Thursday, September 15, 2005

Minimum wage creates clash of the opinion pages

Two editorials from the Pittsburgh end of the state in response to Governor Ed Rendell's mention of minimum wage as part of his agenda for the session to start a week from Monday: the Patriot-News thinks it's long overdue
As we noted earlier this year, the buying power of the minimum wage peaked in 1968 at $1.60. It is now near its lowest actual worth, adjusted for inflation, in its history, with an estimated two-thirds of those who are paid at this level adults. With rising energy prices, and inflation generally starting to gain ground, it is time to give those workers on the bottom rung of employment a boost in income.
. . .
It shall be interesting to see whether those lawmakers who voted themselves a pay increase so over the top that it shocked the commonwealth from Erie to Chester can vote to deny a pay raise to those laboring at the margins of economic sustainability.
... while the Tribune-Review thinks it's foolhardy.
Not only are most minimum-wage earners not "poor," half are under 24 and nearly half of them still live with their parents. Nearly two-thirds are part-time workers. And the average family income of the typical minimum-wage employee in Pennsylvania is $50,000.

The irony of the Rendell proposal is that, if adopted, it would kill thousands of entry-level jobs so vital to giving young people their first critical work experience.
I don't know the publications that well, but I can guess that they represent rather different slices of the political spectrum . . .

I'm no expert in this field, nor about to become one with a few Google searches, but that last study doesn't jibe with what I've heard from a bunch of independent sources. To randomly waive other data (say, this), I might offer:
• Historically, analyses of the minimum wage's impact on young workers have never shown the predicted large job-loss effects.
• The small negative employment effects found in past analyses diminish over time and are no longer statistically significant.
• Minimum wage increases are well targeted in the sense that 63% of the gains from a dollar increase in the minimum wage would be expected to accrue to working households in the bottom 40% of the income distribution.
• Of the 8.4 million workers (age 18 to 64) whose wages and incomes would increase with a one-dollar raise in the minimum wage, 2.7 million (32%) are the parents of 4.7 million children. Of the 2.7 million parents who earned at or near the current minimum wage in 1999, 63% had family incomes below $25,000.
• Most minimum wage workers are adults (71%), age 20 and up. Women and minority workers are over-represented among the minimum wage workforce. Slightly less than half (48%) of the minimum wage workforce are full-time workers.
Note that parts of this list aren't necessarily inconsistent with the above, but certainly casts the light in a different direction. So, as ever, one must take the "facts" in opinion pieces with a grain of salt.

Update:
here's a related study showing that the cost of insuring a family of 4 is now more than the annual salary of a minimum wage worker...

2 Comments:

Blogger Rep. Mark B. Cohen said...

The Pittsburgh Tribune-Review is the paper of Richard Mellon Scaife, whom, the Inquirer reported, gave $4.5 million dollars over a period of many years to the groups opposing the legislative pay raise.

The Harrisburg Patriot is a center-right newspaper which generally backs Republican candidates. It's support is a welcome sign that elements of the Republican mainsteam are open to the idea of raising the minimum wage. It is, I believe, the first newspaper in the state to endorse the idea of annual cost of living increases for recipients of the minimum wage.

8:23 PM  
Blogger ACM said...

Thanks for the input. Actually, reading the Patriot editorial, it's hard not to come away with the feeling that it's a grudging change of heart, rather than a natural position (as, e.g., for a liberal editorial staff). As you say, all the more powerful for coming from unexpected quarters.

11:28 AM  

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