A New York Times editorial last week argued that opposition to increasing the minimum wage amounted to “hardheartedness”, an indication that opponents of an increase “don’t really care about people falling from the middle to the bottom”.
The Times pushes this narrative not only on its opinion pages, but in its “news” articles, as well. Last month, the Times reported:
In the capital, Mr. Obama and congressional Democrats are supporting legislation that would raise the federal minimum wage to $10.10 an hour by 2015….
Democrats prize the issue of a minimum-wage increase because it would help address income inequality….
Notice that the Times unquestioningly accepts the Democrats’ premise that increasing the minimum wage “would help address income inequality”. Hence, if you are against increasing the minimum wage, you must be ipso facto be opposed to addressing income inequality. But what if that premise is false?
The problem with this kind of partisan reporting (the Times is using the issue to attack Republicans) is that it is willfully dishonest. For the Times to imply that anyone opposed to increasing the minimum wage must just be coldhearted and unconcerned about the plight of the working class is dishonest because by propagating that assertion, they willfully ignore — and keep their readers ignorant about — the argument for why eliminating the minimum wage would be a more effective means by which to address income inequality.
The Times editors cannot be unfamiliar with this alternative argument. In fact, the newspaper has itself presented this argument in the past. It editorialized in 1987 that raising the federal minimum wage from $3.35 an hour was “a mistake”, that “there’s a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market.” A higher minimum wage “means fewer jobs”; it “would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.” In conclusion, “The idea of using a minimum wage to overcome poverty is old, honorable—and fundamentally flawed.” The title of the editorial was “The Right Minimum Wage: $0.00”.
Naturally, the consequence of outlawing jobs — which is what minimum wage laws do — is to create unemployment. And naturally, exacerbating unemployment and making it harder for people to earn a living exacerbates income inequality by pricing new entrants into the workforce or low-skilled workers right out of the market for labor.
Hence, there is nothing “hardhearted” about opposing an increase in the minimum wage, and opposing the outlawing of jobs by no means indicates that one is uncaring about the plight of the working class.
Oh, and here’s the Times‘ resident Nobel Prize-winning economist, columnist Paul “Conscience of a Liberal” Krugman, on the effects of minimum wage laws (see my previous post):
“So what are the effects of increasing minimum wages? Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment….”
“This is what happens when there is a price floor on the wage rate paid for an hour of labor, the minimum wage: when the minimum wage is above the equilibrium wage rate, some people who are willing to work — that is, sell labor — cannot find buyers — that is, employers — willing to give them jobs.”
Of course, when Krugman is playing his role of liberal pundit, he pretends not to understand all of that and argues in favor of increasing the minimum wage anyway — at the same time he also argues for higher inflation in order to reduce the purchasing power of the working class and hence to reduce their real wages in order to combat unemployment. Truly, the man has a dizzying intellect. See my previous post.