Mildly encouraging minimum-wage debate
Looking on the bright side, which is usually irrational but occasionally justifiable, the debate about raising the federal minimum wage to $15 is mildly encouraging evidence that moderately sensible policymaking is again possible. The debate has been informed by data, not all of which has been ignored. The debate has been a reminder of federalism’s importance in a continental nation. Because the debate is about money, it has revived the capacity for legislative bargaining about splittable differences. Best of all, one side in the debate has refrained from overturning legislative due process, which it could have done and the other side has hitherto done.
Minimum-wage laws are a price we pay for democracy, which is worth it. Leave aside the folly of government setting prices, in this case the price of labor, which is an undertaking for which government has demonstrated scant aptitude. And never mind the dubious morality of forbidding people to work for less than the government deems proper. Disregard, too, the probability of unintended but predictable consequences from a $15 minimum wage:
The raise would incentivize some employers to replace wageearners with technology — for example, tablets for ordering in some fast-food restaurants. Most restaurants, however, will be unable to do this, so the raise would deepen the distress of the hardest-hit sector of the economy: During the pandemic’s first six months, more than 1 in 6 restaurants closed permanently, and restaurants and bars account for about 25% of COVID-related job losses.
The Manhattan Institute’s Charles Fain Lehman reports: “A surprising body of research links increases in the minimum wage to increases in criminal offending by those most likely to lose jobs as a result of the wage hike.” The Congressional Budget Office concludes that a phased increase to $15 in 2025 could raise the pay of 27 million workers (17% of the workforce) but would result in the elimination of about 1.3 million jobs. The CBO estimates that half of those losing jobs would be ages 16 to 19. Lehman says researchers estimate that job losses resulting from a $15 minimum wage “would lead to an additional 423,000 property crimes” and $2.5 billion in damages.
The Heritage Foundation’s Rachel Greszler reports that the median hourly wage of those performing child care is $11.65, and mandating $15 would increase the cost of such care by an average of 21%, or $3,728 per year for a family with two children, from $20,152 to $23,880. This could cause some parents to withdraw from the workforce.
The debate about the $15 minimum wage has been a reminder of federalism, which is often an afterthought for the sort of progressives eager for a $15 minimum wage. Federalism facilitates reasonable accommodation of this vast nation’s regional differences, the ignoring of which can lead to destructive anomalies.
Democrats had hoped to include the $15 minimum wage in their $1.9 trillion pandemic relief/stimulus/kitchen-sink package, and achieve Senate passage under arcane “reconciliation” rules. This would have prevented Republicans from filibustering it, enabling passage with 50 votes plus the vice president’s. When the Senate parliamentarian held that the $15 minimum was ineligible for passage under reconciliation, many progressives, whose devotion to norms is situational, urged Democratic senators to overrule or replace the parliamentarian. Those senators could have cited a precedent for doing so.
Twenty years ago, less than four months into George W. Bush’s presidency, Republicans, who controlled the Senate, removed a parliamentarian. He had a law degree, a political science PhD and the temerity to make some rulings that inconvenienced Republicans, under whose patronage he had served as parliamentarian from 1981 to 1987 and when they regained control in 1995.
If Democrats had decided to replace today’s parliamentarian with a more compliant one, this would have signaled a continuation of scorched-earth politics. The Democrats’ restraint is perhaps a virtue made more palatable to them because they do not have 50 votes for the $15 minimum. (Two of their senators oppose it.) Some good deeds are better than the motives for them.
Minimum-wage increases poll well: When A supports compelling B to give money to C, C is pleased, A is pleased with himself for being virtuous with other people’s money, and B is at least pleased that he can pass some of his increased costs on to his customers, who perhaps include A, who might not notice. Normality is often not sensible, but we missed it when it was absent.