Raise the federal minimum wage

It is time to raise the federal minimum wage. Congressman John Kline refuses to do so, voting against increases in 2007 and 2013. In a 2007 speech on the House floor, Kline said that “the cruel irony of any minimum wage increase will be a loss of jobs. Independent studies confirm that the proposal by House Democrats to raise the minimum wage without including considerations for those who pay minimum wage and their workers would halt the momentum of recent economic growth dead in its tracks. According to a Federal Reserve economist, as many as 1 million workers in the restaurant industry alone could lose their jobs under the current proposal.” http://www.seiu.org/2010/02/fact-check-on-rep-john-klines-opening-statement-at-todays-house-education-and-labor-committee-hearin.php. In 2012, when asked to support an increase, Kline said he “continued to oppose such a move.” http://www.mnfaireconomy.org/2012/07/constituents-ask-u-s-representative-john-kline-to-raise-the-minimum-wage-live-like-the-rest-of-us/  In 2013 he said: “We need jobs out there. The best approach right now is to get federal spending under control and government out of the way of the nation's job creators.” http://mankatofreepress.com/local/x1499303381/Congress-How-they-vot...

Study after study shows Kline is wrong.

First, some background on the minimum wage. Both the federal government and individual states can set a minimum wage. For employers that have 50 or more employees or that have $500k or more in interstate commerce, where the federal minimum is higher than a state’s, the federal minimum controls. Presently, the federal minimum wage is $7.25 per hour. This rate was the result of the Fair Minimum Wage Act of 2007 (which Mr. Kline voted against). That Act raised the minimum wage in three increments, in 2007, 2008 and 2009. Minnesota trailed behind the federal minimum until the 2013 Legislative session, when the Minnesota rate was raised to equal the federal minimum. As of January, 2013, the federal Department of Labor shows only three states (Wyoming, Arkansas and Georgia; Minnesota, of course, has since passed their increase) having minimum wage levels lower than the federal. http://www.dol.gov/whd/minwage/america.htm. Oregon had the highest minimum wage, at $8.95 per hour.

Next, what is a reasonable minimum wage? In its most recent report, published in 2010, the JOBS Now Coalition http://www.jobsnowcoalition.org/reports/2010/cost-of-living2010.pdf reported the following wage levels for various groups to meet their minimum needs, assuming a 40 hour work week:

Single adult, no children: required hourly wage: $11.82.

Single parent, two children: required hourly wage: $21.99

Two parent family, one parent working, two children: required hourly wage: $17.52

Two parent family, both parents working, two children: required hourly wage $28.06

No doubt, these figures have increased since 2010. At $7.25, it is quite clear that the current state and federal minimum wage is not a living wage.

So the question quickly becomes: does a rise in the minimum wage adversely affect employment? Start with Oregon, which has the highest minimum wage in the country. Melvin Sickler, a representative of the National Restaurant Association, told Congress in March, 2013, that Oregon’s restaurants employed a reduced number of workers since the passage of the Oregon minimum wage. http://www.politifact.com/oregon/statements/2013/apr/13/melvin-sickler/has-oregons-higher-minimum-wage-hurt-our-restauran/ In fact checking that statement, PolitiFact found that “restaurant jobs rise and fall with the health of the national economy, not the state’s minimum wage. Oregon’s per capita restaurant employment is higher than the national average, in spite of having a higher minimum wage.” Id. Professor Aridrajit Dube of Umass Amherst says: “The negative association between job growth and minimum wages is in the wrong place: it shows up in a sector like manufacturing that has few minimum wage workers, but is absent in low-wage sectors like food services and retail. In other words, it is likely a statistical artifact and not a causal relationship.” http://arindube.com/2013/. John Schmit from the Center for Economic Policy and Research says: “The weight of [the] evidence points to little or no employment response to modest increases in the minimum wage…. Given the relatively small cost to employers of modest increases in the minimum wage, [several]adjustment mechanisms appear to be more than sufficient to avoid employment losses, even for employers with a large share of low-wage workers.” The Massachusetts Budget and Policy Center found: “Our analysis of job growth in Massachusetts over almost two decades—during which the state minimum wage increased several times—provides evidence that these increases have not impeded job growth. Likewise, the latest economic studies that address this question and that are summarized below also show that minimum wage increases do not have a negative effect on employment.” http://www.massbudget.org/report_window.php?loc=minimum_wage_job_creation.html. Travis Waldron writing for ThinkProgress.org says: “An analysis by the Center for American Progress’ Nick Bunker, David Madland, and the University of North Carolina’s T. William Lester, however, found five recent studies showing that increasing the minimum wage — even during periods of high unemployment — does not have a negative effect on job growth.” http://thinkprogress.org/economy/2012/06/20/503112/studies-increasing-t/  A 2013 survey by the University of Chicago business school finds an overwhelming percentage of economists agrees with this proposition. http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_br0IEq5a9E77NMV

It is quite clear that modest increases in the minimum wage do not have an adverse effect on employment. Conservative fear-mongering over this issue remains misplaced, and is designed to serve only that small part of their constituency that falls prey to such fallacy. It is time to raise the minimum wage.