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Ron Unz's Latest: "A Minimum Wage Hike as Amnesty-Killer?"
Ron Unz, at the American Conservative, points out ; the political advantages of raising the minimum wage by a large enough figure. If you raise it high enough, you'll start raising the wages of white people, not just minorities and illegal immigrants. Those are people who vote, for one thing.
As an example, although the audience and participants skewed heavily toward the “economic left,” several individuals mentioned how surprised they were to encounter the suggestion that our federal minimum wage be raised to $12.00 per hour—my proposal—or even higher, a notion that seemed almost unimaginable within their own policy circles. Meanwhile, former Democratic Congressman and Cabinet Secretary Dan Glickman described the politics of raising the minimum wage as being extremely difficult, given the intensity of opposition he had always encountered among many small businessmen.
These two issues are not unconnected. As I pointed out in response to Glickman’s question, a small rise in the minimum wage—such as the $9.00 figure proposed by President Obama—has limited political viability since it generates little of the enthusiasm necessarily to overcome the determined opposition of its ideological or practical opponents. Only a narrow sliver of American workers would directly benefit, their net dollar gains would be relatively small, and they represent an economic stratum that overwhelmingly votes Democratic, whenever it bothers to vote at all. ;How would such a measure ever stand a chance of passing the Republican-controlled House?
But consider the very different politics of a $12.00 figure. ;Over 40% of all American wage-workers would benefit, including 40% of the white Southerners who constitute the Republican base, and the mean gains for both those groups would be over $5,000 per year. Such an enormous sum of money would capture the imagination of its potential recipients, and also that of their immediate family members. ;Conservative ideologues such as Rush Limbaugh would surely denounce the proposal, but many of his ditto-heads are struggling with credit-card and mortgage loans, and for an extra $5,000 per year they’d surely turn a deaf ear to his arguments or even decide to turn their radio dial. ;The intensity of support for such a minimum wage hike would become every bit as great as the intensity of the regular opposition cited by Glickman. ;Offering people serious money may get their serious attention.
;A further sign that these sorts of major economic proposals are rare as unicorns among DC’s affluent, white-collar denizens came from some of the practical objections raised. ;Various participants and audience members wondered if a large rise in wages might not hurt America’s working classes more than it helped them, by raising the prices they paid for goods and services and cutting their government benefits. ;Wouldn’t McDonalds have to charge them more for hamburgers, and wouldn’t the working-poor lose access to food stamps and have their EITC checks reduced?
A moment’s thought shows that these tradeoffs are trivial. ;Only a small fraction of working-class dollars are spent at the sort of labor-intensive businesses whose prices would rise, and even for those companies, only a small fraction of their costs would be impacted. ;One panelist who had run the numbers explained that a 10% rise in the minimum wage would increase the costs and prices of such businesses by much less than one percent. ;And if your wages have grown by $4.00 per hour then having to pay an extra dime for the occasional Burger King Whopper is hardly a major burden.[More]
There's a lot more at the link. See also