Speaker Boehner Claims Raising the Minimum Wage Would Hurt Employment, Which Isn’t True In Real Life
President Obama’s announcement at the State of the Union that he supports an increase in the federal minimum wage has re-sparked a long-running debate: what actually happens to an economy when you raise the minimum wage?
Republicans like Speaker John Boehner think they know pretty well. This is what the Speaker said in response to the State of the Union:
“I’ve been dealing with the minimum wage issue for the last 28 years that I’ve been in elected office,” he told reporters. “And when you raise the price of employment, guess what happens? You get less of it. At a time when Americans are still asking the question ‘Where are the jobs?’ why would we want to make it harder for small employers to hire people?”
Boehner’s argument is that raising the minimum wage hurts a local economy because you are “raising the cost of employment” – so it would follow that the higher a minimum wage is, fewer jobs are created, and unemployment rises, right?
Except in real life, that doesn’t happen.
Take San Francisco, California. Not only is it a favorite punching bag of conservative politicians, it’s also the city with one of the highest minimum wages in the country. In 2003, voters approved a local ordinance raising the minimum wage and tying it to local inflation. So, on January 1, 2013, San Francisco’s minimum wage went up to $10.55 an hour.
Using the Boehner argument, SF would have higher unemployment than other parts of the state, right? Except, not at all. San Francisco enjoys a 6.7 unemployment rate, much lower than the national average, and lower than its sister cities Los Angeles and San Diego, where the minimum wage is $8 an hour.
Another example: Santa Fe, New Mexico, which has the nation’s second highest minimum wage, $10.29 an hour. Is Boehner right? Has Santa Fe seen an economic downfall since the City Council passed a living wage measure in 2003? Uh, not quite. Santa Fe has a ridiculously low unemployment rate of 4.8 percent – again, lower than its similar-sized neighbors Albuquerque, Rio Rancho, Las Cruces, and Roswell, where the minimum wage is $7.50 (or it was until Albuquerque voters decided to raise theirs to $8.50 by a 32 point margin).
There are many factors that affect a city’s employment rate, to be sure. But the predictions of doom from the right every time workers want to earn marginally more for their work are based on ideology and conjecture, not fact.
And if it’s not just about employment – if conservatives want to talk about what’s “fair” for both workers and employers – shouldn’t workers get paid what they are worth? Shouldn’t workers be paid according to how productive they are?
Here’s worker productivity since 1950, versus the inflation-adjusted minimum wage:
If we’re paying workers based on their productivity, the federal minimum wage should be $21.72 an hour.
So, Speaker Boehner and friends: Instead of crying about the sky-falling from a $1.25 increase in the minimum wage, you should be thanking your lucky stars that President Obama’s proposal of a $9 minimum hourly wage is so – what’s the word – conservative.