Opinion Editorial | |
| Wednesday, September 22, 1999 | |
Times Reverses Course On Minimum Wage |
Last week, the New York Times editorialized unequivocally in favor of raising the minimum wage from $5.15 per hour to $6.15, something Congress probably will support later this year. "An increase now will boost income for the poorest workers without the danger of creating more unemployment," the Times says.
As recently as 1996, the Times was willing to acknowledge that there might be some negative consequences. The proposed increase from $4.25 to $5.15, which was later enacted, would wipe-out 100,000 jobs, the Times conceded. It also admitted that Republicans were right to criticize the minimum wage as a "crude" antipoverty tool. That is because most minimum wage workers live in families with incomes well above the poverty level. Nevertheless, the Times supported a higher minimum wage.
The 1996 editorial, however, was a break from the past for the Times, which had persistently editorialized against the minimum wage since at least the 1930s. As recounted in his excellent book, "Times Change: The Minimum Wage and the New York Times" (Pacific Research Institute, 1994), economist Richard McKenzie documents the Times' long, consistent and correct opposition to the minimum wage.
McKenzie reprints numerous Times editorials from as far back as 1938. Many exhibit economic sophistication far beyond that of today's Times. For example, a June 4, 1938, editorial correctly noted why higher minimum wages inevitably destroy jobs. Said the Times, "One of the facts that economists have discovered over and over again is that when a commodity or service is forced by law, monopoly or other conditions above the 'equilibrium' price that free competition would tend to establish, a certain portion of it remains unsold." This was true in 1938 and it remains true today.
The great economic journalist Henry Hazlitt, who was a Times editorial writer from 1934 to 1946, was probably responsible for its early sensibility on the minimum wage. But well into the 1970s and 1980s, the Times continued to editorialize against the minimum wage, long after the paper had adopted reflexively liberal views on almost every other issue.
For example, an August 29, 1977 editorial said, "We believe that evidence linking the minimum wage to joblessness is compelling." A December 2, 1980 editorial warned that higher minimum wages could fuel inflation, by forcing up the wages of workers already above the minimum.
On January 14, 1987, the Times published what has to have been its most remarkable editorial. The headline tells it all: "The Right Minimum Wage: $0.00." Said the Times, "Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired." It concluded that the time for the minimum wage had passed and it should simply be abolished.
McKenzie thinks that academic research on the minimum wage was driving the Times' editorial positions and is responsible for its flip-flop. When economists were united in their view that higher minimum wages reduce employment, the Times articulated that view. But when more recent research by economists David Card and Alan Krueger, concluded that higher minimum wages may actually increase jobs and began to break down the economics profession's unanimity, the Times seized the opportunity to reverse its opinion. Yet as McKenzie notes in a new paper published by the Federal Reserve Bank of Dallas, the overwhelming weight of economic opinion still says that the minimum wage reduces employment.
"A foolish consistency is the hobgoblin of little minds." So said essayist Ralph Waldo Emerson in 1841. Perhaps so. But a foolish inconsistency is sign of something also. Usually it is muddled thinking, other times political expediency, and occasionally just plain hypocrisy. In the case of the Times and the minimum wage, I am inclined to think it is the last.
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, September 22, 1999.
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