The minimum wage is an average wrong
President Obama revealed his top policy goals for 2014 during his State of the Union address in January. Among these is a 39% increase the federal minimum wage. As the first step toward this increase, he announced our federal government would begin voluntarily paying its minimum-wage contract workers 39% extra – $10.10 instead of the current minimum of $7.25. It is worth noting that this is the same government that can’t pay its bills without borrowing money, and the same government that is burying young Americans under trillions of dollars of future taxes. The fact that it is deliberately and openly paying more than necessary for contract work borders on the absurd. But the fiscal implications are relatively minor. They are worth setting aside to focus on the President’s reasoning, which defies common sense, and his justification, which defies common decency.
When President Obama announced the federal pay increase on January 28, he said: “In the coming weeks, I will issue an Executive Order requiring federal contractors to pay their federally-funded employees a fair wage of at least $10.10 an hour – because if you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty.” That might sound nice, but it doesn’t make sense. Why should a government job pay 39% more than the market rate simply because the job is performed for military personnel? It’s hard to find the end of that double standard. Do people who provide services to the Border Patrol deserve extra money? What about the Post Office? The Social Security Agency? By this logic any contractors that provide services to a government entity deserve higher pay than they would receive in the private sector. Why? Are they better than the people cooking meals in our hospitals, or washing dishes in our schools? It turns out President Obama was getting to this very point. It seems he wants all mess cooks and dish washers to be paid more.
When President Obama signed the contractors’ pay increase into law on February 12, he said: “in the wealthiest nation on Earth, nobody who works full-time should have to live in poverty”. That is a noble sentiment, and it’s generally valid. It doesn’t make sense that an American sincerely trying to earn a living should have to endure hunger or squalor in our country. However, President Obama rides this sentiment into treacherous territory. He suggests it is the government’s duty to demand this noble sentiment from citizens by legislating it. He is saying that charity should not only be a moral obligation, but a legal one. First of all, charity by law isn’t charity – it’s extortion. More to the point, that isn’t how America works. We are supposed to have laws that protect people from each other. Legislating charity does the exact opposite – it hurts some people to benefit others. Our nation is better than that. We have more than enough good-hearted charity in our towns, neighborhoods and families to carry every honest American through every time of need. We don’t need lawmakers and bureaucrats to help squeeze charity out of us with things like a minimum wage. Of course, this is the view from ten thousand feet. Sadly, the view from the ground is even uglier.
The Congressional Budget Office analyzed President Obama’s minimum wage proposal, and released a report on February 18. It found the new rate would result in higher incomes for 16.5 million Americans, moving 900,000 of them above poverty line. It also found the new rate would result in lower incomes for many other Americans, and cost 500,000 people their jobs. The White House’s response was as disappointing as it was predictable - it argued the average. It claimed that the harm it will do to some Americans was outweighed by the good it did for others: “On net CBO estimates that national income would rise… the benefits of raising the minimum wage outweigh any potential costs”. Then it cited a number of economists in support of this average benefit. But rather than score points in favor of the minimum wage, the White House simply reminded us why economists should never be allowed to run countries – they put mathematical averages ahead of human lives. A calculator is no substitute for common decency. Regardless of whether the economists predicted the average correctly, the number that matters most is the estimated count of Americans that will lose their jobs or their businesses to this policy: five hundred thousand.
Our government should never be permitted to harm law-abiding Americans. For it to do so knowingly is nothing short of despicable. The White House hopes to hide human suffering behind an average, but this is not a country of averages. It is a country of individuals with equal rights, who at least deserve enough respect not to be swept under the rug of some White House statistician.
Pushing to increase the minimum wage is a popular way for politicians – both Democrats and Republicans – to buy votes from citizens. President Obama burned his political capital in his first term, and is looking for easy victories that will bolster his image and his party. A minimum wage increase fits the bill. But it doesn’t meet the American standard for good governance: “protect equally, and do no harm.” The White House is arguing that it is justifiable to hurt some good Americans as long as, on the average, there is a net benefit. That is a repugnant, shameful, un-American idea. There is no valid justification for hurting good Americans unnecessarily, period. It doesn’t matter how few there are, whether they are small business owners or low-wage workers, or how many other Americans might stand to gain from their loss. Our government will never have the moral right to deliberately harm some Americans for others’ benefit. Americans should reject the President’s minimum wage proposal on that basis.