I’ve read any number of arguments against raising the minimum wage. Some are good and some are not — but this one takes the cake (via memeorandum):
(WASHINGTON, D.C.) – U.S. Senator Tom Coburn, M.D. (R-OK) released the following statement today regarding his vote against, H.R. 2, the Minimum Wage Act:
“This bill is unfair to workers and, in many cases, it will be harmful to the very people it is supposedly designed to help. Most workers will experience a minimum-wage penalty rather than a minimum-wage benefit because of this bill. This bill has far more to do with increasing the political capital of politicians in Washington than increasing real wages of low-income families,” Dr. Coburn said.
From there, I expected to read about the possibility of net job-loss, as businesses compress their numbers of minimum-wage workers to meet the bottom line. But no — it seems that “real wages” means something entirely different here:
In Oklahoma, low-wage workers are eligible for up to $25,726 in assistance in areas such as child care, housing assistance and food stamps. Under the minimum wage increase approved by Congress, these low-wage workers would find themselves eligible for benefits worth $4,600 less than they would under the current minimum wage. Yet, their newly increased wage would only provide an increase of $4,368 per year, resulting in a net income loss of $232 per year.
Senator Coburn evidently thinks that government support (a.k.a. entitlement programs) equates to “real wages”.
Wow. Is he really arguing that it would be better for these folks to continue on public assistance? I must be missing something. Maybe it’s in the next paragraph:
“Minimum wage was never intended to be the sole income of a family and numerous studies show that few minimum wage earners are the sole income earners in their household,” Dr. Coburn said, noting that since 1998, the number of workers earning minimum wage has precipitously declined from more than 4 million to less than 1.9 million and that 85 percent of low-wage workers are teens living at home with their parents, adults living alone or dual-earner married couples.
Oops. No help there, since according to this, that the vast majority of those earning minimum wage wouldn’t actually be eligible for most of those very entitlements.
Polimom assumes (a dangerous thing to do, I know) this Senator realizes that teens living at home don’t need housing assistance, anymore than adults living alone need child care… which means that based on his own examples, increasing the minimum wage would put real $ into the market.
Do you suppose that’s the same market to which he refers in his conclusion?
“Free markets, and the American ideals of entrepreneurship and hard work, are far better equipped at setting and raising wages than politicians in Washington. Yet, when government decides to step in, it should be at the state and local level. States across America are already addressing this issue. American families deserve an economy in which they can prosper, not more counterfeit compassion from Washington,” Dr. Coburn said.
What a bizarre bit of idiocy. His entire statement, while supposedly defining why he voted against the minimum wage increase, demonstrates that he doesn’t understand it.
It looks as if Sen Coburn was attempting to compare apples to oranges, but then combined them with some red herrings, ran the whole lot through a metaphor mixer and ended up with a fruit salad commentary that smells somewhat fishy.
There are real reasons to oppose the minimum wage increase (some of which you alluded to.) The good Senator may have hit on some of them, but he somehow managed to jerk defeat out of the very jaws of victory by means of his statement. Maybe he needs to read Polimom Says, and learn how to make focused comments.
~EdT.
BTW, this “gross gain results in net loss” is not uncommon in our so-called ‘progressive’ programs, and was one of the rationales my father used when discussing why my mother could do any job she wanted – so long as she didn’t bring home a paycheck (the additional taxes would have been greater than the amount in the paycheck.)
However, this is NOT a good reason to oppose an increase in the minimum wage – it IS a good reason to support efforts to bring better-paying jobs and opportunities into an area.
~EdT.
If you were in any way familiar with the good Senator’s voting record, you would certainly understand that he in no way believes anyone is better off on personal assistance and has made it his quest to shrink government and its scope and is indeed one of the few in the U.S. Senate with the proven spine to do so. I believe his point is that raising the min wage is not a role of the federal goverment to begin with but when the fed govt does insert itself into an area such as the minimum wage, it shows that in certain states, such as Coburn’s home state, it serves as far LESS a benefit than intended by those sponsoring the legislation. His bottom line in this statement is to point out the desingenuineness and political expediency of the culture of Washington.
Increasing min wage means everyone, including those on min wage, has to pay more for goods and services because business costs have risen and businesses need to offset those costs. This bill had small biz tax breaks in it and he still voted against it because it is a disingenuinous promise to workers predicated on a false hope.
I understand the concept of some of the arguments against a minimum wage increase, or even a minimum wage at all. But the minimum wage is not new. So if all of these horrible things were going to become reality in the worst form as a result of this latest increase, why did this not happen all the other times the minimum was increased? Or does it happen and nobody cares so they change it anyway.
This bill had small biz tax breaks in it and he still voted against it because it is a disingenuinous promise to workers predicated on a false hope.
It’s equally disingenious to conflate and confuse the apples of various social programs with the oranges of who receives them — or to skate right past the clear benefits to the market from the spending power gained people whose “real wages” will, in fact, increase.
If your comment accurately reflects his true motivations, then I suspect that the Senator’s statement could have been much more clearly written.
I will agree that the statement does not adequately make the case that a federally mandated minimum wage is outside the constitutional bounds of the federal government which, knowing Coburn’s record, he would most certainly agree. This is an issue for the states to decide and the very fact that upwards of 20 states already have a higher minimum wage than the current federalty mandated $5.15 shows this. Different states have different economic factors and conditions. If you watched or heard his statements on the floor in debating this bill, I think it would better clarify.
Polimom,
Tom Coburn has been one of the leaders in the anti-earmark campaign in the US Senate. To that extent, he has been on the side of the long suffering taxpayers.
Also, as you and EdT both note, there are valid reasons for either 1) opposing the concept of a one-size-fits-all Federal minimum wage or 2) being OK with the concept and arguing that the hike being proposed will have adverse consequences. (Consequences which may strike either mimimum wage earners or those who earn — or pay — wages within ~$2-$5/hour of the new minimum wage. )
Having said that, allowing such a confused, tortured explanation of a vote to go out under his name can only reflect badly on the Senator. It appears that either the Senator doesn’t understand economics, thinks that government support payments and earned wages are no different in their impact on the attitude or motivation of the recipient, or has a really weak staff.
Personally, I think he needs to upgrade his staff.
One reason to oppose the minimum wage increase is on principle. Fundamentally supply and demand determine wages and prices. By definition a minimum wage is interference in the market by the federal government, an entity not noted for its efficiency or good judgment. What basis is there for demanding they be paid at a rate higher than their employers willingly provide? There’s only one: charity. And while charity is good, the government is not good at it.
Another is personal responsibility. Every single American knows that a life lived at the minimum wage level is one on the very edge of poverty and/or disaster. Opportunities abound to be educated, formally or otherwise in this country. Yet too many people ignore their chances because they don’t care and aren’t willing to make short-term sacrifices for mid-term gains. Why should they try if there is no consequence for failure?
A third reason, and my personal favorite, for opposing the minumum wage is that it amounts to little more than an indirect tax. Businesses are not going to lower their profit margins to provide the higher wage. Neither will they increase their margins – competition will not allow this. Those businesses that can will charge you and I increased prices. Those that can’t will cut staff, resulting in increased public assistance.
As inarticulate as Coburn’s message was (in contrast to Mr. Obama), he is correct, I think, to say, “Free markets, and the American ideals of entrepreneurship and hard work, are far better equipped at setting and raising wages than politicians in Washington…American families deserve an economy in which they can prosper, not more counterfeit compassion from Washington”.
Few things make for a robust economy like the government simply staying out of the way.
I believe that the basis of the minimum wage is to try to keep more people from applying for federal assistance programs who have full time jobs. The key to the minimum wage is that it is decided based on those working about 40 hours per week. Not students working after school.
I’d be curious to know, that despite only a few million currently working at the minimum today, how many are working at only a dollar higher than the minimum. Employers of low wage jobs often scale their pay based upon the minimum wage. So you could easily have many more who work at $5.65, which is either a magic number they found or just happens to be 50 cents higher than the minimum.