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Friday, October 21, 2016

WASHINGTON — There is a magnificent public policy that achieves many of the goals conservative politicians regularly extol. These include promoting work over dependency, reducing the cost of social welfare programs, fostering economic growth and strengthening families.

The policy in question is raising the minimum wage. The only mystery is why so few conservative politicians see the issue this way. Rank-and-file conservatives know better. A December Washington Post/ABC News poll found that 53 percent of self-described conservatives supported a minimum-wage increase. Republican politicians who are so solicitous of conservative opinion need to follow the moral and practical intuitions of those they say they represent.

One conservative, at least, is speaking for this majority. Ron Unz, a Silicon Valley millionaire and one-time Republican candidate for governor of California, is championing an initiative to raise his state’s minimum wage to $12 an hour. His reasons are thoroughly in keeping with his ideology.

Unz argues that a minimum-wage hike “would function as a massive stimulus package.” He told ABC News that if the national minimum were increased to $12, “probably between $150 billion and $175 billion a year would go into the pockets of the lower-wage families that spend every dollar they earn. It would cause a tremendous boost in economic demand.”

He also pointed to the fact that government — through wage subsidies in the tax code, Medicaid and food stamps — is now conferring substantial benefits on employers of low-wage labor.

“One of the strange things in our society right now is that we have all these low-wage workers who are getting $7.50, $8 or $9 an hour,” Unz says, “and because they earn such small wages, the government subsidizes them with billions or tens of billions of dollars of social welfare spending that comes from the taxpayer. It’s a classic example of businesses privatizing the benefits of their workers while socializing the costs.”

Now the truth is that inequality has grown so much that various programs to improve the living standards of the working poor are absolutely essential. Some should be expanded. Both Senator Marco Rubio (R-FL) and President Obama have suggested that the Earned Income Tax Credit be broadened to support workers without children (although Rubio proposed ill-advised EITC cuts elsewhere). A nation that proclaims its reverence for work should agree that nobody who works full time should fall below the poverty level.

But there’s a limit to how much taxpayers should be asked to subsidize employers. Lifting the minimum wage would help correct the balance.

  • dtgraham

    For those who insist that increases in the minimum wage are always associated with higher levels of unemployment and inflation, I would point out the following:

    i) In Canada, the Province of Ontario has raised it’s minimum wage 5 times between 2007 and 2014 from $7.25 per hour to $11.00 per hour.

    ii) The Province of Alberta raised it’s minimum from $8.00 per hour in 2007 to $9.95 in 2013.

    iii) The Province of Saskatchewan raised it’s minimum from $7.55 in 2007 to $10.00 in 2013.

    iv) British Columbia increased it’s minimum from $9.00 in 2011 to $10.25 in 2012.

    v) Manitoba has steadily gone to $10.45 per hour minimum with another increase soon to come.

    vi) Quebec has raised it’s minimum 9 consecutive years from $7.45 per hour to $10.15 per hour between 2005 and 2013.

    In every single case, these Canadian Provinces saw their unemployment rates either stay the same or decrease during those years of increasing their minimums, with the exception of the year 2009. That was the year after the great Wall Street meltdown, which had some affect on Canada due to the extent of the trading relationship between the two countries. British Columbia saw their unemployment rate decrease by a full percentage point after they legislated a $1.25 per hour increase in the minimum in one year.

    The average yearly inflation rate in Canada between 2004 and 2013 was 1.8%.

    I’m bringing all of this up for one reason only. Economic principles apply to the Canadian economy the same way they would to any capitalist economy…there’s no difference. If your contention is that increases in the minimum wage will always lead to higher levels of unemployment and inflation, then you have to explain the above to me.

    • jmprint

      They don’t do explaining they just parrot the lines they are taught without reasoning, It’s the Tea-Party way.

    • joe schmo

      This is why it won’t work…….

      Report conducted by the Southern Economic Journal
      by Cornell and American Universities

      1) Job loss actually occurred due to minimum wage increase.

      2 )No job experience if they have no job leads to more poverty.

      3) Businesses need to be willing to grow and invest. During a down turn in the economy they are less likely to do so.

      When actual payroll data was analyzed by economists Neumark and Wascher, the results flipped: far from boosting employment, the mandated wage increase in New Jersey had decreased employment — just as standard economic theory would predict. That the New Jersey study was an outlier has become even more apparent in the years since: 85 percentof the most credible studies on the subject in the past two decades
      have pointed to job loss following an increase in the minimum wage.

      So, where does that leave NELP National Employment Law Project and other like-minded advocates?

      In recent months, they’ve tried to get traction on the “consumer spending” argument, whichgoes something like this: Raising the minimum wage will put more money in the pockets of low-income workers, who will then spend that money, drive the recovery, and create jobs.

      At least the Krueger and Card findings were backed up by a data set, albeit a flawed one. By contrast, this job creation claim is based on no more than a distorted interpretation of a research paper written by three economists at the Federal Reserve Bank of Chicago. It also ignores a recently released Employment Policies Institute study that shows past increases in the minimum wage have provided no boost to Gross Domestic Product — and
      even reduced output in certain industries that employ a high percentage of low-wage employees.

      This lack of regard for the evidence demonstrates how the “higher costs means more jobs” mantra has become an article of faith for proponents of a higher minimum wage. To bring down the unemployment rate, businesses need to be willing to
      grow and invest — neither of which is likely if we’re hampering them with new employment costs. That doesn’t mean turning a cold shoulder to the 46.2 million Americans living in poverty. It just means pursuing smarter policies (like an expansion of the Earned Income Tax Credit) that are proven to boost incomes and employment without the unintended consequences associated with a minimum wage increase.

      After all, working people aren’t stuck at the minimum wage — most earn a raise in their first one to 12 months on the job. But they can’t get the raise without experience, and they can’t get experience, if they don’t have a job.

      • dtgraham

        You’re way off here joe. Standard economic theory doesn’t predict anything of the kind. In fact there is a growing body of very strong empirical evidence that suggests that increasing the minimum wage within a certain range has no effect on employment numbers. Yes, an increase in aggregate demand is one of the explanations for the observations noted and I’d refer you back to my post on the Canadian experience. I said that you had to somehow account for that and offer some kind of reasonable counter rationale as to how that could possibly happen, given your position on this, if you wanted to remain credible. You didn’t even try.

        The EPI are serial liars and you don’t want to rely on anything they say. That CNN would report their secretive, deeply flawed study as legitimate theory is a sad commentary on the state of journalism these days. They are one of several front groups for the restaurant, hotel, alcoholic beverage and tobacco industries created by a lobbying firm called Berman and Company.

        They’ve advertised against Acorn, against any reform of the health care system at all, and against ever raising the minimum wage. EPI’s mission is to keep the minimum wage where it is (or eliminate it) so Berman’s clients can continue to pay their workers as little as possible.

        In 1992 the LA Times noted that EPI was using “misleading reports” and sponsoring “cooked studies” whenever attempts were made to establish healthcare or better wages for workers. That was Harry Bernstein in the business section I think.

        It’s standard tactic is to trot out a study using contrived statistics designed to show that hundreds of thousands of jobs will be lost if the minimum is raised. In reality, studies by labour economists show that the job loss effect of increasing the minimum is either small or non-existent. Furthermore, it was found that the benefits to low wage workers and their families far outweigh whatever negligible affect may occur.

        Even the the industry trade publication, Food Institute Report, admitted in 1995 that “the weight of the empirical evidence suggests that the effects (on the # of available jobs) of a moderate raise in the minimum from it’s current level are likely to be negligible.”

        I’ve heard about EPI’s reaction to Princeton professors Card and Krueger’s published analysis of New Jersey fast food restaurants, which found no loss in the number of jobs after the State’s minimum wage hike. Berman’s group accused them of using bad data, citing contrary figures that they had collected.

        However, Card and Krueger surveyed 410 restaurants, shared their data and methodology with the public, and published their findings in peer reviewed reports. Berman only collected data from 71 restaurants and has refused to make it’s data publicly available so that other (real) researchers can access it. It’s strongly felt that Berman cherry picked restaurants to create a sample that would support it’s pre-determined conclusions. Their results deviate too greatly from all other studies and real world examples [again…see Canada].

        • joe schmo

          We are not Canada. Don’t want to be Canada, Grew up with how Europe is because of ties to family in Europe. Don’t want to be Europe. This is the USA. It is not socialized Canada or Europe. The way the system worked before made us a strong nation. You seem to want to change it. If you like the systems in Canada and Europe so much, why not move to Canada or Europe. You are misguided if you think it works soooo well. I don’t need to find articles about this because, I have experienced it. If you keep increasing the minimum wage and ‘spreading the wealth’ (which by the way is Communist Ideology) You will make everyone equal in pay. If that happens their will be some very unhappy educated individuals, So a food worker will make the same amount of money as a Dr. This will also incite laziness due to the fact that ‘the people’ are now united as with the Unions. As a result of all this, there will be a lot of dissent by those who work hard and those who don’t. Innovation and ideation will cease because their is no desire to achieve greatness or a need to compete. Why do I believe this….because my family lived in Communist Europe and that is how it was. Instead of moving forward everything went backward. In fact, while visiting as a child I was amazed at how progress moved at a snails pace. It was like going back in time…. better yet, food was scarce and standing in line for sustenance was common.

          You believe in one happy Coexisting utopia. Not going to work unless we are forced against our will. Then will we be over joyed? Not!

          ‘Serial liars.’ Well, I can honestly say that with all the back and forth decision making made by your Man in Chief, I wouldn’t trust your side if my face was broken.

          • daniel bostdorf

            see the above facts that disputes your theory.

        • daniel bostdorf

          agreed…..see my comment above as well..

      • daniel bostdorf

        factually incorrect….but….we appreciate your view.

        • joe schmo

          Factually correct. I have read and researched and found that what I presented to be right on the mark.

          The increase would be large, that it would push the minimum to a high level, that it would take place amid high unemployment — clinch the case that it would have seriously bad effects on the labor market. They do, however, suggest reasons for worry.

          So the benefits of raising the minimum wage are not as large as you might expect. On to the costs. For a long time, economists generally agreed that raising the minimum wage reduced employment. The logic is straightforward enough: Raise the price of something, and people will buy less of it — even when that “something” is labor, and the people in question are employers.

          The Canadian model works great when you have a stronger economy. Not our case at the moment. Employers who have to increase their minimum wage will hire less people or have to let some employees go.

          You do realize that companies are always looking to cut costs?

          • daniel bostdorf

            Factually incorrect again.

            The reality is that we need to lift people up and out of poverty where the big tax dollars are spent of social welfare programs. Raising minimum wage does this.

            You want to save tax dollars do you not?

            From Washington Post and the research study:

            Economists agree: Raising the minimum wage reduces poverty

            Quoting artice:
            “Let’s first highlight the major results. Dube uses the latest in minimum-wage statistics and finds a negative relationship between the minimum wage and poverty. Specifically, raising the minimum wage 10 percent (say from $7.25 to near $8) would reduce the number of people living in poverty 2.4 percent. (For those who thrive on jargon, the minimum wage has an “elasticity” of -0.24 when it comes to poverty reduction.)

            Using this as an estimate, raising the minimum wage to $10.10 an hour, as many Democrats are proposing in 2014, would reduce the number of people living in poverty by 4.6 million. It would also boost the incomes of those at the 10th percentile by $1,700. That’s a significant increase in the quality of life for our worst off that doesn’t require the government to tax and spend a single additional dollar. And, given that this policy is self-enforcing with virtually no administrative costs while challenging the employer’s market power, it is a powerful complement to the rest of the policies the government uses to boost the living standards of the worst off, including the Earned Income Tax Credit, food stamps, Medicaid, etc.

            A higher minimum wage will lead to a significant boost in incomes for the worst off in the bottom 30th percent of income, while having no impact on the median household.

            As many economists have argued, the minimum wage ”substantially ‘held up’ the lower tail of the U.S. earnings distribution” through the late 1970s, but this effect stopped as the real value of the minimum wage fell in subsequent decades. This gives us an empirical handle on how the minimum wage would help deal with both insufficient low-end wages and inequality, and the results are striking.

            Charles Darwin once wrote, “If the misery of the poor be caused not by the laws of nature, but by our institutions, great is our sin.” One of the key institutions of the modern economy, the minimum wage, could dramatically reduce the misery of the poor.

            Read facts here…not fiction or theories…



            From Wall Street Journal YESTERDAY–This is up to date analysis by the foremost authority this matter:

            Raising Minimum Wage Reduces Jobs, Poverty, Study Says Losses in Employment Partly Offset by Increased Purchasing Power

            quote from article:

            “Richard Trumka, president of union federation AFL-CIO, which is holding its winter meeting of labor leaders in Houston this week to strategize for the year, immediately challenged the study’s findings and said it echoed false claims by conservatives. “Every time momentum builds for lifting wages, conservative ideologues say it will cost jobs. Every time, they’ve been dead wrong,” Mr. Trumka said in an emailed statement issued during his closed-door meeting with labor leaders.”

            NOTE from me: and the key is lifting Americans out of poverty–not job losses. Getting out of poverty cuts government social welfare assistance(your tax dollars) to those with increased $$ in pocket—-it stmulates the economy:

            “The CBO said that a gradual increase to $10.10 an hour by July 2016
            would eliminate 500,000 jobs, but lift 900,000 Americans out of poverty
            from the total of 45 million projected to be living in poverty in 2016.

            “The report predicted other positive effects for the economy. Low-wage
            workers tend to spend a larger fraction of their earnings, so some firms
            would see increased demand for their goods and services as a result.”

          • joe schmo

            You forgot one thing….this says absolutely nothing about how it effects the employer which, in turn, effects the employee…..and, of course, again we have union infringement shoved down our throats. Even when the economy takes a downturn, unions require high wages, bonuses and pay raises. Bottom line, companies want to show a profit not a loss. My sibling is management for Kroger. Of late, they have had to close stores and they have tried to absorb as many employees as they could. Of course that is not always possible. High union wages, during a downturn in the economy leads to business closures and employees loosing their jobs.

            In this day and age isn’t it best to let a company decide on whether they want to unionize or not. In the case of VW the employees spoke because they did not want to loose their jobs or see another Corporation move out of the Country. This is America at work through their employees:)

            Let me give you a clue, go ahead and keep forcing your agenda on us…you will one day wake up, look around, and see for yourself what we have realized for some time now. At the moment, you have the ball in your court.. We already see the chains. Just wait until you wake up and see the restrictions put upon you. What then? It will be too late.

            I might add something I got from a friend online and it is so true of all of you:

            ‘Liberals have one
            common denominator, they have no absolute convictions and hate anyone
            that does. There is not a single controversial issue that liberals will
            stand on, no matter what kind of ridicule they take. They will always
            want to make exceptions or change their stance instead of admitting they
            are wrong. They make assumptions/decisions based on their emotions and
            then want to put “band-aids” on their failed policies to try and “plug
            the leaks”. The whole idea of PC has changed American pride to a
            constant “looking over our shoulder”.’

            Your opinion comes from an emotional stance. Common sense and looking at the situation from all angles does not even come into play. My justification revolves around not only the benefits to employee’s, but also the employer who is the main player in all of this.

  • Makes sense of course, but Republicans don’t like to agree with ideas unless it’s “their idea” and veto nearly everything the President proposes, because heaven forbid, they don’t want to make a black President look good! The hypocrisy in the Republican party is quite disturbing, not to mention the nutjobs like Bachman.

    • plc97477

      They don’t even like their own ideas when the dark complected president embraces them. The ACA was completely republican.

  • halslater

    How can anyone call themselves a “business-person” when their business model depends upon exploiting underpaid labor? What a bunch of “posers”!

  • jointerjohn

    True conservatives do love the idea, but there are very few of those in today’s republican party. True conservatives believe government has no business in people’s love lives or reproductive choices, but that doesn’t stop today’s republicans from legislating to restrict personal freedoms. What we have today are phoney-conservative corporate shills, plain and simple.

    • trista niap

      my Aunty Grace got a nearly new blue Kia by
      working part time from the internet. look at this now F­i­s­c­a­l­P­o­s­t­.­ℂ­o­m

  • elw

    The Conservatives of today do not like the idea of raising the minimum wage because they lack the intellectual ability to think beyond what they are told to believe, they are short-sighted, backward thinking, and stuck in the hole they have dug for themselves. They are not qualified to lead the biggest economy in the world and never will.

  • neeceoooo

    I really don’t understand the mentality of the republicans who can’t see this as a win win situation. Putting more money into the pockets of the American people will go back into the economy through spending. It will decrease the government subsidies that are helping the low income families with necessities of life. It will decrease the deficit because the higher the salary the higher the tax rate. Bottom line, they don’t want the President to look good so the American people suffer.

    • dpaano

      As I said above…’s just TOO logical for them to deal with!!

  • ” . . . subsidizes them with billions or tens of billions of dollars of social welfare spending that comes from the taxpayer.”

    Contrary to popular myth, the federal government is not like state and local governments, and not like you and me. We need a source of income when we spend. The federal government does not.

    If all federal taxes fell to $0 or rose to $999 trillion, neither event would affect the federal government’s ability to spend, not even by one penny. FEDERAL TAXES DO NOT FUND FEDERAL SPENDING.

    The federal government (unlike state and local governments) has the unlimited ability to pay its bills. Despite what the politicians and the media tell you, the federal government never can run short of dollars. It never can be bankrupt (or “broke” and Rep. Boehner famously lied).

    We taxpayers do not pay for federal spending. Our taxes have nothing to do with federal spending. So to say that social welfare spending comes from the taxpayer simply is not true.

    It’s a myth, which this blog shamefully parrots. Why? Because the myth benefits the rich. It widens the gap between the rich and the rest. It is designed to make you believe Social Security needs to cut benefits or increase FICA — both of which widen the gap.

  • howa4x

    Republicans are slaves to their ideology and slaves to the billionaire Koch bros who are against any idea that would help the middle class grow. They all want a nation of serfs who are obedient to the ruling oligarchs. They want to recreate Russia under the rule of the Tsars where there were only rich and poor and the middle class ceased to exist. This why they could do what they pleased to the people and the environment with no opposition. Republicans only claim to want freedom and upward mobility but they only talk the talk but never walk the walk. What they want is a theocracy of Christian capitalistic values where the rich are placed above everyone and beyond question, and the poor just accept their fate, to be used as pawns of the 1%.

  • dpaano

    First of all, the concept is too logical for a Republican to understand; and second of all, because President Obama is supporting it….they won’t. Maybe he should try reverse psychology……it’s an idea!!!

  • ThomasBonsell

    Dionne’s last paragraph sums up very concisely why poverty rates skyrocket when a conservative Republican is in the White House and the GOP controls the Congress. Happened under Reagan-Buish and again under Baby Bush.

    • daniel bostdorf


  • Bill

    The GOP doesn’t care about workers only employers, if they had their way there would be no minimum wage period.

  • highpckts

    Well if it makes sense you can bet it will never fly with the Tbaggers!!

  • Jimmy Agler

    It should appeal to the rank and file. The issue here is that their loudest voices do not care about the rank and file. If you think Rush,Hannity and Beck are about the little guy instead of a corporate master you are delusional.

  • daniel bostdorf

    As usual, Dionne is dead on with the observation…as long as you believe in a “minimum wage.”

    “In an important article in the economic journal Challenge, “A Conservative Case for the Minimum Wage,” Oren Levin-Waldman, professor of public policy at Metropolitan College of New York, offers a similar view and makes the compelling moral points. Higher pay “increases the autonomy of low-wage workers,” he says, thus advancing “personal freedom” and “a core concept in conservative thought, which is personal responsibility.” This, in turn, means less dependence “on the largesse of others.”…….And, as Annie Lowrey argued earlier this month in The New York Times, those who rightly worry about the breakdown of marriage need to remember that “creating good jobs with growing wages at the bottom of the income scale might be the best, if hardest, way to encourage young couples to wed.”…..Conservative politicians really need to ask themselves: If they refuse to raise the minimum wage and at the same time insist on cutting health care and wage-support programs, are they not consigning millions more of their fellow citizens to lives of poverty? Most Americans reject this view, and that includes most conservatives who believe in work, family and personal responsibility.

  • charles king

    (Critical Thinking) ! Everybody is doing it, Yes most are asking What? the hell is going on with those Conservatives and Why? the hell cant they get their S*** together and WHO? the hell are they Where? are they on their way too. In the meantime, Thank-U President Obama and your Admin. for job well done, hang in there a little bit longer and before you leave tell those Capitalist pigs, A bunch of White men and other Plutocracts, the Republicans Party Who? doubted your ability just tell them to check-out- Critical Thinking because it works just like your Obamacare. Thank U Pres. Thank You are the magic words in my book. I Love Ya All. Mr. C. E. KING