Columns » Warwick Sabin

Wage war

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The scene was a darkened movie theater on a recent Friday night. Everything started out friendly and casual, but soon it got pretty hot and heavy.

Before you get too excited, it wasn’t a date. I had agreed to debate Arkansas News Bureau columnist David Sanders for the new “Live at Riverdale” event series.

Incredibly, people actually showed up to watch. The room was about half-filled with 20- and 30-somethings who got more participatory as the evening progressed. (The beer might have loosened them up.)

That didn’t help me much, since the Republicans outnumbered the Democrats and were far more vocal.

We started by discussing the minimum wage initiative that will likely be on the ballot in Arkansas this year, and I opened with two points. First, I said that even though the proposal is about raising the minimum wage by one dollar an hour (from $5.15 to $6.15) and adjusting it annually to correspond with cost-of-living fluctuations, it really hinges on whether voters believe in the concept of the minimum wage.

That is, if you think there should be a minimum wage to guarantee a basic standard of living for those who earn it, you should feel compelled to increase it, because the current minimum wage is becoming meaningless. It’s been eight years since it was last increased, and at the current rate it would result in an annual salary of $10,712 for a full-time worker, well below the poverty line of $16,090 for a family of three.

Knowing that, I said, the second point is a moral one. What value do we put on work in this society? If a man or woman can put in a full day’s work five days a week and still not earn enough to house, feed and clothe a family (much less pay the heating bill or cover the cost of medicine), how can we genuinely claim that our country rewards the responsible, hard-working citizen? And when a parent has to work more than one job to make ends meet, thereby spending less time with his or her children, how are we promoting true family values?

I was immediately treated to a basic economics lesson, provided free of charge by Sanders and several members of the audience. If labor costs increase, that means fewer jobs, because businesses will have less money to go around. Plus those higher wages will be passed along to the consumer in the form of higher prices. And most people earning the minimum wage are teenagers or part-time workers anyway.

That all sounds logical, but not a bit of it is proven. A fair analysis of the exhaustive surveys on the subject shows that previous increases in the minimum wage have neither helped nor hurt businesses. Did the U.S. economy suffer after the federal minimum wage was last raised, in 1997? People earning the minimum wage will put the extra cash right back into the economy, because they are spending everything they make just to get by.

And they number about 127,000 strong in Arkansas, with 80 percent over age 20 and 53 percent working full-time. That made it somewhat distressing to read Attorney General Mike Beebe’s comments on the subject as reported by the Arkansas State University student newspaper, the Herald.

“The raise would primarily affect students, part-time workers and the restaurant industry,” Beebe said. Then he agreed with a student who said raising the minimum wage might increase the cost of living in Arkansas.

But the cost of living increases every year for a variety of reasons, and minimum wage earners can’t keep up with it. Besides, other states that passed similar measures actually saw growth in the business sectors that employ minimum wage workers. While that doesn’t mean one leads to the other, it certainly means the wage increase doesn’t have the negative effects its opponents like to use to scare people.

The C.E.O. of Wal-Mart, Lee Scott, understands this, which is why he called for the U.S. Congress to increase the minimum wage. And just last week, the new Federal Reserve chairman, Ben Bernanke (a Bush-appointed conservative), told a U.S. House committee that he thinks minimum wage increases do not lower employment.

Some people have wondered if the minimum wage initiative could do for Arkansas Democrats what the 2004 proposal to ban gay marriage did for the Republicans. That is, associate the party with an overwhelmingly popular issue, mobilize turnout among the party’s base and thereby contribute to victories across the ballot.

Has anyone mentioned this to Beebe?


Speaking of David Sanders, he and I begin a new public affairs program called “Unconventional Wisdom” on AETN this Fri., Feb. 24 at 6:30 p.m. We will review current issues, debate them and invite guests to discuss them. The first show will focus on Election Year 2006.

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