No, Americans don’t support a $12 minimum wage
Author: Michael Saltsman
Publication Date: May 2015
Newspaper: The Hill
Topics: Minimum Wage
Today, Sen. Patty Murray (D-Wash.) and Rep. Robert Scott (D-Va.) will introduce legislation to raise the federal minimum wage by 66 percent to $12 an hour.
Their proposal has little economic rationale: The nonpartisan Congressional Budget Office already established last year that any poverty reductions from a $10.10 wage hike would come at the cost of a half-million jobs, and a $12 floor would just compound that damage.
Rather, proponents point to their own public opinion data suggesting that 75 percent of Americans support a minimum wage of over $12 an hour. If that sounds too good to be true, it’s because it is.
A new survey of over 1,000 Americans, conducted for my organization by ORC International, gauges support for a $12 minimum wage but is also honest with respondents about the consequences of the policy. Not surprisingly, baseline support for a $12 minimum wage plummets when the real-world consequences of the policy are explained.
For instance, when confronted with the empirical reality that a wage hike “would result in teenagers and low-skilled adults having more difficulty finding a job,” just 41 percent of respondents support the policy—rather than the 67 percent who supported it initially. A similar drop in support is observed when respondents are informed that a wage hike “is not an effective means of reducing poverty and assisting low-income families.”
Most important, though, are respondents’ reactions to the recent real-world consequences of a minimum wage similar to what Murray is now proposing.
Oakland, California raised its minimum wage to $12.25 on March 1. In and around the city’s Chinatown, at least 10 small businesses have been reported to close at least as a partial consequence of the wage hike. The city’s childcare facilities have also been particularly hard hit: Sterling’s Family Childcare and a Salvation Army childcare center have been forced to reduce employee hours and consider cutting some of its childcare slots, respectively.
Oakland is also bound by a quirk in California law where tips are not recognized as income earned on the job. (Despite the fact that the IRS disagrees with her, Murray wants to implement a similar policy nationwide.) In response, some of the city’s restaurants have eliminated tipping in favor of a menu surcharge, reducing take-home pay for servers. At one restaurant, Bocanova, employees who once earned up to $70 an hour with tips included now earn a flat hourly wage of $22 to $28. Sixty percent of the restaurant’s wait staff were reported to quit as a result.
When respondents were confronted with this real-world evidence in the ORC survey, support for a $12 mandate again took a hit: Just 41 percent supported it, and only 20 percent were willing to say they strongly supported it.
If survey respondents can think again when confronted with minimum wage consequences, policymakers who currently support a $12 minimum wage can surely do the same. The real solution to wage woes is already playing out in real-time, as market forces are pushing large employers like McDonald’s, Walmart, and Target to raise wages. Meanwhile, policies like the Earned Income Tax Credit (EITC) are supplementing the wages of employees who have greater needs.
If Congress wants to take action, improving that credit—for childless adults in particular—would be a good place to start. But legislators shouldn’t fool themselves into thinking they have the American public’s support to charge ahead with a harmful and ill-conceived minimum wage mandate.