August 25, 2016
An Idea Conservatives Should Love
Posted on Feb 17, 2014
There is a magnificent public policy that achieves many of the goals conservative politicians regularly extol. These include promoting work over dependency, reducing the cost of social welfare programs, fostering economic growth and strengthening families.
The policy in question is raising the minimum wage. The only mystery is why so few conservative politicians see the issue this way. Rank-and-file conservatives know better. A December Washington Post/ABC News poll found that 53 percent of self-described conservatives supported a minimum wage increase. Republican politicians who are so solicitous of conservative opinion need to follow the moral and practical intuitions of those they say they represent.
One conservative, at least, is speaking for this majority. Ron Unz, a Silicon Valley millionaire and one-time Republican candidate for governor of California, is championing an initiative to raise his state’s minimum wage to $12 an hour. His reasons are thoroughly in keeping with his ideology.
Unz argues that a minimum wage hike “would function as a massive stimulus package.” He told ABC News that if the national minimum were increased to $12, “probably between $150 billion and $175 billion a year would go into the pockets of the lower-wage families that spend every dollar they earn. It would cause a tremendous boost in economic demand.”
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He also pointed to the fact that government—through wage subsidies in the tax code, Medicaid and food stamps—is now conferring substantial benefits on employers of low-wage labor.
“One of the strange things in our society right now is that we have all these low-wage workers who are getting $7.50, $8 or $9 an hour,” Unz says, “and because they earn such small wages, the government subsidizes them with billions or tens of billions of dollars of social welfare spending that comes from the taxpayer. It’s a classic example of businesses’ privatizing the benefits of their workers while socializing the costs.”
Now the truth is that inequality has grown so much that various programs to improve the living standards of the working poor are absolutely essential. Some should be expanded. Both Sen. Marco Rubio, R-Fla., and President Obama have suggested that the Earned Income Tax Credit be broadened to support workers without children (although Rubio proposed ill-advised EITC cuts elsewhere). A nation that proclaims its reverence for work should agree that nobody who works full time should fall below the poverty level.
But there’s a limit to how much taxpayers should be asked to subsidize employers. Lifting the minimum wage would help correct the balance.
How many people would a minimum wage increase help? A study by Jason Furman and Betsey Stevenson of the White House Council of Economic Advisers found that a fully phased-in $10.10-an-hour minimum would give 28 million workers a raise, “including 19 million making less than $10.10 and another 8 million with wages just above $10.10 who would benefit from the ripple effect.” Nearly half of the benefits would go to households making under $35,000, and contrary to the claims of many opponents, “only 12 percent of minimum wage beneficiaries are teenagers.”
They also cited research showing that a wage hike of the sort being proposed nationally would have “little or no” impact on employment. They concluded that “a substantial portion of the cost to employers of minimum wage increases is offset by savings from reduced employee turnover and higher worker productivity.”
In an important article in the economic journal Challenge, “A Conservative Case for the Minimum Wage,” Oren Levin-Waldman, professor of public policy at Metropolitan College of New York, offers a similar view and makes the compelling moral points. Higher pay “increases the autonomy of low-wage workers,” he says, thus advancing “personal freedom” and “a core concept in conservative thought, which is personal responsibility.” This, in turn, means less dependence “on the largesse of others.”
And, as Annie Lowrey argued earlier this month in The New York Times, those who rightly worry about the breakdown of marriage need to remember that “creating good jobs with growing wages at the bottom of the income scale might be the best, if hardest, way to encourage young couples to wed.”
Conservative politicians really need to ask themselves: If they refuse to raise the minimum wage and at the same time insist on cutting health care and wage-support programs, are they not consigning millions more of their fellow citizens to lives of poverty? Most Americans reject this view, and that includes most conservatives who believe in work, family and personal responsibility.
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