Representative Aaron Schock Tilts with the Minimum Wage

 

Ilinois Republican Congressman Aaron Schock appeared last night on MSNBC after the State of the Union address.  In case you forgot or didn't know, MSNBC is the Progressive antidote to Fox News.

Republican elected officials are generally phobic about MSNBC, and approach it with trepidation, if at all.  So I give Mr. Schock credit for his valiant appearance, if not for his  ideas.

The last time I had seen Rep. Schock on TV was at Governor Rauner's inauguration. He was one of a bipartisan pair of Illinois luminaries  from  the 114th  Congress, who ex officio came to  bless Rauner's ascension to power.  It was a boilerplate, cookie-cutter moment with every expectation of the usual cliches.

Except,  Schock tried to add a classical cachet to his commendation.  He evoked the Roman political folk hero, Cincinnatus, as icing on the ceremonial cake.  Rauner, you see,  is  Cincinnatus Redux.   Latin scholars and students were probably proud of Schock's allusion .  Even if  he got his facts wrong.  Cincinnatus served the Roman Republic.  Not the Roman Empire.

But we all make mistakes.

Last night  on MSNBC  Congressman Schock was  on firmer ground.  After all, he was  expounding on the wisdom of the  minimum wage.   But still getting his facts wrong.

No, Mr. Schock, most people who receive the minimum wage in the United States are not teenagers flipping burgers, or college students moonlighting.  The average age of a minimum wager is around 31 and one-third of them are over 40.

Yet it wasn't so much Schock's Conservative-talking-point flub that bothered me.  It was something else he said.   As if it were handed down by the Almighty.   Dollar.

According to Schock, why raise the  federal minimum wage from $7.25 to $10.10?  It would be just about as challenging, he asserted, to live on the latter as the former.  So what's the point?  Better to think about job creation, economic growth, balancing the budget.   And, he further opined, when does it stop?  At $20?  Why not $50?

It had a familiar ring to it.  A rising tide  lifts all boats.  Mainly yachts.

 

 

 

Filed under: Economics, Family Life, politics

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  • We had Daytonius a couple of days ago.

    I don't have anything against a national standard. However, when Yahoo! Finance posted a story about how Aetna's CEO says everyone is entitled to $16/hour, my reaction was "does Aetna assure that it will hire and retain any high school dropout who applies?" Most of the other comments were that Aetna mostly uses part time or contract workers. Hence there is more behind the issue than appears on the surface.

    On the "amount" issue, I mentioned the $15/hour Now people. Emanuel has convinced someone that he enacted $13, but didn't mention in the commercial that it was in 2019, but I guess he bought his votes for now (except that his opponents probably will offer the $15). The people are going to be shocked when they find out that their paychecks do not go up 30% March 1, 2015.

    I left on Berkowitz a comment about Marco Rubio's proposal on the issue. I didn't get a response from him, but maybe you want to look at that.

  • Jack, I read your comment on Berkowitz. I looked at a Donahue interview of Friedman just now and Friedman categorically asserted he was against government subsidies of any kind. Evidently he would oppose Rubio's amswer to the minimum wage which Friedman was also philosophically at odds with.

  • In reply to Aquinas wired:

    Not when I knew Friedman or took a class from him. He was advocating for "a negative income tax, which eventually became (in some form) the Earned Income Tax Credit. The argument he gave was similar--it gave people an incentive to get off welfare and get to work, since at that time, the tax bite meant that anyone working at minimum wage would make less than on welfare.

    YouTube has a contemporaneous (about a year earlier than I have) explanation.

  • In reply to jack:

    It was a 1980 interview centered around Friedman's book "Free to Choose".

    I don't see anything wrong with paying workers a higher minimum wage at a time when middle-class wages have been stagnant. The minimum wage has not been adjusted for inflation. Moreover, raising it would benefit many families who are barely getting by, and who would consequently stimulate the economy by buying goods and services.

  • In reply to Aquinas wired:

    But that doesn't answer, essentially, 4zen's point about lagging job creation, unless you are going to assume that the workers will suddenly become more efficient. Otherwise the fewer jobs or it not benefiting those workers because of inflation point applies.

    And since you are saying "not been adjusted for inflation," does that mean that in response to Schock's "how much" argument, your answer is "not more than the rate of inflation?" I don't think that gets you to $15/hour, which is what the activists want.

  • In reply to jack:

    If it had been adjusted for inflation, the minimum wage today would be over $21.

  • In reply to Aquinas wired:

    Provide a link to a source for that. Also to the difference in stuff like the Earned Income Credit does to net pay.

  • In reply to jack:

    Also check out "Minimum Wage Mythbusters: U.S. Department of Labor".

  • In reply to jack:

    inequality.org/minimumwage/

  • In reply to Aquinas wired:

    The article you cited says that inflation since 1968 only supports $10.55/hour in 2012 (maybe $11 in 2015). Advocates can advocate anything in addition to that. However, that doesn't mean that they have done the macroeconomic analysis of the effects. Also, they said that the minimum wage should be " benchmark[ed] it to personal income growth in the economy as a whole," but, unfortunately, even though the economy has recovered since then, personal income has not. Thus, by their own logic, they defeated themselves.

    Now, let's say someone legislated $21/hour. Not only the people making $7.25/hour ($8.25 in Illinois) have to have their pay tripled, but to give anyone now working for $11-$21/hour an incentive to work, their pay would have to be raised considerably above $21/hour. Either nobody is going to be able to get an entry level job, or inflation would have to exceed the level in the 1970s to sustain that kind of pay scale. I remember the complaints about pay scale compression in those days.

    So, Schock's question is not frivolous.

  • In reply to Aquinas wired:

    I was going to say " recovered since 2009"

  • In reply to Aquinas wired:

    Also, especially note the part of the clip, where Friedman says the negative income tax would work by instead of having income tax deducted from the paycheck, the negative income tax would be added to the paycheck. That sounds real close to what Rubio was proposing.

    Anyway, the issue isn't one or another's view of Friedman, but your view of Rubio, especially compared to those who just say "let's force everyone to pay $15/hour" or whatever amount.

  • I don't see anything wrong with considering Schock's last statement. There is an over-supply of labor, why?

    Why has the United States fallen to 12th in the world in business start ups?

  • In reply to 4zen:

    I'm not sure whether you added the "oversupply of labor" on your own. Schock clearly mentioned job creation, and there were recent stories about how Illinois lagged in job creation and while Emanuel touted bringing jobs to Chicago, others, such as Preckwinkle, indicated that it was a zero sum game of poaching from the suburbs. Obviously, there is a problem with the rate of business startups, and it has always been said that small business is the biggest job creator.

    But if there is an oversupply, that gets down to another comment I made on Berkowitz on immigration reform. Does a customer want to save on produce even though the customer can't converse with the clerk, and is the owner saving any money if the clerk can't understand the difference between a pound and a half pound? Or should a customer willingly pay more to shop at Jewel--a union shop owned by venture capital?

  • In reply to jack:

    I just read your Berkowitz comments, all valid. I wanted to comment on inflation, but I didn't because the CBO says that the effects would be minimal, apparently they think you can eat a LED tv.

    Are we also going to give seniors on fixed incomes a thirty percent raise or we just going to inflate them into eating worm burgers. We also know giving 50 million Americans free food cards didn't send meat into the stratosphere.

    And please don't consider the zero percent interest rates that our country needs to finance our 18 trillion in national debt, interests rates that have destroyed seniors savings and kept them working in said over-supplied job market. But these are just more conservative talking-point flubs. Better to continue hacking at the American giving tree until it's a stump.

  • In reply to 4zen:

    Your LED Tv comment and AW's on "not keeping up with inflation" brings up the measure.

    Core CPI, for monetary policy purposes, excludes food and gasoline, because they are too volatile (maybe a pun in the case of gasoline). Gasoline prices are down about 40% in the past couple of months, while food prices (both at the grocery and restaurants) are way up, supposedly due to the California drought. Regardless of what measure is used to take care of "not keep up with inflation," my $9 Big Mac point still holds. A pay hike for servers at Alinea isn't going to make a big percentage difference on the bill, but those people don't eat there. It will make a big difference on the bill at Mickey D's.

    Then there is your people on fixed incomes point, to the extent they are not helped by the Social Security CPI adjustment, which has been skipped several times recently.

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