with children under 18 would benefit from a minimum wage increase to $7.25 by 2008. Single parents would benefit disproportionately from an increase -- single parents are 9% of workers affected by an increase, but they make up only 7% of the overall workforce. Approximately 3.9 million parents with children under 18 would benefit.
• Adults make up the largest share of workers who would benefit from a minimum wage increase: 80% of workers whose wages would be raised by a minimum wage increase to $7.25 by 2008 are adults (age 20 or older).
• Over half (54%) of workers who would benefit from a minimum wage increase work full time and another third (30%) work between 20 and 34 hours per week.
• Women are the largest group of beneficiaries from a minimum wage increase: 59% of workers who would benefit from an increase to $7.25 by 2008 are women. An estimated 14% of working women would benefit directly from that increase in the minimum wage.
• A disproportionate share of minorities would benefit from a minimum wage increase. African Americans represent 11% of the total workforce, but are 16% of workers affected by an increase. Similarly, 14% of the total workforce is Hispanic, but Hispanics are 19% of workers affected by an increase.
• The benefits of the increase disproportionately help those working households at the bottom of the income scale. Although households in the bottom 20% received only 5% of national income, 38% of the benefits of a minimum wage increase to $7.25 would go to these workers. The majority of the benefits of an increase would go to families with working adults in the bottom 40% of the income distribution.
• Among families with children and a low-wage worker affected by a minimum wage increase to $7.25, the affected worker contributes, on average, over half (59%) of the family's earnings. Forty-six percent of such workers actually contribute 100% of their family's earnings.
• Relatively large shares of the workforce (up to 19.1%) in some Southern and Mid-Western states would benefit from an increase to $7.25.

Tagged as: will, minimum wage

Joshua Holland is a staff writer at Alternet and a regular contributor to The Gadflyer.