When wage hike proponents stifle debate, public policy suffers
Author: Michael Saltsman
Publication Date: May 2015
Topics: Minimum Wage
When advocacy groups or politicians try to silence one side of a public policy debate, it’s a good indicator that the facts aren’t on their side.
Consider Tara Murtha of the liberal Women’s Law Project, who complained in a recent NewsWorks commentary (“There’s no real ‘debate’ about the benefit of raising the minimum wage“) that Pennsylvania’s news outlets failed to present a uniformly positive point of view on raising the minimum wage. “Not every story is a ‘debate,'” she lectured, and suggested that reporters who act otherwise are providing “a megaphone for corporate interests.”
Murtha is not a disinterested party: Her organization testified in favor of a wage hike in Pennsylvania, and she has a vested interest in shutting down opponents who believe her viewpoint is less than credible. Still, her contention that one side of the minimum wage debate isn’t even worth publicizing deserves close scrutiny.
My organization, the Employment Policies Institute, is critical of raising the minimum wage. Specifically, we’re concerned that new wage mandates can force low-margin employers (e.g., restaurants or grocery stores) to scale back on job opportunities if they can’t offset new wage costs through higher prices. This observation is not a “talking point” — it’s an empirical fact. Economists from the University of California-Irvine and the Federal Reserve Board, who reviewed two decades of the best studies on his subject published since the early 1990s, found that 85 percent of those studies pointed to job loss following a wage hike.
This consensus continues to grow stronger. Last year, the nonpartisan Congressional Budget Office reviewed 60 different studies on the minimum wage and concluded that a $10.10 wage floor enacted nationwide would cost the economy a half-million jobs. The analysis EPI released in Pennsylvania, authored by two economists from Miami University and Trinity University, relied on the CBO’s methodology to estimate that Pennsylvania would lose over 30,000 jobs from a $10.10 minimum wage.
Murtha is certainly familiar with the CBO. She used to be a frequent contributor to a website called RH Reality Check, whose writers cite the CBO and its analyses as a “non-partisan” resource — often in support of their own point of view. For instance, when the GOP-controlled House of Representatives passed an abortion bill opposed by RH Reality Check, one of its writers cited the CBO’s estimates that the bill “could add as much as $400 million to the deficit.”
There’s an old saying that applies here: If it’s good for the goose, it’s good for the gander. If legislators and journalists need to hear the CBO’s perspective on the budgetary impact of an abortion bill, then they certainly need to hear its perspective on the economic impact of a minimum wage bill. Murtha may not like the CBO’s conclusions on the minimum wage, but she can hardly dismiss them as “talking points” — unless, of course, she’s just another advocate trying to stifle debate.
Murtha also repeatedly references EPI’s support from the business community — and it’s true: EPI does receive some of its support from businesses. In fact, we disclosed this in the press release announcing the results of our Pennsylvania analysis. Unfortunately, that’s a level of transparency that Murtha herself doesn’t practice. For instance, in her NewsWorks commentary, she positively cites minimum wage analyses from the Economic Policy Institute and the Keystone Research Center, without bothering to mention that they’re supported by some of the same labor unions advocating for a higher minimum wage.
That’s a conflict of interest for the Economic Policy Institute and the Keystone Research Center, if they are as non-partisan as Murtha wants us to believe. And it’s a failure on Murtha’s part to “adequately identify the organization” (to use her own phrase).
Both proponents and opponents of a higher minimum wage in Pennsylvania surely support the same goal of reducing poverty and hardship among the state’s lowest paid employees. But there’s a serious academic debate about whether a higher minimum wage is the best method to achieve that. Because the conclusions of the labor union-backed Keystone Research Center are at odds with both the anecdotal and empirical research on minimum wages, it’s essential for policymakers and journalists to weigh the evidence on both sides of this debate — even if it makes advocates like Murtha uncomfortable.