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June 26th, 2017

Insight

Don't think about it, just vote

Paul Greenberg

By Paul Greenberg

Published Dec. 11, 2014

The least surprising result here in Arkansas election night was the overwhelming approval of an initiated act to raise the state's minimum wage. It passed by a landslide vote -- something like 65 percent. Three other states raised their minimum wage in this election year, too: Nebraska, Alaska and South Dakota. Why, sure. Who'd begrudge hard-working folks making the bare minimum a raise? "Give America a Raise!" to quote this president's slogan for his own, national version of the same idea.

Put a proposal on the ballot with a description like "higher minimum wage" and the instinctive response in the split-second it takes to vote on the issue is to click the box FOR it, and move on down the ballot.

Call it a reflexive reaction -- as in automatic, instinctive, requiring no thought. Like a knee jerking. Because an examination of the actual effects of minimum-wage laws over the years indicates that, if they're not just ineffectual gestures, they can actually hurt the poor, hard-working folks they're supposed to help.

Why? Because employers who hire low-wage workers still have to make a profit to stay in business, and if they can't, if the law requires them to increase wages to a level they can't afford, or raise prices to a level their customers can't or won't pay, then they have little choice but to cut their payroll -- and let a lot of those same low-wage workers go.

Maybe that's why the Congressional Budget Office found that a higher minimum-wage law on the federal level would cost the country's economy half a million jobs.

Before pulling that lever in the voting booth, reflexive supporters of ever higher minimum-wage laws might stop and ask themselves: What good does it do to raise the pay for jobs that no longer exist?

Here's another fact that doesn't jibe with the assumption that raising the minimum wage will help poor folks who have families to support: Less than 5 percent of those making the minimum wage in this country are adults working full-time. And even they would be eligible for other, better-targeted benefits -- like the Earned Income Tax Credit that effectively supplements their take-home pay, keeps them working and off the welfare rolls, lets them go on moving up from the rock-bottom of the working poor, and preserves their self-respect. Sure beats getting laid off.

The history of minimum-wage laws in this country also shows the devastating effect they can have on today's chronically unemployed and under-employed -- like black teenagers. Back in 1949, to quote Thomas Sowell's magisterial textbook "Basic Economics," unemployment among black teenage males "was lower than it was to be at any time during the later boom years of the 1960s." It may not be just a coincidence that 1949 was also the year before a long series of government-mandated escalations in the minimum wage began.

The year before that wave of mandatory raises started (1948), unemployment among 16- and 17-year-old black males was no higher than among white males of the same age. But as the minimum wage was raised time and again, black teenage unemployment soared -- till it doubled that among white male teenagers.

By early this century, unemployment among black male teenagers was more than 30 percent, And after the Great Recession hit in 2008-09, it reached 40 percent. Which figures. Adopt measures that eliminate low-wage jobs, and those who held them find themselves jobless. Or as Thomas Sowell put it, "The real minimum wage is zero: unemployment."

But how go into all these facts and figures, and enough data to bore the pants off anybody but an economist, when it's so much easier to make a snap judgment? And, like one of Pavlov's dogs, respond automatically when given the right signal, in this case just the mention of a higher minimum wage. Put it on the ballot and passage is virtually assured. A lot of thought can be saved that way. Just go with your instincts. However mistakenly.

It takes a brave politician to defy the conventional unwisdom and point out that raising the minimum wage makes minimal sense. Maybe only someone with a background in economics and finance -- like French Hill, a candidate for Congress here in Arkansas -- would be foolhardy enough to talk sense about this issue. Rather than indulge in the usual sloganspeak. ("Give America a Raise!")

A banker and entrepreneur here in Little Rock with considerable success as both, Mr. Hill explained that he'd have to give the issue some thought, weigh all sides, and consider the real effects of raising the minimum wage. He refused to be hurried into a decision. Or be bullied into announcing where he stood before he'd made up his mind. In the end, he says, he wound up voting against still another raise in the minimum wage when he got to the privacy of the voting booth. And the voters wound up making him congressman-elect from the Second District of Arkansas.

Strangely enough, thought and deliberation still pay -- even in politics.

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Paul Greenberg is the Pulitzer-winning editorial page editor of the Arkansas Democrat-Gazette.

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