Which Minimum Wage?

by Ramesh Ponnuru

Jamelle Bouie writes in Slate:

All of this doomsaying raises a question: If raising the minimum wage destroys jobs and prevents employment, then lowering it would do the opposite. And if you gain from lowering the minimum wage, then why have one at all?

Senator McConnell’s accurate citation of a CBO projection of potential job loss from the proposed minimum-wage increase is the sort of “doomsaying” Bouie has in mind. As Bouie points out, some Republicans would abolish the minimum wage had they the power, which they never will. (I’m not sure, by the way, what the point of staking out such a hypothetical position is.) But the question he raises need not be treated as a rhetorical one, and opposition to an increased minimum wage does not simply imply opposition to a minimum wage in principle.

For one thing, it’s not just opponents of a higher minimum wage who think it would destroy jobs while a lower one would create some. Almost everyone who has thought about this question believes these claims are true. Most proponents of a higher minimum wage think the trade-off is worth it because the job loss will be small and the benefits to people who will receive the higher wage large.

Opponents of an increase sometimes say to the proponents, “If $10.10 is such a good idea, why not $25?” This is not a great argument, because the proponents can reasonably say that the trade-off in that case would be much worse. But if it’s logically possible to favor a $10.10 minimum wage but not a $25 one, then it’s also possible to favor a $7.25 one and not a $10.10 one. (Tim Pawlenty, one of the Republicans Bouie mentions, wants one somewhere in between $7.25 and $10.10.)

So an opponent of raising the minimum wage to $10.10 could answer Bouie’s question as follows: Yes, raising the minimum wage destroys jobs, as nearly everyone understands. I think it is an especially bad idea when the increase is nearly of 40 percent and it’s in the middle of a persistently weak labor market.