Tuesday, February 18, 2014
A Conservative Argument for a Minimum Wage Increase
The majority of Americans are in favor of an increase in the minimum wage which is currently $7.25 per hour. However, Republicans are opposed to any increases.
There are economic reasons to oppose a minimum wage. An increase in minimum wage tends to increase unemployment among the unskilled. Higher labor costs are passed on to customers who will see an increased cost in products and services. However, economics does not win elections; politics wins elections.
For obvious reasons an increase in minimum wage is popular with younger voters. If only Democrats support a higher minimum wage, then they will gain more younger voters and studies have shown that people tend to stick with the first political party they join. So, opposing minimum wage hikes drives voters to Democrats and giving Republicans less power in government.
Here are some facts to support an increase in minimum wages.
1. Not adjusting for inflation, the current minimum wage is 216% of what it was when Reagan became president. In the same time frame, social security recipients have gotten a bump to 255% of their 1981 level.
2. The median household income in the United States is now 279% of what it was in 1981, again more than the minimum wage increase. Another way to look at this is that in 1981 someone earning full time minimum wage made 37% of the median household income. Today they earn 29%.
3. One extreme index change is the Disneyland ticket price. In 1981 someone earning minimum wage would earn enough to pay for an all day pass to Disneyland in 3.2 hours. Today it takes 12.7 hours. Ouch!
4. A minimum wage earner trying to support a household makes so little that he or she is eligible for a wide range of government programs that cost the tax payers money. In other words, employers who take advantage of minimum wage employees let the tax payers supplement the poor wages. This is the argument conservative millionaire Ron Unz is using to back up his support for a minimum wage increase in California.
Conservative action on minimum wage should include the following:
1. Bring it up to match the increase in the past two decades for retirees and median households. This would be in the range of up to $9.50 per hour.
2. Tag future minimum wage increases to the rate of inflation. We do this for social security benefits so it makes sense to do it for wages that will support social security benefits.
3. Allow employers to pay minors a lower rate of 80% of the minimum wage. This would allow employers to maintain the current wages of jobs that are normally filled by minors. Minors can't argue economic harm from low wages because they are not responsible for maintaining their own households.
If conservatives took these actions they would reduce the number of young people that vote for Democrats and take away the issue from Democrats in all future elections. There would no doubt be some minor economic impact from making this change, but the cost of electing more Democrats to office is a far worse economic mistake.
It makes sense for conservatives to support a reasonable increase in the minimum wage.
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