Conservatives in Congress, and one imagines the White House as well, continue to fear the Minimum Wage Increase as if it were the Harbinger from Hell.
The beef seems to be that minimum wage hikes hurt small business, cause bankruptcies, lose jobs, and probably cause high cholesterol. But the whole objection is disingenuous, because it only looks at an immediate snapshot and ignores the long passage of time between wage hikes when businesses reap a huge dividend.
Now, Republicans have already made it clear that they favor businesses over the people, under the flawed "trickle-down" paradigm that says if you shower the top of society with money, enough will eventually make its way down to the lower classes that they'll get more money and then spend it to power the economy. I've argued before that showering the same money on the lower classes would cause the money to flow upwards far faster and with greater impact on the economy, making more business sense. But Republicans seem far less interested in what makes sense for the national economy, and far more interested in serving the immediate desires of the business community, which is a very different thing.
Their long-standing objection is that a minimum wage hike would hurt small businesses. Now, the term "small businesses," when used by Republican politicians, should make a lot of flags go up. It is used by right-wingers as an excuse to defend big businesses, the huge corporations and industries that really stand to have their interests damaged. It's a natural political maneuver; after all, one cannot garner much sympathy by saying that something will make a dent in the huge profits of giant corporations. No one would give a damn. So the small businessman is trotted out to say how he'll be devastated by whatever new proposal is being opposed. Or he'll be shoved in front of the cameras to talk about how this new tax cut for the rich will let him keep his business afloat, which would otherwise fall into bankruptcy.
It is a mistake to believe that small businesses are somehow the only ones paying minimum wage. I have a feeling that corporate giants have far more minimum-wage workers on their payrolls than all small businesses combined. And let's face it, small businesses do not have nearly as much political clout as the megacorps. I doubt that Republicans are so consistently worked up about people who won't make that much difference in the next election.
But let's take the view that size doesn't matter; let's take a look at the situation as a whole. The question being asked is, will the minimum wage hike hurt businesses? My own take on this is that the premise of the question is flawed.
Why? Because the question is being asked as if the only relevant time frame is the moment that businesses will have to hike wages. That'll cost a lot more, and that's where the hurt will come. However, that's only a fraction of the story, and ignores the whole reality. In order to see the big picture, one has to begin right after the last minimum wage hike, and look at what has been happening since then.
Now, this time period is often ignored because it is seen as unchanging. The federal minimum wage has been frozen over the past decade or so, and as a result, that period is considered as having a null effect on businesses.
The key missing element is inflation. Conservatives love to use inflation to play with the numbers. The common ploy is to simply ignore inflation--easy enough to do, as it is a slow process and most people don't really notice it. For example, in defending tax cuts for the rich and the trickle-down philosophy, Rush Limbaugh argued that despite tax cuts under Reagan, federal revenue doubled in the 80's. That "doubling," however, was chiefly due to inflation, not brilliant economic policy. Factor inflation into the equation, and the results are far less impressive. (The rest of that lie is covered here.)
The minimum wage is no different. Conservatives focus only on the immediate effects of a minimum wage hike, and they completely ignore the fact that from the moment after the wage hike starts, inflation starts cutting down that wage, giving businesses a slow but constant form of economic relief.
We hear all about how businesses will have to fork over more money now. We hear nothing about how businesses have had to fork over less and less and less over the past decade. It is as if businesses never enjoy that constant windfall.
It is even more ironic when one considers the plain fact that inflation is simply another way of expressing the idea that businesses are raising their prices. Businesses that pay the minimum wage raise prices but do not share the increased revenue with minimum-wage workers.
That is, they don't until such a thing is mandated by the government. In the form of a minimum wage hike. In the end, it evens out. Which is why minimum wage hikes never really hurt businesses--unless you want to take the view that businesses are hurt because they can't cut the wages of their workers to even further below the poverty line.
One thing that never makes sense about the minimum wage is that it is not keyed to inflation. At the very least, it should be. I believe that the minimum wage should be set to a level where a single person working 60 hours a week could feed, clothe, and house a family of four, and have the option of setting aside an additional small amount in savings--and then that wage level be permanently tied to the inflation rate, with gross adjustments every year. Maybe every ten years or so, the wage could be reviewed in case other factors challenge the standard of living, and adjustments made for that.
This policy would not only be civil, humane, and fair, but it would also do away with those horrible, immediate wage hikes that Republicans fear and loathe so terribly much. Because of how they just devastate small businesses.
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This post is a version of my blog post for today in The Blog from Another Dimension.