Monday, February 18, 2013

Raise That Wage

New Krugman:

Now, you might argue that even if the current minimum wage seems low, raising it would cost jobs. But there’s evidence on that question — lots and lots of evidence, because the minimum wage is one of the most studied issues in all of economics. U.S. experience, it turns out, offers many “natural experiments” here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect of minimum wage increases on employment. 

Why is this true? That’s a subject of continuing research, but one theme in all the explanations is that workers aren’t bushels of wheat or even Manhattan apartments; they’re human beings, and the human relationships involved in hiring and firing are inevitably more complex than markets for mere commodities. And one byproduct of this human complexity seems to be that modest increases in wages for the least-paid don’t necessarily reduce the number of jobs. 


So Mr. Obama’s wage proposal is good economics. It’s also good politics: a wage increase is supported by an overwhelming majority of voters, including a strong majority of self-identified Republican women (but not men). Yet G.O.P. leaders in Congress are opposed to any rise. Why? They say that they’re concerned about the people who might lose their jobs, never mind the evidence that this won’t actually happen. But this isn’t credible.  

More here.

It's only been within the last five or six years that I learned about how one of the big conservative economic assertions, that tax cuts for the rich stimulate the economy, has been disproved by actual economic research--it turns out that all these tax savings are generally just shoved into bank accounts where they sit and do absolutely nothing for the economy.  And now it appears that new economic data upturns another beloved conservative economic truism: minimum wage increases do not increase unemployment.  It always felt like a dubious proposition, anyway, but I never had anything really compelling to back it up, just a sense that it was business owners whining about having to pay their workers a wage that is more reflective of the wealth they help their bosses create.  Now it turns out that's exactly what it is, whiny capitalists spinning a bullshit argument because they hate to pay their labor what they're worth.  And that's backed up by actual data.

So we need to raise the minimum wage, obviously, and continue raising it when we need to, which is what indexing it to the inflation rate is all about.  It won't cause unemployment, and it will get more money into the hands of people who deserve it.  And, oh yeah, it will also stimulate the economy: when average consumers have money burning a hole in their pocket, they spend it, unlike the rich, who have fireproof pockets.  And, apparently, everybody except Republican men, a very distinct minority of the population, wants it to happen.

Unfortunately, it won't happen.  Not at all.  The House is now dominated by Republican men, who are unswayed by facts and studies.  No, they prefer their mythology, and reality be damned.  And fuck the poor.  And that makes me wonder if Obama is even serious about this.  Seems to me that this is a nice bone he can throw to the left, but it's something that he'll never have to take any heat for because he knows its DOA.  I guess we'll see if he actually makes a push for it.  I'm betting that he doesn't, and it goes into the SOTU dustbin, with trips to Mars and whatnot.

But at least we're talking about it.  That's something.