Human Events Blog

The minimum wage conundrum

The latest Pew Research survey has produced all sorts of conflicting information about the attitude of the American public toward fiscal issues, but there are a few areas of fairly solid consensus.  One of them concerns raising the minimum wage:

By a wide margin (71% to 26%), the public favors increasing the minimum wage from its current level of $7.25 per hour to $9.00 an hour. But while large majorities of Democrats (87%) and independents (68%) favor raising the minimum wage, Republicans are evenly divided (50% favor, 47% oppose).

Among all Republicans and Republican-leaning independents, those who agree with the Tea Party oppose the proposed minimum wage hike by two-to-one (64% to 32%). Those who have no opinion of the Tea Party, or disagree with it, favor increasing the minimum wage by 60% to 36%.

The minimum wage is a curious beast.  There’s plenty of evidence that increasing it hurts the very people most proponents of a wage increase would profess to be concerned about: the working poor and young people.  As the saying goes, the true minimum wage is, and always will be, zero dollars per hour, which is what you earn when you don’t have a job at all.  (Thanks to the rise of Food Stamp Nation, that’s not what you receive when you’re unemployed for a long period of time, but that’s a different discussion.)

This evidence is almost completely irrelevant to much of the American public, however.  They just about always favor modest, frequent increases in the minimum wage.  Throw up an argument from the absurd – why not just raise it to $100 per hour and make everyone instantly rich? – and people will recoil, although sometimes they have trouble explaining exactly why.  They’ll eventually concede that a $100/hour minimum wage would produce ridiculous amounts of inflation.  We’d not only be earning $100 per hour for the most elementary entry-level job, but we’d be paying prices that factored in the ridiculously high minimum wage.  Hello, hundred dollar hamburger!

But raising the minimum wage a buck or two, every few years, is pretty much always a winner with the public.

My question for supporters is: Why do have to raise the minimum wage?  I thought there was no inflation to speak of.  If that’s true, then how can a higher wage floor be necessary to help entry-level workers keep their heads above water?  What forces make it necessary to increase the cost of labor in a weak job market that hasn’t been able to get real unemployment below double digits for the past four years?

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