Raise the Minimum Wage

It's another example of the "he said/he said" journalism.

In an article in the Pittsburgh Tribune-Review on January 8, Walter Williams, a professor of economics at George Mason University in Fairfax, Virginia, writes, "There's little debate among academic economists about the effect of minimum wages.  University of California, Irvine, economist David Neumark has examined more than 100 major academic studies on the minimum wage.  He reports that 85 percent of the studies 'find a negative employment effect on low-skilled workers.'"

In an article in the Washington Post on January 4, Mike Konczal, a fellow at the Roosevelt Institute, says "Some studies [on the minimum wage], notably those led by U Mass Amherst economist Arin Dube, argue that there is no adverse employment effects from small increases in the minimum wage.  Other studies, notably those lead by University of California, Irvine, economist David Neumark, argue there is an adverse effect."

As Speaker of the House John Boehner put it last year, "When you raise the price of employment, guess what happens?  You get less of it."  Democrats across the aisle disagree strongly.  

So what is one to make of recent proposals to raise the minimum wage?

Well, somebody out there in these united states must like the idea.  USA Today, doing what it does best--gather data from all across the country--reported on December 30 that 13 states put into effect raises to the minimum wage in their jurisdiction on January 1, 2014.  On that day, state minimum wages will be higher than the federal requirement of $7.25 an hour in 21 states.  Here are the states with 2014 increases:

$7.50 -- Missouri
$7.90 -- Arizona
$7.90 -- Montana
$7.93 -- Florida
$7.95 -- Ohio
$8.00 -- Colorado
$8.00 -- New York
$8.00 -- Rhode Island
$8.25 -- New Jersey
$8.70 -- Connecticut
$8.73 -- Vermont
$9.10 -- Oregon
$9.32 -- Washington

In California, the minimum wage will go to $9.00 on July 1, and to $10.00 in 2016.  Nine states have tied the minimum wage to increases in inflation.  Several other states, and the District of Columbia, have serious proposals in their legislatures to raise the minimum wage in 2014, with good chances of most passing.  

In the same Post article, Konczal goes on to say that economists -- even opponent Neumark -- do agree on one thing:  "They all tend to think that raising the minimum wage would reduce poverty."  Their surveys suggest raising the minimum wage 10 percent (say from $7.25 to near $8.00) would reduce the number of people living in poverty 2.4 percent.  To $10.10, that could mean lifting 4.6 million people out of poverty.  Some studies show little or no job loss; some up to 1% increase in unemployement.  Konczal's conclusion:  "There are significant benefits [to raising the minimum wage], whatever the costs....A higher minimum wage will lead to a significant boost in incomes for the worst off in the bottom 30th percent of income, while having no impact on the median household.

When low-paid workers get more money for their work, they and their families benefit.

In all this recent debate, the voice of the Catholic Church has been mostly silent.  But for decades we lead the way.  As far back as 1906 Father John A. Ryan, a seminary professor from Minnesota, proposed a minimum wage for workers.  He would live to see it enacted for the nation in the administration of Franklin D. Roosevelt in 1938.  Over the next several decades, the bishops' arm in Washington advocated strenuously for increase in the minimum wage, along with labor unions.  I don't think it a stretch to say that when the minimum wage was highest, the gap in income inequality was lowest.

The reason for this advocacy is neatly summarized in two statements for economic justice by the U.S. bishops issued in 1996.

• A fundamental moral measure of any economy is how the poor and vulnerable are fairing.
• All people have the right to economic initiative, to productive work, to just wages and benefits, to decent working conditions as well as to organize and join unions or other associations. 

Now "the just wage" is not "the minimum wage."  In fact (if you give me 20 minutes to lecture you) I can explain how they differ.  But to get to the just wage (which also includes medical benefits, social security, vacation time and other benefits) you have to start somewhere.  And a minimum wage does that, providing a (too low) floor for almost all employers to begin their compensation for work.

I'm glad to see these increases in the minimum wage in various states, counties and cities.   These are baby steps to address the income inequality in our country, and to help those on the lowest ladders of employment.   If the U.S. House of Representatives will not lead, then let the various other jurisdictions do what is best for their citizens.