Waging War On The Poor

The NY Times editorial board takes on the $15 minimum wage on this Labor Day weekend, and does a pretty good job of dismantling the Republican objections to it.

States should decide: Mrs. Fiorina has said that setting a minimum wage should be “a state decision, not a federal decision,” because of differences in the cost of living around the country. Many Republicans who want to leave the federal minimum where it is, including Jeb Bush and Gov. Scott Walker, make basically the same argument.

Experience shows that state minimums are inadequate without a robust federal minimum. Today, 21 states do not impose minimums higher than $7.25, which was already too low when it was mandated by Congress in 2007. None of the other 29 states have minimums high enough to cover local expenses for an individual worker. In New York, including New York City, the minimum will top out at $9 at the end of this year, even though it takes an hourly wage of $12.75 for one person to cover living costs in the state.

If there were no federal minimum, states would be free to perpetuate poverty level wages. Under the law in Alabama, Louisiana, Mississippi, South Carolina and Tennessee, there is no state minimum wage; in Georgia and Wyoming, the state minimums are $5.15 an hour.

The market should decide: Jeb Bush has said that ideally each state’s minimum wage would be decided by the “private sector.” Mr. Walker and Senator Rand Paul have said much the same thing; Mr. Paul could have been speaking for the pack when he said the “minimum wage is only harmful when it’s above the market wage.”

Markets do reliably establish the prices of goods and services when businesses have to compete. When businesses compete for workers, for example, wages rise because employees gain a modicum of bargaining power. The law has long recognized, however, that low-wage workers seldom have bargaining power. An adequate federal minimum wage effectively substitutes for that lack.

Businesses will be hurt: Donald Trump has said a higher minimum wage would make it impossible for American companies to compete with low-paying foreign rivals. That stance is baffling given his stated aim to “make America great again,” because broad prosperity requires rising wages, not a race to the bottom with countries whose economies are built on low pay.

Robots will replace workers: Senator Marco Rubio has been trotting out this scare tactic at every opportunity: “I don’t want to deny someone $10.10. I’m worried about the people whose wages are going to go down to zero because you’ve made them more expensive than a machine.”

But keeping worker pay low to discourage capital investment is a recipe for a faltering economy and ignores history, in which new technology has bothreplaced and created jobs.

Here's the greater argument as to why every single Republican take on the minimum wage is complete hogwash: All of them at some point include the absolute falsehood that businesses will invest profits in worker wages. You have only to look at our current economy, with wages having stagnated for 40 years, productivity up dramatically, and and record corporate profits to see that unless federal law is there to set a floor, businesses will pay workers as little as possible whenever possible in order to "maximize shareholder value".

American businesses have been doing everything they can to reduce wages.