Reduce it? Hell, Let’s Raise the Minimum Wage!

The voodoo economists at the Montana Policy Institute have offered a tired conservative solution for unemployment: have low-income workers make less money! Writing for the Watchdog, policy director Glenn Oppel claims that Montana teens and other low-income workers would be better served by letting “market forces” dictate their wages than the oppressive influence of the minimum wage.

The editorial claims that the minimum wage has cost Montana teens 1,178, citing the Employment Policies Institute, a front-group for a lobbyist for the  “restaurant, hotel, alcoholic beverage and tobacco industries.”  You’d think a group devoted to transparency would mention that little detail when citing a study, but I digress…

The larger issue, of course, is that Oppel is wrong. The New Jersey Policy Perspective makes it clear that the minimum wage isn’t driving down employment. They compare the eight states which had mandatory minimum wage increases on January 1 with the rest of the country, and found that employment rates were slightly higher in the states increasing their minimum wage:

In fact, those eight states are experiencing more robust job growth than the nation as a whole – and they certainly aren’t losing jobs.

The eight states – Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington – have seen total nonfarm payroll jobs increase by 0.9 percent from December 2011 to June 2012 (from 22,286,900 to 22,483,400), according to the Bureau of Labor Statistics. Meanwhile, the U.S. has seen total nonfarm payroll jobs increase by slightly less – 0.7 percent.

Academic research also makes the case for increasing the minimum wage. As the Center for American Progress notes, academic studies demonstrate that the minimum wage not only does not hurt employment, it increases employee retention:

A significant body of academic research has found that raising the minimum wage does not result in job losses even during hard economic times. There are at least five different academic studies focusing on increases to the minimum wage made during periods of high unemployment—with unemployment rates ranging from 7 percent to 12.3 percent—that find an increase in the minimum wage has no significant effect on employment levels. The results are likely because the boost in demand and reduction in turnover provided by a minimum wage counteracts the higher wage costs.

The simple truth is that not only would raising the minimum wage help families and workers; it would boost the economy as well. Low-income workers don’t spend additional income to tax shelters in the Bahamas; they will spend it here in the United States, improving the bottom line of the companies that the Montana Policy Institute is so worried about.

Along the way, they might even be able to save some money for health care and education.

Rather than discussing ending/reducing the minimum wage, we should be discussing increasing it. Nicole Woo, from the Center for Economic and Policy Research notes that the minimum wage is far below what it should be, when adjusted for inflation:

For example, if the minimum wage had kept up with inflation since 1968, its historical high point, it would now be over $10.50 per hour. And this is despite the fact that today’s low-wage workers are older and better educated than in the past. Had the minimum wage also risen in step with low-wage workers’ age and educational attainment since 1968, it would even higher in 2012, approaching $11 per hour.

Even Henry Ford knew that his workers had to make enough money to buy his cars. It’s too bad that American corporation and their paid shills can’t recognize that same truth today.

If you appreciate an independent voice holding Montana politicians accountable and informing voters, and you can throw a few dollars a month our way, we would certainly appreciate it.