DOUBLE STANDARD

02.20.14

Democrats Can’t Accept the Trade Off of a Job-Killing Minimum Wage

Each side cherry picks facts, but the latest offender is the White House that won’t accept an estimate that its $10.10 proposal would cost jobs.

When it comes to President Obama’s proposed increase in the minimum wage, the White House would like to have its cake, eat it too, and claim that the cake has zero calories.

Tuesday, the Congressional Budget Office released its analysis of The White House’s proposed $10.10 federal minimum wage, giving credence to Republican claims that the hike might have a negative effect on employment by costing 500,000 jobs. The CBO also estimates $10.10 would lift 900,000 families out of poverty and increase the incomes of more than 16 million low-wage workers.

As with most policy proposals, there are some people who benefit and some who will be harmed by an increase in the minimum wage, and the CBO report seemed to find just that. The New York Times reported that: “Republicans contended the policy would be a job-killer, while Democrats asserted it would help alleviate poverty. Economists said both might be right.
 And the White House, in an unusual twist, openly disputed the budget office’s math.”

An unusual twist, but not necessarily a surprising one. One doesn’t have to look hard for headlines from the past, declaring “White House Touts CBO Report” on any number of topics. “White House Touts CBO Immigration Report,” said one. “CBO: President’s Budget Will Bring Down The Deficit,” declares a White House press release from 2012 and shortly thereafter, the President’s budget would go down with zero “yes” votes in Congress from either party

When it is convenient, the CBO is the Nonpartisan Arbiter of Absolute Truth. When inconvenient, CBO is—well—pay no attention to that report they just released.

Inconsistency in Washington politics today is the rule, not the exception, and it goes far beyond bill scoring. A filibuster is awful obstructionism, until it is used to stop a bill your side thinks is bad. “Dark shadowy money buying elections” is another person’s “important voter education campaign on a key issue.” When it’s a conservative group spreading the word about the downsides of the Affordable Care Act or the perils of our massive national debt, it’s bashed as a perversion of democracy; when the content changes to talking to the public about climate change, suddenly it seems to some like a great act of service to educate the voting public.

When it is convenient, the CBO is the Nonpartisan Arbiter of Absolute Truth.

So when the CBO comes out and says the an increase in the minimum wage will lift some out of poverty, but destroy jobs for others, it is depressingly comical to see the job destruction claim dismissed out of hand by Democrats, as if CBO is only ever worthy of the Nonpartisan Arbiter of Absolute Truth treatment when its reports good news for the White House. Anything acknowledgment of potential downsides to a policy must be rebutted fiercely. It seems impossible today to acknowledge the other side might have a point, that in all things there are trade-offs and that we’re better off acknowledging the real winners and losers of a given policy direction.

An increase in the minimum wage is likely to mean some jobs go away. Bill Gates gave an interview on Morning Joe where he made an argument for why that might be the case: a minimum wage increase would likely encourage “labor substitution” and the automation of tasks to reduce demand for human labor. There are probably some jobs right now where it makes sense to pay someone $7.25 an hour but where it might not make sense to pay someone $10.10 an hour. Those jobs may go away.

Democrats in the last few weeks have touted polls showing that huge majorities of Americans support raising the minimum wage. But when the question notes that there are tradeoffs, that the minimum wage increase might cost some jobs, that support falls dramatically. Absent any downside, a minimum wage increase sounds fine. Given the tradeoffs, the hike seems much less attractive.

Republicans have raised the minimum wage before, with then-President George W. Bush putting his signature on the bill that raised the federal minimum wage up to $7.25. Seven years later, America’s labor market is in a far different place. That the White House has chosen economic inequality as its top priority at a time when our biggest problem is the heartbreaking number of long-term unemployed and still-tepid economic growth is puzzling, at best.

If their policy is as good as they claim it is, they ought to be able to argue that the downside of the lost jobs are outweighed by the benefits to those taking home more pay. But that’s not what the White House wants to do, because they know that’s not a debate they’d easily win.