Monday, May 5, 2014

Hurting and Helping

Friday on Ken and Mike's WGAN radio show, Sen. Susan Collins backed into a revealing explanation of her thinking about the minimum wage [7:06]:

I was so frustrated that those of us who want to see an increase in the minimum wage but believe that $10.10 would actually harm the very people we're trying to help were not given an opportunity to offer alternatives.(Emphasis added.)

During the interview, Collins never qualifies or expands on her view that boosting the minimum wage to $10.10 in three phases between now and 2016 would be, essentially, a self-defeating policy.

But that's a controversial stance--or ought to be.

Because while there are plausible (if mostly weak) arguments to be made about the downsides of a significant minimum wage increase, harm to the workers themselves isn't one of them.

After all, the very Congressional Budget Office study that Collins cites approvingly in the interview projects that a $10.10 minimum wage would lift 900,000 out of poverty and boost wages for 16 million Americans. It also estimates a loss of 500,000 jobs, but as center-right economics writer Josh Barro notes, that's a trade well-worth making:

For every person put out of work by the minimum wage increase, more than 30 will see rises in income, often on the order of several dollars an hour. Low--and moderate--income families will get an extra $17 billion a year in income, even after accounting for people who get put out of work; for reference, that's roughly equivalent to a 25% increase in the Earned Income Tax Credit.

In the context of those numbers, the only way to oppose a $10.10 minimum wage based on its impact on workers is to maintain that any job loss is unacceptable. But if that's the new standard, Washington should simply throw in the towel on policy-making altogether. Because all legislation--even something as benign as expanding access to the potato in federal nutrition programs--is bound to affect some workers negatively in an economy as large, complicated and interconnected as ours.

Which is why policies should be evaluated on the basis of their overall impact rather than a single cherry-picked statistic.

Collins knows this, of course. So when she talks about $10.10 harming "the very people we're trying to help" it seems safe to say that something other than a neutral cost-benefit analysis is at work.

Specifically, this looks an awful lot like a Washington veteran and a friend of the restaurant lobby straining to conflate the narrow legislative aims of a privileged constituency with the economic interests of Americans more broadly.

Granted, accepting that what's good for McDonald's is good for its workers requires a certain amount of tortured thinking. But when you spend decades ensconced in the beltway, giving disproportionate attention to the most powerful corporate voices at the expense of the regular people, it's the sort of argument that you can't help but find yourself spouting.

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