- - Thursday, April 9, 2015

ANALYSIS/OPINION:

Sen. Rand Paul announced his candidacy for president this week, much to the delight of supporters who believe that government policies often do more harm than good. One issue Mr. Paul has relied on to make his argument on government intervention is the minimum wage.

Mr. Paul told ABC News, “The least skilled people in our society have more trouble getting work the higher you make the minimum wage.” The other declared nominee, Sen. Ted Cruz, has made similar comments: “If you raise the minimum wage, the inevitable effect will be young people will lose their jobs or not be able to get their first jobs.”

Polling by ORC International suggests that those who follow Messrs. Paul and Cruz into the primary contest should also follow their lead on how best to explain the not-so-hidden effects of minimum wage policies: Focus on consequences. While 72 percent of poll respondents initially support a $10.10 wage, when the unintended outcomes of job loss among young and low-skilled employees is explained, support plummets to less than 40 percent. That’s a consequence that resonates with most voters: With 25 percent of black youth in the labor force looking for work but unable to find it, we are slow-walking into an entry-level employment crisis for young and unskilled applicants.

Clearly, the employment market for entry-level work is being distorted from historic norms. Today the Census Bureau reports that average family income of a minimum-wage employee is more than $53,000. Translation: If business has to pay more for entry-level labor they will hire from a different pool of more qualified applicants.

Past Republicans candidates, however, have not always been so reasoned, often arguing that the federal minimum wage should be abolished entirely. While such uncompromising language may appeal to a small slice of primary voters, it’s catnip for reporters and political opponents looking to portray them as extreme.

In the last presidential nominee cycle, Michelle Bachmann was forced to waste precious airtime on “Good Morning America” and “Face the Nation” defending her statement that the minimum wage should be abolished. Similarly, in West Virginia in 2010, Republican Senate hopeful John Raese drew reams of bad press for making the same argument, and later lost his election.

Here’s some advice: If you’re dead-set against any minimum wage, a freeze in the current wage floor is more politically palatable than the elimination of it. Or suggest that it is an area best left to state government. When Ronald Reagan was president, a minimum-wage bill never passed Congress. The sky didn’t fall: Instead people still got raises based on market demand and talent. In fact, research from economists at Florida State and Miami University shows that most minimum-wage employees get a raise after one to 12 months on the job.

The good news for opponents of a higher minimum wage is that the unintended (but predictable) consequences of the policy are especially clear at the moment. Businesses and their employees in Seattle, San Francisco and Oakland are facing serious challenges as a result of the recent passage of dramatic citywide wage mandates.

In San Francisco, which passed a $15 minimum wage last Election Day, two independent bookstores — Borderlands Books and Comix Experience — are relying on unique customer sponsorships to cover the minimum wage’s costs to stay in business. Other businesses and their employees have not been so fortunate. Across the bay in Oakland, which increased its minimum wage by 40 percent on March 1, the Oakland Chinatown Chamber of Commerce reports that 10 restaurants or grocery stores have closed on the heels of the hike.

It’s not just anecdotes that form the case against the minimum wage — the research does, too. The nonpartisan Congressional Budget Office — whose supportive report on Obamacare was trumpeted by Democrats a few years ago — has also predicted that a substantial hike in the mandated wage would be a job-killer. The market interventionists predictably argue the CBO got it right the first time and wrong the second.

Judged by the media coverage during the last presidential election cycle, it’s clear that the press is going to attempt to bait Republican contenders into saying something outlandish. They should avoid the temptation. Focus instead on giving considered responses about the people who are hurt by the consequences of “compassionate” government policy. Unfortunately the examples are all around us.

Rick Berman is president of Berman and Co., a Washington public affairs firm.

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