California Gov. Jerry Brown (D) and New York Gov. Andrew Cuomo (D) recently signed legislation that will raise the minimum wage in their respective states to $15 per hour. Wages will increase incrementally each year depending on varying circumstances in each state, but the new wage rate will reach its target no later than 2022. Many especially ardent advocates of raising the wage would like to see these laws expanded even further; Sen. Bernie Sanders (D-VT), for example, proposes implementing a $15 per hour minimum wage on a national scale. However, as well-meaning as supporters of these living wage laws often are, their proposals are misguided. The recent laws enacted in California and New York have the capacity to improve the lives of some workers to be sure, but we should not seek to immediately enact similar measures in Virginia or on a national level.
I don’t harbor all the traditional opinions about the minimum wage normally associated with conservatives. I oppose abolishing it altogether, and I think fears of rampant job loss if we raise it even a little bit are overblown. Indeed, among economists, the jury is still out on the effects increasing the minimum wage will have on job opportunity. Some economists maintain wage increases necessarily result in job losses, while other recent studies have shown moderate minimum wage increases do not cause noticeable drops in employment rates. With that said, undoubtedly there is some point at which mandatory wage increases will do more harm than good. A $70 per hour minimum wage, for example, quite clearly would be economically infeasible. A $15 per hour minimum, while obviously not as risky, still puts us in uncharted waters.
Alan Krueger, a former economic adviser for President Barack Obama, concluded a $15 per hour minimum wage was too high. His proposal calls for a $12 per hour wage eased in over a few years until 2020. While I can quibble over minute details, Krueger’s proposal (which is supported by both Obama and former Secretary of State Hillary Clinton) strikes me as a far more reasonable approach than the path chosen by Brown and Cuomo. But rather than follow the sound economic advice of even left-leaning economists such as Krueger, progressive lawmakers such as Brown, Cuomo and Sanders seem more intent to follow political incentives. Indeed, Brown even admitted as much: “Economically, minimum wages may not make much sense. But morally, socially and politically they make every sense.” Yes, who cares about rising unemployment rates if we can get more union votes and feel good while doing it?
I don’t necessarily blame the lawmakers and voters who support a $15 per hour minimum wage as much as I blame Republican Party members who have not articulated a plausible alternative. A happy median can exist between skyrocketing wages for teenage fast food workers and consistent rebukes toward any wage hike altogether. Economist James Pethokoukis at the American Enterprise Institute recommends expanding the Earned Income Tax Credit to boost the wages of working families, which, to their credit, Gov. Jeb Bush (R-FL), Sen. Marco Rubio (R-FL) and Sen. Ted Cruz (R-TX) featured on their campaign websites. It’s a good plan and should be explored. But with regard to public opinion, I fear it comes across as too wonky to have mass appeal; it doesn’t fit onto a laptop like those pithy living wage stickers I see adorning every other MacBook in Alderman Library.
A better idea would be to propose two common sense measures: Establish two separate minimum wages, and index the minimum wage to inflation. The first measure would help ensure high school students aren’t entirely frozen out of the summer job market. Moreover, assuming it’s paired with provisions protecting low-skilled adult workers from getting undercut by teenage labor, it would fall more in line with our intuitive notion of fairness. A high school student does not need $15 an hour to watch the slides at a water park in the same way that a working mom needs a greater hourly wage to help support her family. The second measure would help companies better plan their annual expenses, since inflation rates tend to increase consistently each year as opposed to, say, an $8 per hour minimum wage one year followed by a $12 wage, the next imposed by legislative fiat. Indexing the minimum wage would also help remove a hotly contested political debate from the yearly agenda, finally forcing politics to take a backseat to economics on this issue.
The same political pressures that led Govs. Brown and Cuomo to drastically raise their state minimum wages will affect our state and national governments as well. We need not cave to them. Before following California and New York’s lead, let’s wait and see whether the benefits of this policy truly exceed the costs. In the meantime, we can tell our lawmakers to adopt some simple reforms to prove that a middle road between the status quo and the wide-eyed optimism of Brown and Cuomo is the best way forward.
Matt Winesett is a Senior Associate Editor for The Cavalier Daily. He can be reached at m.winesett@cavalierdaily.com.
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