Partisan fashions don’t alter fundamental economic principles. When it comes to questions of whether to raise the federal minimum wage, it may not be popular to stick to facts that indicate a mandated pay increase would hurt the economy, but popularity doesn’t influence reality.
In recent weeks, some of the nation’s most conservative political leaders have expressed support for a higher minimum wage. Former GOP presidential nominee Mitt Romney is the most prominent of these, telling MSNBC, “I part company with many of the conservatives in my party on the issue of the minimum wage. I think we ought to raise it. Because frankly, our party is all about more jobs and better pay.”
Former Pennsylvania Sen. Rick Santorum and former Minnesota Gov. Tim Pawlenty both recently announced their own support for an increase as well. Notable conservative pundit Bill O’Reilly has said it would be wrong for Republicans not to support a $10 per hour minimum.
It’s easy to understand this reasoning. Opinion polls show Americans support raising the minimum wage. A recent Rasmussen Reports survey found 51 percent of Americans support an increase to $10.10 an hour, from the current $7.25, while 39 percent oppose it.
That represents a 10-point decline in support over a similar poll last summer. Backing a wage hike might be a way to capture voters who otherwise would not support Republicans. The lure of extra pay awakens something deep inside people who care about helping the poor — except that in reality it would hurt them, instead. Politics can’t alter that reality.
Despite the assertion that a hike would add jobs and increase pay, the economic reality is that a higher minimum wage doesn’t necessarily produce either of those things. Employers who see their labor costs arbitrarily increase as a result of government intervention end up hiring fewer people, which means fewer jobs.
The nonpartisan Congressional Budget Office estimates the president’s proposed wage increase would destroy at least 500,000 jobs, even as it lifts 900,000 people out of poverty. Under the best scenario, that’s a net gain of 400,000 lucky people, who would be offset by even more people newly unemployed. That hardly seems like an efficient way to help the economy.
As the nation continues to struggle with high long-term unemployment and massive numbers of people leaving the workforce altogether, the best course would be one that stimulates real growth, adding new jobs on top of the old.
Politicians generally gravitate toward promises that pose simple and appealing solutions. In this case, however, the simple solution comes with consequences that, for many people, will make life much worse. Americans deserve better.