Well, ok, then:
The state’s controversial law calling for an automatic review of the minimum wage each year does little to harm business and benefits the vast majority of low-paid workers, a new study by Washington State University says…
The study…found the increase will have a mostly positive effect on the state economy. [Emphasis added.]
I don’t expect this research to be the last word in the minimum wage debate. But it’s fairly consistent with other empirical work, finding that—contrary to standard economic theory—hiking the minimum wage is generally a net plus to low-income workers.
But try telling that to the critics.
Find this article interesting? Support more research like this with a year-end gift during our Fall Fund Drive!
To get into the details a bit: the study apparently found that a 5 percent increase in the minimum wage in Washington state would reduce the number of minimum wage jobs by 2.5 percent, while dragging down state GDP by a vanishingly small .006 percent. Meanwhile, the remainder of minimum wage workers get a small but significant income boost, and total wages paid to the lowest tier of workers (combining salary increases with job losses) rises by several percentage points.
Now, just to state my biases explicitly—I view the tiny decline in GDP as irrelevant, the gain of income for low-income workers as a clear benefit, and the slight loss of low-wage jobs as a potential downside—and something to take quite seriously. But overall, hiking the minimum wage advances some reasonable objectives: helping the majority of low-income workers without harming the rest of the economy.
The critics, naturally, are incensed:
Lynn Harsh, chief executive of the Evergreen Freedom Foundation, a free-market think tank in Olympia, said it is “ignorant and arrogant for politicians to decide economic winners and losers.”
She also said the 2 percent to 2.5 percent of workers who will lose their jobs because of the increase are often people who can least afford to be out of work.
Lynn Harsh: what an appropriate name.
On the latter point, complaints about job losses seem like crocodile tears to me. I mean, I’ve heard all sorts of opposition to minimum wage increases, on the grounds that they help people who don’t actually need a raise: say, teenagers from well-off families who are only working so they can buy a better iPod. But the mention of job losses—no matter how small—elicits handwringing that poor folks might be frozen out of jobs.
Now, it’s not that those critiques have no merit. It’s just that they’re selective. I mean, the converse is also true: to the extent that job losses are real, they may fall on people who don’t actually need a job; while wage gains will benefit people who desperately need (and deserve) a raise. The sleight of hand comes from highlighting the arguments that match their biases, while ignoring the ones that are ideologically inconvenient. Maybe it’s effective rhetoric, but it’s dishonest.
On the former point—the claim that it’s “arrogant” for the public to decide that low-income workers deserve a decent wage: what’s the alternative? Well, in essence, it’s to let the shareholders of Mickey D’s and Walmart—or, more generally, impersonal market forces—dictate the terms of employment for the lowest rung of workers. And left to itself, “the market” would prefer to squeeze low-income wages as low as possible. So is that idea—that the market decides what is fair, and the devil take the hindmost—really what they’re selling as an antidote to arrogance? Really?