Commentary

Researching the Minimum Wage

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On April 15 Nathan Strout’s “Fuzzy Math in Push for Raising the Minimum Wage” questioned how deeply the Maine Peoples Alliance (MPA), its allies, co-conspirators, dependents and servants have researched the economic consequences of raising the minimum wage. His conclusion: “Ultimately, this minimum wage initiative is based on nothing but wishful thinking and arbitrary numbers.”

It grieves me to do this, but I must disagree with my young colleague’s conclusion. The MPA has done all the research necessary to tell them the minimum wage polls well. For example, a 2013 Gallup Report told them that, “With momentum building at the federal and state level to increase hourly base pay, more than three-quarters of Americans (76%) say they would vote for raising the minimum wage to $9 per hour [it was then $7.25] in a hypothetical national referendum. About one-fifth (22%) would vote against this.”

Those opposing it, according to the Gallup people, are mostly Republicans. This is because Republicans are bad people.

More up-to-date polling data is available at RaisetheMinimumWage.com. There we learn that, in January 2015, Hart Research Associates reported overwhelming support for a Federal Minimum Wage of $12.50 or above. The associates found that 75 percent of Americans support raising the federal minimum wage to $12.50 by 2020. Ninety-two percent of the Democrats, 73 percent of the Independents, and 53 percent of the Republicans favored this. [If this is accurate a qualification seems to be in order here. It’s not true that all Republicans are bad people. It’s just that all the bad people are Republicans.]

An outfit called “Victoria Research” also supplies a whole bunch of nifty figures. I loved this one especially: “69 percent of unregistered respondents say they would register to vote if there were a presidential candidate who supports raising the minimum wage to $15 an hour and making it easier for workers to join a union.” If you want to read more good polling news, go to the website cited above. There’s lots of it. The MPA’s “complete disregard for its [minimum wage] economic impact” makes perfect sense. They have polls showing it’s a political winner. What more do they need?

I had some personal experience with this indifference to evidence when the issue arose during the Baldacci Epoch. I called the Maine Department of Labor to find out what relevant data they had supplied to the governor and legislature. They had supplied none. No one asked them. The helpful young fellow at the other end of the line recommended the epi.org website.

The fact that the Economic Policy Institute (EPI) board includes the leaders of almost all of America’s most powerful labor unions hints at a political tilt. The fact that EPI’s president, Lawrence Mishel, is linked to the Democratic Socialists of America deepens the tilt. We note with interest that George Soros has donated millions to the organization. A co-founder, Jeff Faux, long ago turned against that right-wing deviationist Bill Clinton, and now he’s furiously beating the drums for Bernie Sanders.

It is intellectually barren to condemn every study and report from this group simply because of its socialist or statist tilt. Such groups have a necessary part in a serious debate. The problem is that the Maine Department of Labor seemed to be familiar only with arguments drawn from the leftward extreme. When I looked at the EPI site back then, its arguments against the minimum wage were narrowly ad hominem. Turns out the organization they identified as leading the opposition had its headquarters in the same building as a business organization. So, you see,
those opposed to raising the minimum are motivated by greed and self-interest. Their “evidence” must be fabricated and fraudulent. Case closed, further debate redundant.

As a matter of historical fact, it appears that empirical investigation of the impact of minimum wage legislation began only after 1947. Minimum wage laws had been passed a decade earlier but economists and politicians had been content with the theories that supported them.

After 1947, a growing body of research seemed to produce a consensus among economists that the minimums did more harm than good. This was challenged in 1994 by professors David Card (Berkeley) and Alan Krueger (Princeton). They studied the 1992 increase in New Jersey’s minimum wage, the 1988 rise in California’s minimum wage, and the 1990-91 increase in the federal minimum and concluded that the minimum wage leads to increases in pay, but no loss in jobs.

Liberals were delighted with the D&C findings and quickly announced that the debate was over. Forty-seven years of research had been negated. The benefits of the minimum wage are now settled economic science. We can dispense with the observations, experiences and analyses of Beth O’Connor, Nathan Strout, Jacob Posik, Dominic DeLuca, James Erwin, and Liam Sigaud. They are all right-wing ideologues writing on this right-wing website.

Has the Federal Reserve Bank of San Francisco concluded that “a reasonable estimate based on the evidence is that current minimum wages have directly reduced the number of jobs nationally by about 100,000 to 200,000? Bah! Humbug! Just another nest of right-wing ideologues!

Has the Congressional Budget Office estimated that increasing the federal minimum wage to $10.10 an hour would reduce employment by about 500,000 low-skill workers nationwide and exacerbate dependence on government welfare programs? Bah! Humbug! More disinformation from a bunch of right-wing ideologues!

Liam Sigaud cited those sources in his March 6 article. Liam is a Policy Analyst at The Maine Heritage Policy Center (MHPC). The MHPC is an organ of the right-wing ideologues. Do we need more evidence of the Falsity, Bahness and Humbuggery of his criticism of settled economic science? Only right-wing ideologues refuse to accept the verdict as final.

Hristos Doucouliagos of the Deakin University’s School of Accounting, Economics and Finance has identified some methodological defects in the K&C study. If I understand Nathan Strout correctly, he doubts that MPA mandarins and Maine’s Democratic leadership have taken the trouble to find a copy of The British Journal of Industrial Relations, Vol. 47 and examined Hristos’s “Publication Selection Bias in Minimum-Wage Research? A Meta-Regression Analysis” to examine those defects. Who can believe such a slander?

Anyway they have their polling results.

About John Frary

Professor John Frary of Farmington, Maine is a former US Congress candidate and retired history professor, a Board Member of Maine Taxpayers United and publisher of www.fraryhomecompanion.com and can be reached at: jfrary8070@aol.com

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