July 22, 2014 at 1:00 am


The GOP's minimum wage class war

Even Gov. Rick Snyder, a Republican, saw the wisdom of hiking the minimum wage. (Dale G. Young / The Detroit News)

A hike in the minimum wage has been marched for by activists, supported by President Barack Obama, passed by the Michigan Legislature and signed by Gov. Rick Snyder.

Advocates for an increase argue that this will pull millions of Americans out of poverty and give them more purchasing power. Opponents insist an increase will cost jobs.

A Congressional Budget Office report on the topic gave credence to both sides of the debate. Unfortunately, rather than having any meaningful discussions about what rate would maximize earnings for low-income workers while limiting job losses, we are stuck with rhetorical political talking points designed to manipulate low information voters.

The Detroit News has written multiple articles over the past few months implying that those who support an increase in the minimum wage would live to regret their decision. The examples cited most often suggest that were it not for minimum wage increases over the years, millions more Americans would have been gainfully employed as gas station attendants and bank tellers.

The problem is that while this may sound true there is no evidence that the minimum wage was responsible for the demise of these professions.

The first self-service gas station in the U.S. began operating in 1947 — a full nine years after the first minimum wage. It then took another 30 years for self-service gas stations to take over the majority of the market. The loss of full-service fuel stations correlates far more with the sharp rise in fuel prices in the 1970s than any of the 11 increases in minimum wage over these three decades.

Some 30 years after the first automatic teller machine there are still more than a half million bank tellers, with the number expected to increase over the next decade. The trend doesn’t show ATMs cutting into teller employment in any meaningful fashion.

These attempts to scare low-wage earners into supporting a policy that is against their own best interests is nothing new.

This also requires that people believe that there is a finite number of jobs — an idea which has been proven a fallacy. The automobile may have put horse carriage makers out of work but it created many new jobs. Portable GPS units may have put many map makers out of business, but that doesn’t mean there was a net loss of jobs. The Internet certainly has had a negative impact on traditional newspapers, however few would argue that in the end the Internet means fewer American jobs.

The rise of the U.S. was very much tied to innovation and creation. This conservative propensity of arguing for antiquated occupations to save menial jobs instead of embracing the sort of change that made the U.S. the world power it is today is dangerous.

One imagines most Americans would prefer to lead the world in the jobs of the future instead of the jobs of the past.

Focusing on here-and-now job losses completely misses the point. The idea is to make sure that everyone that has a job can survive on what they make. Replacing low-wage, low-skill jobs with technology and the higher-skill, higher-wage jobs required to manufacture and maintain that technology is a good thing.

Corporate profits are at an all-time high, as are the wages of the top 1 percent. What advocates of a minimum wage hike are asking is that the employees who are producing at record levels get a share of the additional profits they are creating.

If companies are too greedy to spread the wealth, they shouldn’t be surprised when employees use the power of the people to force a change.

Ironically, the tax cuts Republicans have championed for years are based on the same principle as increases in the minimum wage. The idea behind both is to put more money in the hands of the people who earn it, because they will spend it, creating economic activity and more jobs.

Opponents of a minimum wage hike are not looking to give poor Americans an opportunity to work their way up the corporate ladder. They are trying to protect the per-share earnings of stockholders and the greed of the Supreme Court-sanctioned corporate “people” by locking less privileged Americans in to dead-end jobs.

Dale Hansen is a freelance writer. To read more of his work, visit The Politics Blog at blogs.detroitnews.com/politics.