The minimum wage has shifted the Democratic Party to the left and detached them from the economic reality of minimum wage as a policy tool.
“Progressives have gone crazy over the minimum wage,” Shikha Dalmia wrote for The Week. In their drive to improve living and working conditions for the working class, they’ve disregarded the actual effects of mandated wage levels.
“Minimum wage advocates are making increasingly fanciful claims on behalf of their beloved laws,” Dalmia wrote.
Were the wage to spur employees to increase their productivity, that could erase some negative effects of the minimum wage. Or, if the affected industries lacked much competition, a higher minimum wage be so distortionary. The minimum wage is difficult to pin down its effects when the changes are small and instances where it could benefit workers can be made, but it doesn’t mean that’s the reality in which most cities and states exist. Preliminary data from Seattle and Los Angeles isn’t mimicking the promises minimum-wage advocates have made.
“It is inconceivable that a $15 minimum wage — equal to 86 percent of America's median wage, and the highest in the Western world — wouldn't kill jobs, especially in small towns and cities where wages tend to be lower,” Dalmia wrote.” Witness the chronic double-digit unemployment rate that a far less insane minimum wage has generated in France, Spain, Belgium, and other European countries.”
When minimum wage doesn’t lead to unemployment, it can cause price increases. Employers can’t lower wages, and laying off workers isn’t always a solution or practical, so the higher costs get transferred to consumers.
“The entire effort to raise the minimum wage is being pushed by organized labor, mostly government-employee unions,” Chuck Devore, vice president of national initiatives at the Texas Public Policy Foundation, noted. “The odd part is that very few of their members make minimum wage.”
Minimum wage increases have been fueled by groups whose members aren’t directly affected by the change. Their jobs are safe, and the risk is low. The well-intentioned, grasping for effective policy to aid the economically disadvantaged, have surrendered reality to ideology.
It’s also a relatively weak policy instrument to aid workers who struggle in providing for themselves and their families. Workers under the age of 25 comprise almost half of minimum-wage earners. High school and college students, earning money on the side or developing skills, aren’t the face of the minimum-wage battle, but they disproportionately represent the workers in those jobs. Destroying jobs and limiting economic growth for millennials entering the workforce would be a much harder sell in political debates, and it’s one reason why so few people look at the demographics of who earns the minimum wage.