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Wednesday, July 22, 2009

The World Will Not End on Friday - Again

Asteroid impacting EarthThere's a McClatchy article out there that's raised a few objections from liberal commentators. Both Media Matters for America and Crooks and Liars have objected to "On Friday, lowest wage workers get a raise," which ignores the opinions of liberal economists in favor of conservative ones. The federal minimum wage increases from $6.55 an hour to $7.25. Conservatives argue that this will bring America to her knees.

"[S]ome economists worry that the wage increase is coming at the worst possible time and will only make the recession-battered job market tougher for the very workers it's intended to help," McClatchy reports. And, while it's absolutely true that "some economists" say this, it's also true that other economists say pretty much the opposite. Media Matters points us to a piece from National Public Radio that reports that progressive economists think this is a great time to raise the minimum wage:

But liberal economists say this summer is the perfect time for a wage hike: It will put more money into the pockets of people who need it most. Fatter paychecks will stimulate spending and help the economy, they say. Kai Filion, a policy analyst for the Economic Policy Institute, a left-leaning research group, says this wage hike will generate $5.5 billion in consumer spending over the next 12 months.


But the bigger problem here isn't that McClatchy's only looking at one argument. The bigger problem -- one shared by the entire media -- is that no one's looking at the history of that argument. Every time someone suggests raising the minimum wage, the right goes nuts. It'll destroy the economy, crash employment numbers, and drive companies out of business. To listen to the right, raising the minimum wage is an economic nuclear bomb.





And these are arguments that the right makes every time, without fail. "If we do not balance a minimum-wage increase with economic relief for the small businesses, we will stifle job creation and shut the employment door on the very individuals we are trying to help," said Wyoming Sen. Mike Enzi of an effort to raise the federal minimum in 2006.

This has been going on since there was a federal minimum wage. Since 1938 -- when the minimum was set at $0.25 an hour -- the federal minimum has been raised 24 times, with Friday's raise being the 25th. Oddly, these weren't followed by 24 economic disasters as employment plummeted and businesses shuttered.

Given that track record, isn't the real headline here "Conservatives Always Wrong About Minimum Wage?" The same arguments come up every time and, every time, the predictions fail to come true. The problem with McClatchy's article isn't that it ignores liberal economists, it's that it pretends that conservative economists are worth a damn on this issue.

And it's not just McClatchy that makes this mistake every time, it's the entire media. In any interview of a conservative on minimum wage, the one question that's almost always missing is "Isn't that exactly what you said the last time?"

In fact, McClatchy may be doing us a favor, since the issue generally slips off the radar once the debate is won or lost. No one talks about the minimum wage once it happens -- not with wall-to-wall coverage and talking head panels, anyway -- they only report on the fight over raising it. As a result, the predictions are allowed to fall down the memory hole, forgotten by a media with the attention span of a goldfish. If we'd follow the entire process, not just the initial stage, we'd be a lot better informed in the future. If we were reminded of the failed gloom-and-doom predictions, it'd be a lot harder for Republicans to recycle them the next time around. We've got a 24-hour news cycle, you'd think we could jam some consumer-side economic news in between Celebrity News Item A and Celebrity News Item B.

As it is, Republicans are already getting away with making conflicting arguments about the economy. The current GOP line is that the stimulus has failed. If the minimum wage, which adds $5.5 billion to people's pockets, is such a tremendous hit on the economy, how is it that a $787 billion stimulus package can have no effect at all? Someone explain that one to me, because that doesn't make any damned sense.

When the federal minimum goes up this Friday, a lot of people are going to get a raise. The economy won't crash and American small business won't become extinct. And those facts won't be news, because "House Not on Fire" isn't a headline. But "Conservatives Maintain Perfect Record of Being Wrong About Minimum Wage" should be. Seems to me that's kind of newsworthy and it seems to me that that's the story being ignored here.

Why are these people allowed to get away with being completely wrong so consistently? That should be Friday's question of the day.

-Wisco


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4 comments:

anonymously said...

Nice post, and correct, too. Just a quick note: it's Sen. Mike Enzi, not Rep. Mike Enzi.

Wisco said...

Dang, you're right. Sometimes the fingers work faster than the brain. Fixed now. Thanks for the heads-up.

SMG said...

The increase will not crash the economy but it will also do very little to help the people it is intended to help. Labor is the primary variable cost in business so if I am forced into increased labor costs (during a shrinking economic cycle) I will be forced to raise prices to offset the loss in profit. Those same minimum wage workers will now pay more for the same goods and services, basically a zero sum gain for them and a loss for those of us not getting a raise.

M said...

"if I am forced into increased labor costs (during a shrinking economic cycle) I will be forced to raise prices to offset the loss in profit."

By that measure, increased purchasing power offsets the hit on business, increases demand and productivity.

Stir economic the pot!

This couldn't have come at a better time in my opinion.