Democrats Can’t Accept the Trade Off of a Job-Killing Minimum Wage

Each side cherry picks facts, but the latest offender is the White House that won’t accept an estimate that its $10.10 proposal would cost jobs.








So when the CBO comes out and says the an increase in the minimum wage will lift some out of poverty, but destroy jobs for others, it is depressingly comical to see the job destruction claim dismissed out of hand by Democrats, as if CBO is only ever worthy of the Nonpartisan Arbiter of Absolute Truth treatment when its reports good news for the White House. Anything acknowledgment of potential downsides to a policy must be rebutted fiercely. It seems impossible today to acknowledge the other side might have a point, that in all things there are trade-offs and that we’re better off acknowledging the real winners and losers of a given policy direction.

An increase in the minimum wage is likely to mean some jobs go away. Bill Gates gave an interview on Morning Joe where he made an argument for why that might be the case: a minimum wage increase would likely encourage “labor substitution” and the automation of tasks to reduce demand for human labor. There are probably some jobs right now where it makes sense to pay someone $7.25 an hour but where it might not make sense to pay someone $10.10 an hour. Those jobs may go away.

Democrats in the last few weeks have touted polls showing that huge majorities of Americans support raising the minimum wage. But when the question notes that there are tradeoffs, that the minimum wage increase might cost some jobs, that support falls dramatically. Absent any downside, a minimum wage increase sounds fine. Given the tradeoffs, the hike seems much less attractive.

Republicans have raised the minimum wage before, with then-President George W. Bush putting his signature on the bill that raised the federal minimum wage up to $7.25. Seven years later, America’s labor market is in a far different place. That the White House has chosen economic inequality as its top priority at a time when our biggest problem is the heartbreaking number of long-term unemployed and still-tepid economic growth is puzzling, at best.

If their policy is as good as they claim it is, they ought to be able to argue that the downside of the lost jobs are outweighed by the benefits to those taking home more pay. But that’s not what the White House wants to do, because they know that’s not a debate they’d easily win.