• Minimum wage debates distract from what would actually help the working poor

    An absolutely extraordinary amount of political and media attention is given to minimum wage debates. Every day, dozens of new stories and blog posts appear about minimum wage proposals in states, cities and in Congress.

    Of course, the issue never goes away because once a minimum wage is hiked, advocates begin seeking the next increase. It also stays in the forefront because it polls so well – the public consistently supports minimum wage hikes – so can you really blame politicians and Big Labor from talking about it all the time?

    There is, however, one exception: when people learn that the minimum wage kills jobs, the support plummets to a more even partisan split. The media deals with this by almost never conducting a poll that addresses job loss. Media problem solved!

    But all this attention on a measure that kills jobs while only helping a couple percent of workers, has significant negative effects. Foremost among them, it crowds out most discussion of measures that would actually help the working poor and the unemployed.

    Here are just a few policies that are dramatically more beneficial to the working poor and the unemployed than job-killing minimum wake hikes:

    * Promote faster economic growth. The US economy has not grown at an annual rate of 3% or more since 2005. This is pathetic, and it means millions of new jobs were not created over the last decade due to our weak growth rate. US policy should be to have our private sector economy grow by at least 4% annually. To do this would require increasing US energy production, reducing anti-growth tax and regulatory policies, chilling out the EPA’s war on job creators, slowing government deficit and welfare spending, etc. Private sector economic growth is one of the most important ways to solve a nation’s most pressing problems. That’s why the rulers in China get crazy if economic growth there starts heading as low as 7%. (Yes, you heard that right. China demands more than 7% growth a year; US politicians have delivered <3% every year since 2005.) End the war on economic growth and jobs will be created and wages will rise. No government-mandated wage hikes needed. * Control immigration to our country just like every other nation on earth already does. The United States is the only nation in the world that currently has a governmental policy of open borders: anyone who sneaks into this country or overstays a tourist visa is permitted to take a job and stay here forever, including receiving many taxpayer handouts from day one. This is highly destructive to American citizens who are unemployed, underemployed or receiving the current minimum wage. But yes, employers love it, because a surplus of workers kills worker leverage for wage increases, and Democrat politicians love it because they need to import new poor people to ensure future voters dependent on government. It’s America’s working poor and unemployed who pay the price for this policy.

    * Expand the Earned Income Tax Credit. This one is more controversial, but many people believe it is preferable to expand government payments that reward work, rather than just give more welfare to those who are not working. At least the EITC goes to those actually working. But it remains a policy of taking from some Americans to hand over to other Americans. We are listing it here to encourage debate; this is not an endorsement. (Note: there are high levels of fraud in the EITC program.)

    * Improve our schools. Breaking the government-union monopoly on K-12 education will allow children in bad schools to escape them, so they will be ready to compete for jobs in the world economy of the 21st century. We also have to slow the outrageous price hikes imposed by colleges annually, and expand low-cost online teaching, to make post-high school learning easier to access for low-income Americans.

    * Encourage entrepreneurialism, and encourage work over idleness. Our cradle to grave welfare state, high marginal tax rates and ever-increasing regulations are slowing down business creation to dangerously low levels. As you make it harder or less worthwhile to create new businesses – surprise! – you get fewer new jobs created.

    To increase wages takes lots of jobs, and competition among employers for workers. The fracking/shale revolution in North Dakota, for instance, created so many energy jobs that the state had the lowest unemployment rate in the nation as of late 2014, and even entry level retail and fast food jobs were paying several dollars above minimum wage and often included $300 signing bonuses. Yes: signing bonuses for fast food jobs! That’s what happens from economic growth and a limited supply of workers.

    Why won’t politicians apply the lessons of North Dakota to the rest of the country?

    The minimum wage hike obsession is a job-killing distraction that keeps us from policies that would actually help the working poor and unemployed. The next time a politician tells you he or she supports a minimum wage hike, ask yourself if they are not part of the problem.