California Considers Minimum Wage Hike

| Tue Apr. 11, 2006 1:34 PM EDT

In the Los Angeles Times today, Tom McClintock, a Republican state Senator, says that California shouldn't raise the minimum wage. It will destroy jobs! People will be unemployed! Misery and poverty to follow! Anyone who thinks otherwise has fallen victim to the "smarmy rhetoric of leftist populism," you see:

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The truth is that if your labor is worth $6.75 an hour and the minimum wage is raised to $7.75, you simply become unemployable. The first rung of the ladder is gone, and there's no place to start.

That sounds very clever, but here's some more "smarmy rhetoric" to consider. Very rarely, if ever, have modest minimum wage hikes had any sort of effect on employment in the real world. The Economic Policy Institute has written up the state level data for all to see. Employment in Florida actually rose after a dollar hike in the minimum wage last year. Call it magic. Congress boosted the federal minimum in 1990-91 and 1995-96 and no one can recall hordes of "unemployable" people wandering the street with their life possessions in shopping carts (the 1995 hike, in fact, preceded one of the tightest labor markets in recent memory). Britain and Australia have had similar experiences. Maybe if we squint really hard the real truth will become apparent, but that's the basic story.

No matter. McClintock's leaps on yet another canard—that the minimum wage only helps middle-class teenagers working cushy jobs at the mall:

One newspaper gushed that the proposed state increase will boost the pay of California's "working poor" by $2 billion. But the vast majority of minimum-wage earners are part of middle-class families. Most are teenagers chasing their first job or spouses of breadwinners trying to find a niche for themselves in the job market.

I'm not sure what the precise statistics are for California, but this sounds dubious. Heather Boushey of CEPR has estimated that, nation-wide, the average minimum-wage worker earns 68 percent of his or her family's income—precisely the sort of person who badly needs help. And that gushing newspaper likely has things right: After the 1995-96 federal increase, 35 percent of the gains went to the poorest 20 percent of the population. Very few policies are half as progressive, and if a few middle-class teenagers get richer as a result, well, what of it? (And given how fast California's tuition fees are rising, most of those teenagers probably need those extra dollars to pay for college.)

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