There's No Conservative Case for Hiking the Minimum Wage

Words mean things—and that’s just one of the flaws in Pedro L. Gonzalez’s latest piece in Newsweek, titled “The Conservative Case for a $15 Minimum Wage.”

There’s nothing conservative about the class envy Gonzalez leans so heavily upon. Nor is there anything conservative about his reliance on the left-leaning, union-friendly Economic Policy Institute to downplay the negative effects of an artificial increase in the minimum wage. Finally, it’s simply bizarre to claim that using the power of government to force specific economic outcomes is in any way “conservative.”

Let’s start with the clear (and undisputed) facts. Raising the minimum wage—especially now, in the midst of a government-induced economic slowdown—would devastate small businesses. It would hurt those it is intended to help the most, by eliminating jobs, reducing the hours of those who still have them, and by cutting off the lowest rungs of the ladder to success. (When I say “undisputed,” I mean it—the real question for most economists is whether the tradeoffs are worth it.)
We’ve already seen the devastation that government action can cause during the pandemic, as the broad U6 unemployment rate remains at an elevated 11.1% and almost 800,000 people are filing initial jobless claims every week.

Yet Gonzalez brushes these economic realities aside and begins with exactly the kind of argument you might expect from U.S. Sen. Bernie Sanders—a Democratic Socialist, and the furthest thing from a conservative you’ll find in the Senate. It’s class envy—the “CEOs make more than you” argument.

“This is,” he writes, “… the consequence of policies that intentionally greased the wheels of greed.”

It’s workers versus the bosses in Gonzalez’s mind.

“Lawmakers and lobbyists have deliberately guided the ‘Invisible Hand’ to pad the pockets of the very few at the expense of the many,” he writes. “The former receive acclaim as captains of industry while the latter subsidize their bailouts and are told to bootstrap themselves.”

He’s not completely wrong there; but that’s not an argument against free markets. Rather, it’s a damning indictment of the kind of government intervention Gonzalez is calling for. The bailouts are the problem, not the bootstraps.

And that brings us to the second point. For EPI—and by extension, for Gonzalez—the rigged economy shouldn’t be fixed, just re-rigged, with the labor movement as the primary beneficiary. According to its website, EPI believes “A strong, effective labor movement is essential for democracy and to ensure an equitable sharing of income and wealth,” and “Economic policy should focus on improving conditions for working people.”

Yet the tired labor vs. management dichotomy misses what is truly the heart and soul of the U.S. economy—small businesses. Tens of millions of Americans are both, workers and managers. They don’t merely own the means of production, they are the means of production.

Yet millions of those small businesses--nearly a third, in fact—have either closed because of the government-ordered shutdowns or fear they will soon be forced to. A minimum wage increase, advocated by Gonzalez and EPI, would shutter many, many more of them.

This is quite literally government picking winners and losers—something incompatible with conservatism. So is the one-size-fits-all, top-down approach. And that’s my third point: This is in no way a conservative policy position.

The fact is that one size never fits all. That’s especially true with the minimum wage. We know that 58.5% of Americans earning the minimum wage are between 16 to 24 years old. And we know that costs of living vary greatly across states, with California being 50% more expensive than Texas.

There simply is no “conservative case” for a minimum wage increase. Yet a closer look at American Greatness, the website where Pedro Gonzalez serves as assistant editor, seems to indicate that it’s less interested in conservative ideas than in redefining the word.

Look, we know what works. The Trump economy focused on freeing Americans to pursue their own dreams. In February 2020—before the pandemic and the government shutdowns—the U.S. unemployment rate was 3.5% (well below what most economists consider full employment). The rate for the nation in January 2021 was 6.3% after many have dropped out of the labor force.
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What we need is a clear path to economic recovery—a recovery based on letting people prosper. And that’s what we at TPPF have outlined in our Responsible Recovery Agenda that’s meant for Texas but is applicable to other states and even D.C. It’s conservative—in the real meaning of the word.

https://www.texaspolicy.com/theres-no-conservative-case-for-hiking-the-minimum-wage/