Even Proponents Agree: Wage Hikes Cause Job Loss

Erica Payne is the President of an organization called Patriotic Millionaires, which made a name for itself during the lame duck session of Congress in 2010 when they demanded higher taxes for America’s wealthy, themselves included.

More recently, the millionaires have taken to supporting a higher minimum wage as a means of battling economic inequality. In a recent opinion piece defending this position, Payne made the following argument:

“Some will temporarily lack for work, which is unfortunate. But overall, the positives greatly outweigh the negatives.”

It’s the classic “you have to break some eggs to make an omelet” rationale that allows proponents to sweep any negative evidence under the rug by claiming a higher wage will be better for society as a whole.

This justification has been used early and often in the minimum wage debate. In 2001, economists Peter Hall and Michael Reich of UC Berkeley University made a similar argument in their report “A Small Raise for the Bottom” when they claimed:

“On the negative side [of a higher wage mandate], some employment growth might be curtailed among the youngest minimum wage workers. Since employment to population rates among those under 18 are already quite high by historical standards, some decline might be acceptable and well worth the overall benefits.”

More recently, this argument was used to justify the closure of a New York restaurant, Medici House, due to New York’s increase to the tipped wage last year. Sam Magavern, the Co-Director of the Partnership for the Public Good, stated:

“I’m sure individually, there will be restaurants that might close, but big-picture, the restaurant sector does seem to be able to absorb higher wages for its workers,”

By taking the utilitarian approach, knowingly signing away thousands of jobs for hardworking Americans or turning your back on the country’s youth and mom-and-pop restaurants is permissible if you do it in the name of the greater good. But even if you buy this twisted rationale, the majority of evidence suggests that a higher wage fails here too.

A recent study conducted by Dr. Joseph Sabia and Thanh Tam Nguyen of San Diego State University  examined 35 years of government data across a number of different datasets and determined that, on net, minimum wage increases have little to no net effect on participation in welfare programs.

Perhaps Payne should stop trying to justify her actions by attacking conservatives and face the facts: In addition to killing jobs, the minimum wage has proven to be an ineffective means of eliminating poverty and often harms those that it intends to help.