League vs. Mackinac Center on the minimum wage

Added February 12th, 2014 by Yannet Lathrop | Email This Entry Email This Entry
Yannet Lathrop

Recently, I’ve had two opportunities to debate the Mackinac Center on the minimum wage. The events took place at the Hauenstein Center of Grand Valley State University and on a public affairs show on WGVU, the public station at Grand Valley.

The minimum wage has been on the minds of many lately – particularly after fast-food workers held rallies and called for an increase to $15 per hour, and a ballot campaign formally launched last month.

On one side of the debate are those who understand that $7.40 is too low – at this wage, full-time work is just $15,400 annually. On the other side are those who are opposed to increasing or even having a minimum wage at all.

During the debates, I argued in favor of raising the minimum wage and indexing it to inflation – a measure that would benefit 1 million Michigan workers. My debate opponent proposed abolishing the minimum wage.

The debates touched on several points, including:

  • Are minimum wage earners teens or adults? Opponents of the minimum wage argue that this wage is mostly earned by teenagers, and therefore not a pressing policy issue. However, evidence suggests the contrary. In Michigan, 87% of workers who earn at, or just above the minimum wage, are at least 20 years old.  (Nationally, their average age is 35). Further, 20% of these workers are parents raising 15% of Michigan’s children. The changing demographics of low-wage workers suggest that this is an economic issue that we must confront now, so we’re not asking low-wage adults to live in poverty, or parents to turn to public assistance to support their children.
  •  Would an increase hurt jobs and the economy? My debate opponent referred to studies claiming that job losses are an inevitable result of raising the wage floor. However, more recent studies show that neither job losses nor gains should be expected in significant numbers. Nonetheless, if Michigan increased its minimum wage to $10.10, the state could see a small boost in employment – 3,300 full-time jobs – and an increase in economic activity – $886 million. These modest improvements make sense when we consider that, when low-wage workers have a little more money in their pockets, they tend to spend it right away (mostly at local businesses) to purchase basic necessities. Over time, increased spending leads to a higher demand for workers to staff local businesses or create more of the products being consumed.
  •  Would increasing the minimum wage hurt small businesses? My opponent argued that Walmart supports an increase because this would eliminate its small business competitors. While it is true that nearly a decade ago, Walmart “urged” Congress to increase the minimum wage, it did so while hiring anti-minimum wage lobbyists. My opponent also failed to mention that, rather than being concerned, small business owners support an increase and many already pay their employees a wage higher than the minimum.

We need an economy that works for everyone, including our lowest-paid workers. Increasing the minimum wage, so that hard work is fairly compensated, is a first step to building such a fair economy. For more information, see the League’s fact sheet and report on raising the minimum wage.

— Yannet Lathrop

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