For some time, both across the nation and recently in Iowa, the issue of raising the minimum wage has been hotly debated. Although the Iowa General Assembly has failed to ac – and working to stop it all together – it looks like Polk County and other parts of the state believe differently.
Traditionally the debate has pitted the political left, in favor, vs. the political right, opposed. That is actually a misnomer, and although almost all on the left are in favor, there are few on the right who also think it is a good idea for possibly different reasons.
The progressives see it as fairness, keeping up with inflation, the government needs to set standards, it helps poor people come out of poverty, business should get with it because it’s the right thing to do, etc.
However, there are conservative arguments in favor of raising the minimum wage, which make good sense as well and in fact are better economic arguments. For example, studies show that social welfare costs could be substantially reduced with a raise in the minimum wage. One way to look at it, is that low wage employers are being subsidized by taxpayers to the tune of billions of dollars because of the need for social welfare programs to support the working poor. For instance, a raise to $12 per hour, it has been estimated, would put $150 billion into the pockets of the working poor, thereby reducing the reliance on government social welfare programs.
In addition, there is the high probability that all those additional dollars would flow directly back into the economy – wealthy people save their money while low or moderate income folk, out of necessity, spend theirs. Another advantage is that if the minimum wage were raised to $15 per hour, on a full-time basis that is $30,600 per year or for a working couple that’s $61,200 per year. With that kind of income many would need to pay taxes, thereby increasing government revenue.
One of the arguments used by opponents is if the minimum wage was increased, less people would have a job because business would need to keep its costs in line and could not afford the higher wages, resulting in laying off some workers. That might be true in a situation where one business got an increase in costs but its competitors did not. If the minimum wage were raised throughout the economy, this would not be the case. Businesses paying employees the new minimum wage would not be at a competitive disadvantage and in fact, the employees could more readily buy its employer’s products and services.
It seems to me given the politics and the economic facts, the arguments pro and con rest on a core issue: that is should some governmental units raise the minimum while others do not? The point of view taken by some is that if the federal or state government does not do it, it is still a matter of fairness for the citizens who are affected locally. In addition, if enough local governments raise the rate eventually it will force the federal or state governments to take action.
My personal view is that it is preferable for the federal government to do it, secondly state government and finally local governments as a last resort, but given the inflationary loss of a stagnant minimum wage that has occurred over the past number of years, fairness trumps all, and that the conservative point of view is the most logical reason to raise it. How much should it be? I’ll leave that discussion to the policy makers and those affected by it on both sides, however, whatever is done should be indexed to inflation or we will revisit the problem over and over again.
My final question on the issue is: Assuming I am correct and the conservative argument for raising the wage is actually a better one, why don’t more conservatives agree with it?
It’s worth asking them.
by Dick Goodson