No, Joni Ernst Is Not an Extremist on the Minimum Wage

by Reihan Salam

To make his case that Joni Ernst, this year’s Republican U.S. Senate nominee, “exists on the radical edge of the Republican Party, with polarizing views on almost everything under the sun,” Jamelle Bouie, a Slate political columnist, draws on her supposed opposition to a national minimum wage. “Ernst is against the national minimum wage,” Bouie writes, “and [she] believes it should be the full responsibility of the states.” It happens that I oppose a national minimum wage, and so I was delighted to see that at least one GOP Senate candidate felt the same way. In June, however, Ernst explicitly stated that she supports a national minimum wage, and indeed she claimed, inaccurately as far as I can tell, that she had never called for its abolition. That is, Ernst seems to have walked back her earlier opposition to a national minimum wage, presumably in an effort to seem mainstream. Ernst’s current position is that above a federal baseline, state governments should take the lead in setting the minimum wage. This is a view that is very much within the mainstream. Indeed, it is so within the mainstream as to be banal. So on this issue, at least, I am more extreme than “far, far outside the mainstream” Joni Ernst.

The findings of the Center for American Progress survey Bouie cites to underline Ernst’s extremism are hard to reconcile with his argument: 53 percent favor raising the national minimum wage to $10.10, a robust majority that nevertheless doesn’t relegate the 47 percent who oppose doing so to fringe status; and while 57 percent favor a national minimum wage, a surprisingly large share of Americans would prefer to do away with a federal wage floor. There are many views held by far fewer Americans that are considered well within the mainstream. Over 70 percent of Americans oppose increasing immigration levels, which tells us that calls for abolishing the national minimum wage are in one important sense less extreme than support for the bipartisan Senate immigration bill, which will dramatically increase immigration levels. But of course support for the Senate bill is seen by many elite policymakers as a sine qua non of mainstreamness.

Bouie’s substantive case against Ernst’s position on the national minimum wage is that by arguing that the current minimum “is a great starter wage for many high school students,” she neglects the important fact that “most minimum wage workers aren’t teenagers, and a substantial number have children of their own,” and that the average annual income of a full-time minimum wage worker “is below the poverty line for a family of four.” It is true that roughly 26 percent of the workers who’d be impacted by the president’s proposed minimum wage hike have children, and that most of these workers need help to make ends meet. To address this problem, the federal government relies on a number of tools, including the earned-income tax credit (EITC), to ensure that workers with low earnings can meet their basic needs. One concern about increasing the minimum wage is that it will price workers with limited skills out of the labor market, which in turn will make it difficult for them to build skills and climb the earnings ladder over time. Bouie is correct that most minimum wage workers aren’t teenagers, yet an increase in the federal wage floor that contains no explicit exemption for teenagers will price out at least some teenagers from the labor market. A similar logic applies to other workers who might need substantial on-the-job training before they can command even a modest wage on the open market, like ex-offenders and the long-term unemployed.

There is plenty of room for disagreement on where exactly a wage floor should be set. One perfectly coherent view is that as long as the federal government is financing wage subsidies and work supports, like the EITC and SNAP, it has a good reason to impose some wage floor, lest low-wage employers in states that choose to go without a wage floor free-ride on federal largesse. Yet there is a broad consensus when minimum wages are set too high relative to average wages, employers are less inclined to hire low-wage workers. Andrew Biggs and Mark Perry have elaborated on how an increase in the national minimum wage will hurt poor regions more than rich regions — the short version is that employers in poor regions won’t simply be able to pass on the cost of higher wages to their consumers, as many of their consumers have low incomes; and so these employers would have little choice but to economize on labor costs by substituting capital for labor.

To be sure, Bouie has other objections to Ernst’s views, some of which I share. (This “Agenda 21″ stuff sounds like nonsense, and calls for impeaching President Obama strike me as unwise.) But on the minimum wage, at least, Ernst isn’t just in the mainstream. She’s in the right.

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.