Even in the current era of alternative facts there are few issues that so enthusiastically peddle in fiction more than the impact of raising the minimum wage. Opponents of minimum wage increases should really ask for an advance on their works of fiction.
In states across the country where this debate has raged, business trade groups read from a common playbook. They insist that the “sky is falling” — they threaten that layoffs and higher costs to consumers are certain if businesses are forced to pay their workers a livable wage.
But in the cities where minimum wage increases have recently taken effect, those predictions have proven to be wrong.
In fact, in six states that raised the minimum wage this year, workers have held on to their jobs and have put an extra $1.4 billion in their pockets. These extra dollars will increase their spending power, fill tax coffers, boost local economies, and reduce dependence on government services.
But, even though all the evidence says otherwise, the baseless warnings keep on coming.
Just this week there was a whole lot of nothing about a flawed (and enthusiastically misrepresented) study out of the University of Washington that looked at whether the city’s minimum wage increase hurt workers through reduced hours. But experts raised serious questions about the study (via @noamscheiber and this by @BenSpielberg), emphasizing that a booming economy with a strong labor market — not the minimum wage increase as the more likely culprit. In a booming economy, higher-paying jobs replace lower-paying jobs, thus lowering the total number of hours worked for lower-wages. Opponents of minimum wage increases love to isolate this one variable, but that’s simply not how it works.
Another example comes from San Diego, which in January raised its minimum wage from $10 to $11.50, ahead of a statewide increase.
A local columnist (not a journalist) has written two recent pieces on the city’s wage increase that rehashes the worn talking-points and goes so far as to raise some new ones. The first, “San Diego’s new minimum wage already may be killing jobs,” argues that raising the wage could bring pink slips, before admitting that San Diego’s economy is still strong and it’s too soon to tell. Extensive research on the issue has found that the minimum wage has little to no effect on jobs.
The second article, from earlier this month, “Is San Diego’s new minimum wage already hurting its poor?” makes an even more dubious argument that increased wages are driving up other costs like rents, thus nullifying — the anti-increasing-wages warriors claim — the positive effect of higher earnings.
The writer makes his case by profiling a single minimum wage worker who has seen his rent go up 47% over the past several years. The minimum wage just went up just six months ago. What the writer doesn’t mention is that during this same time period, San Diego has had one of the hottest real estate markets in the country and prices are skyrocketing across the area. The economics at play here are real estate supply and demand in action. There is no proven link between wages and housing costs. In the last month fidget spinners have also gone up in cost, but those too, are independent of the minimum wage — they are just popular.
What’s more, a study from University of California-Berkley’s Institute for Research and Labor Employment found that a 10% increase in the minimum wage leads to only a 0.6% increase in prices.
The lesson? We cannot escape “fake news,” but when it comes to people’s wages we must, must, must insist that opinions not masquerade as facts.
When ideological writers put forward these theories — even those that can be easily debunked — it provides more ammunition to those who would suppress wages and place more obstacles on the path to the middle class. And once they make their way into the anti-worker spin machine, they take on a life of their own no matter what the truth is. So, it won’t be long now until the positively absurd link between small wage hikes and large rent increases become a staple of anti-minimum wage talking points. That’s the bad news.
We are fighting back against this phony propaganda and if the November 2016 election is a gauge, we are winning. Voters in four states overwhelmingly blew past the alternative facts crowd and voted for ballot initiatives in four states, and would have done so in two more places had politicians not seen the handwriting on the wall and voted higher wages into law before they appeared on the ballot.
Voters — not politicians nor professional pundits — know what is best for themselves and their neighbors: a day’s work deserves good wages. It’s simple and true.
So here’s the good news: As it turns out, when put side-by-side, facts are stronger than fiction.