On Tuesday, the Los Angeles City Council decided to boldly go where only three other U.S. cities have gone before, and jack up its minimum wage to $15 an hour.
Technically, it will gradually ratchet up its minimum wage from $9 now to $15 in 2020, and it will be indexed to grow with inflation from then on. Similar policies have already taken hold in Seattle and San Francisco, and have been proposed in Kansas City, Washington, D.C., and New York City. The minimum wage for the nation is currently $7.25, and it does not automatically adjust with inflation.
Among other things, Los Angeles' decision means we are all in for another round of conservatives tut-tutting liberals on the issue. Their objection to hiking the minimum wage tends to come in two interlocking flavors: One, that some number of people will lose jobs, since paying for their labor becomes more costly. And two, there are better policy alternatives, like increasing the Earned Income Tax Credit (EITC).
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What will go unnoticed in this debate, as it always does, is a subtle but rather remarkable point: Namely, that liberal and left-wing enthusiasm for minimum wage hikes is actually a triumph of right-wing moralizing.
Here are two premises that I think can rightly be characterized as "conservative," but that large majorities of Americans probably sympathize with: First, everyone who is able has an obligation to get a job. Second, that an income from a job is morally superior to aid from the government, and that some measure of shame should accompany any reliance on the latter.
But if you combine those two premises with a third premise — that we should not have any government-enforced norms for minimum pay — what emerges is a truly pernicious and feudalistic vision: Everyone should be ashamed if they don't work, everyone should be ashamed if they get any income from the safety net, and employers should be free to pay their workers as cheaply as they feel like. This is as clear a recipe for wage slavery and worker exploitation as one could possibly imagine.
Given the popularity of the first two premises, it really shouldn't surprise anyone that around 60 percent of Americans rebel against the third premise. Rather, if there's a moral obligation to work, it seems there should be a mirroring moral obligation to pay a wage people can actually live on.
A few weeks ago, over at The Washington Post, Michael Strain tried to break out of this conceptual knot. "Society should have as a goal that no one who works full time and heads a household lives in poverty," he wrote. "But since this is a social goal, resources from all of society should be marshaled to meet it," not just the resources of employers.
On the face of it, this is an admirable sentiment, and one that resonates with many premises and concerns of the left. One such premise is that a fair portion of the wealth capitalism produces cannot be attributed to any individual merit, but is actually a kind of economic commons, produced by our collective cooperation. Another is that abuse and exploitation can and often do occur when economic desperation and a tattered social safety net leave people completely at the mercy of their employers for the income they need to make ends meet.
If Strain were a liberal Democrat arguing with his ideological co-travelers over whether increases in the minimum wage are really what we should be prioritizing, this would be a useful entry in the discussion. Unfortunately, Strain is a Republican who identifies with the reform conservative movement. And his party has made it abundantly clear it isn't interested in marshaling social resources to alleviate poverty by any avenue at all.
The aforementioned EITC, for example, is a tax credit that reduces your final tax liability by a certain amount. Crucially, it's also refundable. So if the EITC reduces your tax liability to zero, but there's some of the credit left over, you get the remainder as a check. It's essentially government spending, via the tax code, that adds a yearly bonus to low-income workers' paychecks.
Reform conservatives love the EITC because it boosts low-income wages without interfering with employers' pay decisions. Also, you can only get it if you have a job, so it can't discourage workforce participation. But because it is actually spending, it's been virtually impossible for them to bring any actual GOP votes to the table in favor of an EITC increase, outside of burn-the-village-to-save-it proposals that finance an EITC hike by cutting other welfare programs.
For what it's worth, the argument that the minimum wage does more harm than good rests on rather shaky empirical and theoretical grounds. (For well-balanced pro and con takes, go here and here.) Inequality in pay within firms is pretty high these days, as are corporate profits as a share of the economy, which suggests there's a lot of room in the business models of most companies to hike pay at the low end without sacrificing employment. A study of the Los Angeles policy specifically concluded the boost to the economy from putting more money in the pockets of poorer earners would noticeably outweigh any drag on employment. And a $15 minimum is really not all that high in the context of the city's local economy.
More importantly, there's a fairly good case to be made that the EITC and the minimum wage are compliments rather than competitors, with the strengths of each policy making up for the others' weaknesses. Several states have actually coordinated their own minimum wage laws and EITC policies in exactly this manner, and it wouldn't be hard to envision a similar bargain at the national level.
Unfortunately, that would require bringing partisans for the EITC and partisans for the minimum wage to the table, with both sides willing to compromise. Any legislative bargain by definition requires a quid-pro-quo in voting, which is exactly what the EITC partisans amongst reform conservatives and the GOP cannot provide. The constituencies for both policies reside within the Democrats, and the Obama administration has repeatedly proposed boosting the EITC to essentially zero conservative fanfare.
So reform conservatives are reduced to uselessly lamenting the popularity of minimum wage hikes, even though that popularity arguably results from the success of the conservative moral worldview.
There's a term for this sort of thing, and it isn't "helpful contributions to the discourse."
