Waging Minimum Wage War

Only in the bizarre, glad-handing world of Congress could Republicans vote for minimum wage hikes and Democrats vote for tax breaks.

Now that the attempt to conflate the two has stalled out in the Senate, candidates plan to campaign for or against the wage increase during their break. They’ll have plenty of help from the media, who have already bolstered the wage-hike cause.

After all, public relations doesn’t get much better than the New York Times calling your argument “straightforward” and CNN calling your opponents’ reasoning “a lot of bull.” That’s exactly what minimum wage proponents have been getting in the media’s coverage of higher government-mandated wages.

The latest union victory was a city ordinance mandating an eventual $10-per-hour for employees of large retailers in Chicago. And it’s not just Wal-Mart — the Chicago Tribune noted it “affects a total of 19 retailers, including Target, Sears, Home Depot and Bloomingdale’s.” Low-income shoppers and job-seekers will be the losers if Target and Wal-Mart rethink locating there.

Voters in up to six states also face ballot initiatives on state minimums this fall. Unfortunately, when it comes to reporting on the issue, the notion of “balance” often results in faulty economic ideas getting serious consideration — or worse, outright endorsement from friendly media.

New York Times reporter Edmund L. Andrews claimed on July 13 that “the Democratic argument” for raising the federal minimum wage “is straightforward.” That argument consisted of two main parts: forcing the minimum wage to rise with inflation, and complaining about pay levels for Congress and private companies’ CEOs. The latter is shameless class warfare, and the former is just bad economics.

Heritage Foundation economist and labor expert Tim Kane has said the inflation argument is a dangerous red herring circa 1970. It’s “now viewed by textbook economics as a key part of the inflationary crisis in 1970s America,” he said. He added that “average blue-collar wages have risen, despite the fact that the minimum wage has declined in real terms.”

But what about the millions politicians and media outlets claim will be “lifted out of poverty” if the minimum were raised? According to data from the Bureau of Labor Statistics (BLS), 1.9 million workers made at or below the minimum in 2005. That’s a far cry from the 15 million people USA Today’s editorial board said on July 24 “earn the minimum or a little more.” If they’re earning more, they’re not minimum-wage earners — and the exaggerated number misleads voters.

In fact, the percentage of hourly paid workers at or below the minimum wage is at its lowest point since the BLS started collecting the data in 1979. In 1980, 15.1 percent of those workers earned minimum wage or below — compared to 2.5 percent in 2005.

That’s partly due to the fact that 23 states and the District of Columbia already mandate a higher minimum wage than the federal $5.15, according to data compiled by the National Conference of State Legislatures.

Despite those facts, The New York Times editorialized on July 13 that “the private-sector workers who need a pay raise the most have been waiting nine years and counting for some kind of increase to offset the rising cost of living.” That statement is also misleading – sounding as if the same workers have been making minimum wage for nine years straight. In fact, as several economists have pointed out, the majority of workers move on from entry-level minimum wage positions relatively quickly.

The BLS reported that “about half of workers earning $5.15 or less were under age 25,” and about one-fourth were ages 16 to 19.

Yet media outlets like the Times often prefer to dismiss economic facts with phrases like “some economists say,” as though it’s merely someone’s opinion that added regulations and costs will kill jobs. “Some economists say such measures will stifle development and deprive consumers of access to cheap goods,” Erik Eckholm wrote in his July 27 story about Chicago’s retail wage ordinance, before quickly moving on to “many poverty experts” who dispute that.

But if you’re CNN’s Andy Serwer, you don’t even have to bother with economists. You can just move straight to the dismissal. On the June 24 “In the Money,” host Jack Cafferty asked about the resistance to an increase in the federal wage. Serwer replied: “Well, it’s obviously coming from big business. They say it’s inflationary, and it will cause layoffs. I think that’s a lot of bull.”

As long as the media deliver such “analysis” for free, candidates can cut back on their public relations budgets.