Post-Gazette Editorial – 6/27/06

This page was last updated on June 28, 2006.

Minimum sense / The rich get richer and the poor get nothing; Editorial; Pittsburgh Post-Gazette; June 27, 2006.

The PG opinion pages FAQ alleges, “it wouldn’t be unfair to describe the Post-Gazette’s philosophy as generally liberal on social issues and more conservative on economic issues.” This editorial lays bare the falsehood of “more conservative on economic issues.”

There is no way you can support the minimum wage – let alone increases – and claim you are “more conservative on economic issues.” If wage controls are an example of being “more conservative on economic issues,” I’d like to see a list of economic positions the PG considers “more conservative.” I’d also like to see what it takes for the PG to consider an economic position to be liberal.

Below is a detailed critique of the subject editorial.

“The tyranny of political ideology continues to cast a bewitching shadow over the Republican-controlled Congress. It means that debating points recur like a broken record and reality is seldom acknowledged. Witness what happened last week with the proposals to raise the federal minimum wage.”

[RWC] It’s humorous when an editorial like this talks about “reality” and then proceeds to extol the virtue of raising the minimum wage.

“The federal rate of $5.15 an hour was last raised in 1997, and nine times now the Democrats have sought an increase and the Republicans have blocked it.

“An Associated Press story contained a quote from Sen. Johnny Isakson, R-Ga., that neatly framed the argument from the conservative viewpoint: ‘For every increase you make in the minimum wage, you will cost some of them their jobs,’ he said. (It would be nice if his party showed similar concern for workers regarding the outsourcing of jobs and the burden of higher gasoline prices on the economy, but only the minimum wage seems to set off alarm bells.)”

[RWC] There are two problems with the parenthetical sentence in the above paragraph.

Regarding outsourcing, it’s a myth. Otherwise, how do you explain low and decreasing unemployment while at the same time our population increases and we absorb millions of illegal aliens?

Regarding gasoline prices, what does the PG expect the government to do? Price controls?

“Sen. Isakson described the clash as a ‘classic debate between two very different philosophies. One philosophy that believes in the marketplace, the competitive system ... and entrepreneurship. And secondly is the argument that says the government knows better and that top-down mandates work.’

“Notwithstanding Sen. Isakson’s disparagement of government, the old chestnut about not raising the minimum wage because it would kill jobs is really what animates this debate. Let us concede that it contains some truth -- up to a point. After nine years, that point long ago collided with reality.”

[RWC] Unless you’re a full-blown socialist, how does Sen. Isakson’s statement “disparage” government? Isakson stated the situation succinctly and didn’t disparage anything.

Remember, the PG tells us it is “more conservative on economic issues.”

“Back in 1998, one year after the last raise, maybe it was fair to argue that the benefit of so soon increasing the minimum wage was overshadowed by the threat of lost jobs. But nine years later? If the economy really is booming because of tax cuts, as the administration’s boosters are constantly insisting, then surely whatever jobs would be lost by raising the minimum wage would be soon made up.”

[RWC] “As the administration’s boosters are constantly insisting?” Doesn’t the PG read the monthly reports?

We can’t “make up” jobs lost by increasing the minimum wage. This is like saying we can make up for a lost opportunity. As long as employers are forced to pay people more than the economic value of their work, there will always be fewer jobs than would be the case in a free market.

“In any event, the proposal put forward by Democratic Sen. Edward Kennedy of Massachusetts was measured and reasonable, allowing time for employers to absorb the raise. It would have increased the minimum wage from $5.15 to $5.85 starting 60 days after enactment. It would have further raised it to $6.55 one year later and $7.25 a year after that.”

[RWC] If increasing the minimum wage is a good thing, why do we need to allow “time for employers to absorb the raise?”

By the way, when you factor in the employee Medicare and Socialist Security taxes paid directly by the employer, $7.25/hour is really $7.80/hour.

“Yet only eight Republicans joined the Democrats to support this proposal, which needed 60 votes to pass but mustered only 52. To his credit, Pennsylvania Sen. Arlen Specter was one of them.

“Sen. Rick Santorum, on the other hand, was his old ideological self, voting with the 46 Republicans. Mr. Santorum talks a good game about family values, but when push came to vote, he decided not to help the working poor lift themselves from poverty, siding instead with the Chamber of Commerce types.”

[RWC] While bashing Sen. Santorum, the editorial failed to note he supports an increase ($1.10/hour), just not as big as the one supported by the PG. Santorum is wrong to support any increase. If you’ve been following Sen. Santorum, you know he is not an economic/fiscal conservative.

Increasing the minimum wage does not lift anyone from poverty. In general, we are all paid based on the economic value of our work, and the economic value of a job is determined relative to other jobs. When we arbitrarily raise wages for one group, that results in ripples in the rest of the economy. For example, if you currently make $2/hour more than the minimum wage, will you accept the same wage if the minimum wage is jacked up $2? No. As a result, everyone’s wages eventually increase to restore “equilibrium” and this results in higher prices for goods and services. Once the ripples have settled down, the guy “earning” the minimum wage is back at square one. That’s why I refer to this exercise as akin to a dog chasing its tail.

“On Thursday, the state Senate followed the House in approving a $2 increase in the state minimum wage, which also hasn’t changed in nine years (21 states have raised their wage standard since then). Differences between the Senate and House versions must be ironed out and the raise would not come into effect until next year at the earliest).

“The Post-Gazette has not supported raising the state minimum wage ahead of action in Washington, but how can we raise a reasonable objection now? A Congress favorable to the rich seems determined to do nothing for the poor. Ideology rules.”

[RWC] How is not raising the minimum wage “favorable to the rich?” Indeed, the “rich” are the only people not adversely affected by the minimum wage or increases to it.