Monday, February 18, 2013

Raising the minimum wage makes sense

Posted By on Mon, Feb 18, 2013 at 6:20 AM

The Arkansas minimum wage is $6.25 an hour. A full-time worker can gross $250 a week ($13,000 a year with no vacations) at that rate. That's plenty, according to the likes of Rep. Debra Hobbs, who once said if her cleaning lady would just work a few more hours, she could afford to buy her own health insurance and not look for government to pay for her shiftless self.

(Forget for the purposes of this discussion that Rep. Hobbs can qualify for a taxpayer payment of more than $10,300 a year for solid gold family health insurance coverage.)

A proposal pends to raise the Arkansas minimum wage. Nationally, President Obama has called for raising the federal minimum wage from the current $7.25 to $9. Paul Krugman makes the case for the increase today and answers those who says it's bad for business.

Fairness is a good place to start. Adjusted for inflation, the current minimum wage is lower than it was in the 1960s. But wouldn't it harm business?

... there’s evidence on that question — lots and lots of evidence, because the minimum wage is one of the most studied issues in all of economics. U.S. experience, it turns out, offers many “natural experiments” here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect of minimum wage increases on employment. [Think Arkansas. We've always trailed most of the country in our own minimum wage. Look around you at the prosperity that's produced. Think Right to Work Law, too. Think crummy workers compensation. Etc.]

Why is this true? That’s a subject of continuing research, but one theme in all the explanations is that workers aren’t bushels of wheat or even Manhattan apartments; they’re human beings, and the human relationships involved in hiring and firing are inevitably more complex than markets for mere commodities. And one byproduct of this human complexity seems to be that modest increases in wages for the least-paid don’t necessarily reduce the number of jobs.

What this means, in turn, is that the main effect of a rise in minimum wages is a rise in the incomes of hard-working but low-paid Americans — which is, of course, what we’re trying to accomplish.

Finally, it’s important to understand how the minimum wage interacts with other policies aimed at helping lower-paid workers, in particular the earned-income tax credit, which helps low-income families who help themselves. The tax credit — which has traditionally had bipartisan support, although that may be ending — is also good policy. But it has a well-known defect: Some of its benefits end up flowing not to workers but to employers, in the form of lower wages. And guess what? An increase in the minimum wage helps correct this defect. It turns out that the tax credit and the minimum wage aren’t competing policies, they’re complementary policies that work best in tandem.

Tags: ,

From the ArkTimes store

Favorite

Speaking of Minimum Wage, Economy

Comments (27)

Showing 1-27 of 27

Add a comment

 
Subscribe to this thread:
Showing 1-27 of 27

Add a comment

More by Max Brantley

  • Executionpalooza

    Appearances count. I was struck by a single sentence over the weekend in a full page of coverage in The New York Times devoted to the killing spree in Arkansas, beginning with a front-page account of the recent flurry of legal filings on pending executions and continuing inside with an interview with Damien Echols, the former death row inmate.
    • Apr 20, 2017
  • Death Row inmates argue to keep stay of execution in place; urge 8th Circuit not to 'rush' analysis

    Early this morning, attorneys for nine Death Row inmates, filed an argument with the 8th United States Court of Appeals contesting the state's effort to override Judge Kristine Baker's order Saturday that halted executions scheduled this month.
    • Apr 17, 2017
  • Federal judge denies execution stay for Don Davis but larger stay continues

    Don Davis, who's been moved to the killing facility of the state prison for killing tonight at 7 p.m. if a stay of execution is lifted in another federal suit, sought a stay in another federal court Sunday, but the request was denied.
    • Apr 17, 2017
  • More »

Readers also liked…

  • The plight of the refugees: Dark episodes in Arkansas

    Ernest Dumas reaches into history, some personal, for moments in Arkansas's view of refugees. It was brought to mind by the current crisis in Europe and the political divisions over whether the U.S. should respond to the needs of the displaced.
    • Sep 22, 2015
  • UPDATE: Judge rethinking punishment for attorneys in insurance settlement case

    Judge P.K. Holmes is rethinking whether lawyers deserve punishment in a class action lawsuit against an insurance company abruptly pulled from his court after pending more than a year and then quickly settled in a state court.
    • Jun 24, 2016
  • From Dallas, creative thinking about the Interstate 30 project

    An urban planner in Dallas says freeways are not always the answer. Incorporating some creativity already being used in Dallas and looking at the Interstate 30 project from a broader perspective, here are ideas that Arkansas highway planners have not considered. But should.
    • Nov 6, 2015

Most Shared

  • Executionpalooza

    Appearances count. I was struck by a single sentence over the weekend in a full page of coverage in The New York Times devoted to the killing spree in Arkansas, beginning with a front-page account of the recent flurry of legal filings on pending executions and continuing inside with an interview with Damien Echols, the former death row inmate.
  • Art bull

    "God, I hate art," my late friend The Doctor used to say.
  • Not justice

    The strongest, most enduring calls for the death penalty come from those who feel deeply the moral righteousness of "eye-for-an-eye" justice, or retribution. From the depths of pain and the heights of moral offense comes the cry, "The suffering you cause is the suffering you shall receive!" From the true moral insight that punishment should fit the crime, cool logic concludes, "Killers should be killed." Yet I say: retribution yes; death penalty no.
  • Judge Griffen writes about morality, Christian values and executions

    Pulaski County Circuit Judge Wendell Griffen, who blogs at Justice is a verb!, sends along a new post this morning.
  • The Ledell Lee execution thread

    Arkansas Times contributor Jacob Rosenberg is at the Cummins Unit in Grady filing dispatches tonight in advance of the expected execution of Ledell Lee, who was sentenced to death for the Feb. 9, 1993, murder of Debra Reese, 26, who was beaten to death in the bedroom of her home in Jacksonville.

Visit Arkansas

Haralson, Smith named to Arkansas Tourism Hall of Fame

Haralson, Smith named to Arkansas Tourism Hall of Fame

Chuck Haralson and Ken Smith were inducted into the Arkansas Tourism Hall of Fame during the 43rd annual Governor’s Conference on Tourism

Most Viewed

Most Recent Comments

  • Re: The sunny Sunday line

    • Trump is willing to shut down the government if he doesn't get funding for his…

    • on April 23, 2017
  • Re: The sunny Sunday line

    • STEPHEN SMITH THIS DATE IN ARKANSAS HISTORY 23-Apr 1912 Congressman Robert B. Macon of Helena…

    • on April 23, 2017
  • Re: The sunny Sunday line

    • My dear (and I mean that) Norma, do not over-imagine our attention span. There is…

    • on April 23, 2017

Blogroll

Slideshows

 

© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation