The following anonymous letter to Congress was recently leaked to Chronicle Associate News Editor Cheryl Smith by an imaginary source in D.C. How its author managed to sneak onto the Oct. 11 media conference call mentioned below, we have no idea.
Congress, you’re kicking ass! Dec. 1 is nearly here and you still haven’t surrendered to those pesky calls to raise the federal minimum wage. If you can hang on for six more weeks, you’ll beat your minimum-wage-stagnation record – nine years and three months without an increase. Way to go!
This is no time to slack off, however. Troublemakers wanting to put the brakes on the country’s drive toward greater economic inequality and a more rigid class structure are gathering steam. More than 650 smartypants economists, including five Nobel Prize winners, signed onto a very mouthy joint statement (www.epi.org/content.cfm/minwagestmt2006) issued on Oct. 11 by the Economic Policy Institute, a D.C.-based “think tank” that focuses primarily on labor issues. The statement urges Congress and state policymakers to raise the minimum wage from $5.15 to $7.25 an hour. Robert Solow, an MIT economics prof and a 1987 Nobel Prize winner, even went so far as to say in a teleconference the day the statement was released, “There is, to tell you the truth, nothing but bloody-mindedness that keeps us [from] going ahead with this.”
So this “institute,” along with the Center on Budget and Policy Priorities, issues an irreverent brief a few months back (www.epi.org/content.cfm/issueguides_minwage) about our country’s labor market – saying, among other negative things, that the minimum wage is at a 60-year low, and that the millions of U.S. workers earning $5.15 an hour can afford to buy the least amount of goods they have been able to in 50 years – and people like Solow think they can go around calling Congress bloody-minded. The nerve!
Over the summer, lawmakers twice successfully killed bills that would have raised the federal minimum wage to $7.25 an hour. Several states, however, think they’re capable of taking care of their own business and have raised, or are trying to raise, their minimum wages. Five states have actually raised their minimum wages during the past year, and another six – Arizona, Montana, Nevada, Missouri, Colorado, and Ohio – have minimum-wage increase initiatives on their November ballots. Other states have legislators who are trying to make the federal government look bad by pushing minimum-wage hikes. In Texas, for example, members of both the House and the Senate plan to file such bills during the next legislative session. Don Baylor, a policy analyst with the Austin-based Center for Public Policy Priorities, issued a policy brief Oct. 11 called “Why a Minimum Wage Increase Would Be Good for Texas” (www.cppp.org/research.php?aid=566), saying “Texas can – and should – raise its state minimum wage to at least $6.15 an hour.” (But you know these CPPP people can’t be trusted to be “objective” – they advocate for the poor.)
The know-it-all economists will no doubt encourage more of this disrespectful behavior with their above-mentioned manifesto. “As with a federal increase, modest increases in state minimum wages in the range of $1 to $2.50 and indexing to protect against inflation can significantly improve the lives of low-income workers and their families,” their statement reads. It also says that a “modest” minimum wage increase would not have the adverse effects that critics have claimed. In particular, they parrot the kneejerk Council of Economic Advisors that “the weight of the evidence suggests that modest increases in the minimum wage have had very little or no effect on employment,” even adding the ridiculous claim that “most of the beneficiaries are adults, most are female, and the vast majority are members of low-income working families.”
In the teleconference, Solow even said that the economies of states that have raised their minimum wages haven’t been harmed by competition from states that have lower wages, because most of the employees affected by the raises work in the service sector. “You would have to buy your hamburger in another state. You would have to have your hotel bed made in another state. … [It] doesn’t seen plausible.”
Who does he think he is – a Nobel Prize winner?
Effect in Texas of Proposed State Minimum Wage Increase from $5.15 to $6.15 an hour:
• 523,000 workers – about 5% of total workforce – would be directly affected by an increase and would earn an average pay raise of $0.46 an hour. These workers currently earn less than $6.15 an hour.
• Another 543,000 workers currently earning above $6.15 an hour would be indirectly affected. The new floor would push their wages up an additional $0.23 an hour on average.
Source: Center for Public Policy Priorities
This article appears in October 20 • 2006.