March 10, 2013

JOHN FRARY: Legislators must understand consequences of supported bills

John Frary,

In May 2011, the Republican majority, along with a single Democrat, rejected a bill to increase the minimum wage from $7.50 to $8 per hour.

Now that the Democrats are back in the majority and President Barack Obama has proposed increasing the national minimum wage to $9 we can expect a renewed effort to increase Maine's minimum wage.

During the 2011 debate, Rep. David Webster, D-Freeport, called minimum wage "a floor of conscience." Having no evidence to the contrary, I'm not inclined to challenge Webster's claim to have a conscience.

A lot of negative evidence shows that all politicians have a conscience. Certainly, none of them has ever admitted to acting or voting contrary to that inner voice. Even those who are sentenced for various crimes invariably tell the judge, before sentencing, that they are conscience-stricken and sometimes shed tears to demonstrate that doleful condition.

What interests me is the qualities of the liberal conscience as exemplified by the Freeport Friend of the Downtrodden.

Most of us understand that conscience is inseparable obligation. We suffer from some degree of guilt for failing to keep a promise, pay a debt, repay a favor, neglect a duty, that sort of thing.

What responsibility was Webster intent on meeting?

As a Democrat with liberal constituents, he expects only electoral advantage from this vote. As member of a political party intent on continuing government power, he suffers no loss of regard from his colleagues. He works as a consultant, and consultants rarely hire minimum wage labor. His vote imposes no cost on him.

I believe the first obligation of a legislator is to understand the consequences of the bills he supports. He should pay attention to the impact on the economic and social realities.

Christina D. Romer, who chaired President Obama's Council of Economic Advisers, has written that economic analysis raises questions about whether a higher minimum wage will achieve better outcomes for the economy and reduce poverty.

In fact, economists are divided about whether the effect is to improve or damage conditions for low-income workers. Some maintain the net effect is neutral. Some workers gain, some lose their jobs or don't get hired. Empirical studies on the results have been piling up since 1946.

Romer argues that an increase in the Earned Income Tax Credit (EITC) would be a far more effective legislative tool for increasing the incomes of the minimum wage workers. President Obama has a problem with that.

The Congressional Budget Office is obliged to "score" such a measure, i.e., estimate its cost, revealing yet another jump in our endless budget deficits. It's politically more palatable to impose the cost on business. All the more so, since the voters will not trace the increased prices that Romer expects back to the legislation.

In fairness to our president, it must be said that Alan B. Krueger, Obama's new chief economic adviser, co-authored a study, "Myth and Measurement: The New Economics of the Minimum Wage," in 1995. The study criticized the prevailing consensus among economists that job markets for low-skilled adults and teenagers were competitive and that in such markets, minimum-wage legislation will increase wages at the cost of modest but significant reductions in employment.

Professors David Neumark and William Wascher have replied to the Krueger analysis with a collection of critical essays. The debate goes on among economists, and most small businessmen seem to agree that increases in the minimum are a drag on their businesses.

The fact that almost all of Maine legislators with experience running a business are Republican is relevant in this regard.

My guess is that Webster and his Democratic colleagues haven't the slightest interest in this debate. They will vote to increase the minimum wage because it makes them feel good and because many voters like the idea of helping the poor -- especially at no cost to themselves.

I doubt they have heard the claim that more than 98 percent of full-time hourly employees already earn more than the federal minimum or that the majority of those who take home the minimum are adolescents living at home.

If they have heard it, I'd guess that they dismiss it as right-wing propaganda and inquire no further.

John Frary, of Farmington, is a retired professor and former Republican candidate for Congress.

Were you interviewed for this story? If so, please fill out our accuracy form

Send question/comment to the editors




Further Discussion

Here at KJonline.com we value our readers and are committed to growing our community by encouraging you to add to the discussion. To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use.

Questions about the article? Add them below and we’ll try to answer them or do a follow-up post as soon as we can. Technical problems? Email them to us with an exact description of the problem. Make sure to include:
  • Type of computer or mobile device your are using
  • Exact operating system and browser you are viewing the site on (TIP: You can easily determine your operating system here.)