Some important people on the Right, starting with the maverick Ron Unz but apparently including such as Phyllis Schlafly and Bill O’Reilly, have come out in favor of a higher minimum wage, such as $12 per hour. The argument against that, which I cannot dismiss, is that it prices
a lot of marginally employable people out of the market. In the short run, this is of course true, and we cannot view a higher minimum wage as some Moses’ rod by which we strike the corporate rock and more money comes out. The counter-arguments that seem to have some validity are three:
- Those that do receive the minimum wage increase will spend most of the increase – and that will stimulate the economy enough, and create enough for low-end labor, to hire back most of the people, at this higher wage, that were priced out of the market in the short run.
- Higher minimum wages will encourage businesses to invest in capital rather than labor, ultimately raising productivity for all. [One problem with this is that the new jobs being created here may not be the ones for which those who were priced out of the market are qualified.]
- Real minimum wages have been higher in the past than now, and at some of these times unemployment has been lower than now.
Ron Unz adds an interesting argument; raising the price of cheap labor will price some of the immigrants out of the market, encouraging them to go back to Mexico or wherever. That is true of those that are being paid ‘above the table’, so to speak; and I would also add that undocumenteds who have gotten into ‘above the table’ jobs where they are paying withholding taxes should be considered as “under the jurisdiction of the United States,” as the Fourteenth Amendment puts it, so that children born to them should also be so considered, and therefore citizens. That is not the case for the ‘cash under the table crowd’. Not only are they, and their children born on American soil, not “under the jurisdiction of the United States,” since they are in the informal economy anyhow, the minimum wage will pass them by; they are probably not, for the most part, getting the legal minimum wage now! Unz seems blind to this.
But there is a higher minimum wage law that I could accept. If a minimum wage of up to $12 per hour were required for persons between the ages of 26 and 65, the age at which most people are most likely to be raising families or putting them through college, and there was no raise for workers under or over that age bracket.
- The minimum wage arguments would be put to the test. Would people try harder to hire younger workers under such a system? It is the young that are having the most trouble finding work; as on-the-job training seems to become a luxury to most businesses, ‘losing one’s work virginity’ seems like something we have to offer incentives to employers for.
- Because people who are out of work for six months are considered unemployable by the culture, and seem to get their “work virginity” back, I had thought of also setting a lower wage for anyone who had been employed six months; but that might create an incentive for employers to keep people off the rolls for six months, and so I don’t think this is a good idea.
- In so far as a higher minimum wage is of benefit to ‘working families’, it would apply to the parents of many of those families; and to persons under 26, it might hopefully apply as a disincentive to become a parent too early.
- I have exempted people over 65 [and I could consider making that as low as 55] because people will need to work, and employers need incentives to hire them, much later in life than we have been used to. Social Security can be made a lot more sustainable by raising the age of eligibility to say 72. There are people whose jobs involve [or are] physical hard labor that have legitimate reasons for not waiting that long to retire; a separate plan through unions, or through the disability system [which a lot of them are using already] can take care of them
So I cannot support a higher minimum wage for all ages; but I am willing to accept this targeted higher minimum wage that I have suggested,
In response to: “The Minimum Wage and Illegal Immigration” by Ron Unz