Ralph Nader Misses the Mark on the Minimum Wage

Recently, Ralph Nader penned an op-ed for the Wall Street Journal arguing for a higher minimum wage. Nader’s faulty economic principles were exposed in a series of letters to the editor published afterward, in addition to having already been refuted in earlier op-eds and editorials in the paper.

But Nader wasn’t just wrong on the principles—he made some serious factual errors as well.

  • For instance, Nader claimed that “two-thirds of low-wage workers are employed not by small businesses but by large, multinational and highly profitable corporations…” Try again: The report he’s citing actually says that two-thirds of lower-wage workers are at businesses with more than 100 employees—not “large, multinational, and highly profitable corporations.” A business with 100 employees is often nothing more than a local restaurant franchisee or a regional grocery chain with a handful of locations.
  • Nader also claims that “Andy Shallal, owner of the successful Busboys and Poets restaurant chain, starts his workers at $10.25 per hour.” Again, another false statement. In fact, Shallal admitted in the Baltimore Business Journal that his tipped employees start at $3.63 per hour—the state tipped wage in Maryland. Of course, like at any restaurant with tipped employees, tipped income is higher with tips—in fact, an average wage that exceeds $13 per hour. But that means Shallal is no different than the large restaurant businesses that activists hold out for scorn.

Of course, Nader’s greatest fault is his ideological support for a higher minimum wage. The economic consensus is clear on the wisdom of this policy: 85 percent of the most credible economic research from the last two decades points to job loss following a wage hike, as opposed to economic stimulus or job creation.

Nader may be a passionate consumer advocate, but he should leave the economics to those who understand supply and demand.