The conservative case for raising the minimum wage

Fast food workers strike at McDonald's in Chicago. Photo by Steve Rhodes.
Fast food workers strike at McDonald’s in Chicago. Photo by Steve Rhodes.

For many working Oklahomans, low-wage jobs aren’t paying enough to support themselves and their families without public assistance. Raising the minimum wage would boost the overall economy while properly shifting the responsibility for ensuring family economic security back towards the private sector and away from government and taxpayers.

Oklahoma is a state with a high concentration of low-wage jobs. Nearly one of every three jobs in Oklahoma (31.9 percent) is in an occupation where the median annual pay is below the federal poverty threshold for a family of four, the fifth highest prevalence among the states. Of this low-wage population, some 60,000 workers earned the minimum wage of $7.25 an hour in 2013, according to the Bureau of Labor Statistics. Between 2008 and 2012, some 67,000 Oklahomans worked full-time year round yet earned less than $15,000 for the year, four-fifths of whom were supporting or helping to support an entire household with their wages. 

The federal minimum wage, which applies in Oklahoma, has been stuck at $7.25 per hour for the past five years, and has been eroding in value for even longer, falling by 30 percent in real (inflation-adjusted) terms since 1979.  That’s left a growing number of working families struggling to afford their basics needs. It has also left more of the burden for supporting families to government programs, which are collectively subsidizing the low wages paid by many employers. According to a study by Americans for Tax Fairness reported by Forbes Magazine, Walmart’s low-wage workers alone cost U.S. taxpayers an estimated $6.2 billion in public assistance, including food stamps, Medicaid and subsidized housing.

President Barack Obama has campaigned to raise the minimum wage to $10.10 per hour, but has encountered fierce opposition. Republicans and the business community generally contend that a higher minimum wage would raise costs and kill jobs. But a growing number of business leaders and conservatives are rallying in support of a higher minimum wage, arguing that businesses, not government, should ensure that workers have enough to get by.

In California, a recent push to raise the state minimum wage to $12 per hour, which would be the nation’s highest, was led by Ron Unz, a wealthy Silicon Valley businessman. Unz gained prominence in the 1990s by leading a ballot initiative that largely eliminated bilingual education in California. He then became publisher of the American Conservative, a libertarian-leaning magazine. This year, he tried unsuccessfully to gather enough signatures to place the $12 minimum wage on the ballot.

Unz makes several arguments in favor of a higher minimum wage. He argues that it would help restore a thriving middle-class that has been essential to American prosperity over the past century, as well as dampen pressure to hire undocumented immigrants by making low-wage jobs more attractive to native-born workers. But he prominently cites the impact that a higher minimum wage would have on reducing government spending on public assistance. In the New York Times, Unz wrote:

Ordinary taxpayers would be the other great beneficiaries, saving many tens of billions of dollars each year in payments for Food Stamps, the Earned Income Tax Credit, housing subsidies, and other social welfare programs. Businesses should pay their own employees rather than quietly shifting the burden to government programs and the American taxpayer. Conservatives and free-market supporters should endorse this simple idea.

This point has been echoed by other conservatives, including Phyllis Schlafly, who earlier this year wrote:

Legislation to raise the minimum wage would elevate many low-wage earners above the income threshold that qualifies them for benefits and should result in reduced welfare spending. That’s a tradeoff Republicans could support.

A study for the Center for American Progress calculated that raising the minimum wage to $10.10 per hour would reduce enrollment in SNAP, the Supplemental Nutrition Assistance Program, by between 3.1 million and 3.6 million persons nationwide, and would reduce program expenditures by nearly $4.6 billion. Just in Oklahoma, boosting the minimum wage to $10.10 would lead to a 7.5 percent reduction in SNAP expenditures and a roughly 10 percent reduction in program enrollment, the study found. Another study found that more than half of the families of front-line fast food workers are enrolled in one or more public benefit program, and the cost of public assistance to families of workers in the fast-food industry alone is nearly $7 billion.

It is essential that we maintain a robust social safety net for those who are unable, for health reasons, family circumstances, or other barriers, to work full-time. But at a time of scarce resources and chronic budget shortfalls, using public resources to subsidize businesses that choose not to pay decent wages is unwise and unsustainable. A substantial increase in the minimum wage would stabilize families, create a stronger incentive to work, boost the economy, and allow government to focus its resources on critical investments. That’s an approach that should be embraced across party lines.

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Former Executive Director David Blatt joined OK Policy in 2008 and served as its Executive Director from 2010 to 2019. He previously served as Director of Public Policy for Community Action Project of Tulsa County and as a budget analyst for the Oklahoma State Senate. He has a Ph.D. in political science from Cornell University and a B.A. from the University of Alberta. David has been selected as Political Scientist of the Year by the Oklahoma Political Science Association, Local Social Justice Champion by the Dan Allen Center for Social Justice, and Public Citizen of the Year by the National Association of Social Workers.

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