Op-Ed: Left wages war on poor with minimum-wage push

The Road to Washington might be paved with good intentions, but good intentions don’t always translate into good policy.

Just ask the millions of Americans who liked their health insurance plans, were told they could keep them under the Affordable Care Act, but recently found out they’ll be losing them. Ronald Reagan once described the nine most terrifying words as “I'm from the government, and I'm here to help.” Those words are as true today as they have ever been.

Our government’s tendency toward crushing kindness is a big reason why Americans should resist the push to raise the minimum wage. We’re often told our collective compassion compels us to increase it, and on the surface, the idea sort of sounds good. No one gets rich with a minimum wage job, and we all want to help one another. But increases to the minimum wage do not help the poor as some might think.

First, most minimum wage earners don’t actually live in poverty. Two-thirds of minimum wage earners come from households making at or above 150 percent of the poverty line – in other words, they’re not technically considered poor. Just more than half of minimum wage earners are 25 years of age or younger, and more than 60 percent of those young people are still in school.

Second, the number of people paid the minimum is not especially high. Today, less than 5 percent of hourly workers are paid the minimum. Among all U.S. workers, minimum wage employees constitute just 3 percent of the American workforce. Not only are relatively few people being paid the minimum technically living in poverty; relatively few people are being paid the minimum at all.

Moreover, the general consensus among economists is that minimum wage hikes are ineffective at fighting poverty.

Christina Romer, who led President Barack Obama’s Council of Economic Advisors, openly conceded in the New York Times last year there were questions about “whether a higher minimum wage will achieve better outcomes for the economy and reduce poverty.” Romer even panned the idea that a hike in the minimum wage would be a sort of economic “stimulus.”

The problems don’t end there. Consider that even the most stalwart minimum wage advocates aren’t trying to raise the wage to $150 per hour, or $100 or $75.

Why? Because proponents know that as they force the cost of labor up incrementally, the cash on hand businesses have to pay for labor will remain about the same – forcing employers to raise prices for consumers and cut back on the number of people the company employs or the hours they work.

The awful truth embedded in this fight, which is rarely mentioned, is that there will be collateral damage among the low-skilled and the poor as a consequence of these wrong-headed policies.

How many jobs are boosters willing to destroy in their quest to increase the minimum wage? What level of government-imposed suffering is acceptable to them?

Human compassion compels us to promote policies that support job creation, not policies that undercut it. The problem of poverty in this country would be best addressed by making jobs more available – not making jobs more scarce.

I could compare today’s $7.25 per hour federal minimum wage to past levels. I could remind proponents the first federal minimum wage instituted in 1938 was the equivalent of $4.07 today, and the inflation-adjusted average since is actually below the current wage – but that’s not even close to the best argument against the plans.

A minimum wage hike is a bad idea because it hurts the very people we should be helping. Isn’t that reason enough to oppose it?

Patrick Ishmael is a policy analyst at the St. Louis-based Show-Me Institute, which promotes market solutions for Missouri public policy.