"Debunking" the Minimum Wage

| Tue Jul. 19, 2005 2:04 PM EDT

Every now and again the distortions about raising the minimum wage pop up again. A few months ago, Power Line—everyone's favorite "Blog of the Year"—was trying to take on David Card and Alan Krueger, two respected economists, by citing data peddled by a fast-food industry-funded think tank a few years back. Uh-huh. Alas, a Blog walks everyone through this debate once more today. The sad part is, this comes up every few months, and right-wingers will probably bring it up from now until time immemorial. There are good arguments against raising the minimum wage, but few of them are clear-cut, and most evidence shows that the policy simply doesn't have a horrendous effect on employment. The Economic Policy Institute—which is hardly an unbiased source, granted—looked at state-by-state evidence, and found that raising the minimum wage has hardly been a disaster anywhere you looked.

By the by, every time the debate over the minimum wage comes up, some conservative will ask, as Powerline does, "Well if you think the hourly minimum needs to be raised to $7, why not $14, or $140?" As if this is some sort of refutation. Conversely, we could ask, if you think a $400 billion deficit is okay, why not $800 billion, or $4 trillion? If you think 15 years is an acceptable prison sentence for manslaughter, why not 50, or the death penalty? If you think 60 Senators are enough to filibuster a law, why not 70, or 100? We could play this game all day and it won't get any less dumb. For instance, an interesting 1999 survey by the Levy Institute found that over three-fourths of employers wouldn't change their employment decisions if the federal minimum was raised to $6, but found small effects if it was raised to $7.25. So there are trade-offs here, as always. That's why most liberals nowadays think a combination of a modest minimum wage hike and a boost in the Earned-Income Tax Credit is the way to go.

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