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Despite empty rhetoric, a higher minimum wage will help us all

The Tribune today gives us an article in Florida’s amendment to raise the minimum wage. Of course, in an attempt to manufacture a downside to the proposal, they recycle the much disproved conservative “this will cost jobs and close businesses” scare tactic that is being trumpeted by the Florida Chamber of Commerce and other business groups. This time, though, greedy opponents of a more equitable minimum wage have thrown in a new twist: lower pay is good for the poor, because they will lose government benefits if paid adequately.

Wednesday, the conservative camp argued that increasing the minimum wage - and potentially lifting tens of thousands of Floridians out of government-backed health insurance programs - would be a bad thing.

At least 13,000 Floridians could be bumped from Medicaid or KidCare eligibility if the minimum wage increase passes, according to both groups.

Carol Dover, president and chief executive of the Florida Restaurant Association, cited ``serious, serious social consequences.''

``By pushing families out of the government-sponsored programs and making it harder for employers to provide health insurance, Amendment 5 is only going to make the problem worse,'' she said.

Economist Pollin called that an ``incredible argument.''

Funny how these conservative opponents of fair pay suddenly find some compassion for the poor and decide that government assistance programs are a good thing, eh?

Despite the empty rhetoric coming from the other side, all studies still point to a raise in the minimum wage as extremely helpful for low wage workers. A raise for the lowest level workers will also result in a “trickle up” effect: workers making 7 or 8 dollars an hour should see higher paychecks too.

Robert Pollin, an economist at the University of Massachusetts, said the proposal would affect 300,000 Florida employees directly. A ripple effect on those earning an hourly wage in the $6.15 to $7.50 range would bring raises to an additional 550,000.

Pollin appeared on behalf of Floridians For All, the group behind the minimum-wage push. He put the price at $440 million a year to Florida employers, a fraction of the $930 billion in total sales rung up in the state.

He said to expect ``very small, negligible price increases'' if the measure passes, about 14 cents on a $20 lunch, he suggested.

``Those price increases will wash out. Those businesses will not lose customers. Those businesses will not lose revenues. Those businesses will not lose profits.''

Continuing that theme:

We know this because Princeton University's David Card and Alan Krueger tested the argument in a 1995 study comparing the employment effects of a minimum wage increase in New Jersey with effects in neighbouring Pennsylvania where no raise occurred. Contrary to the doom and gloom predictions of minimum wage foes, Card and Krueger found that modestly higher minimum wages in New Jersey did not produce higher unemployment. In fact, New Jersey experienced better job growth than its lower wage neighbour. They suggest that higher minimum wages resulted in a more stable and better motivated workforce that reduced job turnover expenses, like recruiting and training, and improved productivity. As well, putting more money into the hands of working people who spend that money in their communities produced economic spin-offs.

The authors also found that an increase in the minimum wage does not necessarily have a negative employment impact on young people. In 1988, for instance, California's minimum wage jumped a whopping 27 percent, from $3.35 to $4.25. Yet from 1987 to 1989, California's teenage unemployment rate dropped more than the national average and fell relative to other comparable states that did not increase minimum wages.

That’s just the first linkable study I stumbled upon - there are tons of studies that have all independently determined that a raise in the minimum wage absolutely does NOT have a negative impact on jobs or the economy. The conservative scare arguments have been disproved over and over again.

Actually, the real problem with Amendment 5 is that it doesn’t go far enough. A one dollar raise, while significant for those who survive of $5.something per hour right now, still leaves workers with less than a living wage.

Still, Amendment 5 is all we’ve got this year. Vote “yes”.

More info: Floridians For All