The Pennsylvania Debate on the Minimum Wage
On various right-wing blogs, I found segments of the debate last night between Democrat John Fetterman and Republican Mehmet Oz in their race for Pennsylvania’s open seat in the U.S. Senate. Not surprisingly, they focused on Fetterman’s often-awkward answers to questions. I was curious about their views on the minimum wage, which, in Pennsylvania, is still the federal $7.25 an hour.
Here’s a 4-minute segment, uncut, that nicely summarizes their views. Although Fetterman does state the issues awkwardly, I at least understood his point. I thought some of the conservative sites did Oz a disservice by not showing his cogent reasoning on the minimum wage. Watch the whole thing. As I said, it’s only 4-minutes long.
I think that one thing Fetterman said didn’t make sense, and I think it had nothing to do with his recent stroke, because I’ve seen many “stroke less” Democratic politicians say similar things. The questioner says:
What do you say to small business owners who have told us that if the minimum wage were increased to $15 an hour, it would put them out of business?
Parenthetical comment before we get to Fetterman’s answer, similar to the one asked in the movie Butch Cassidy and the Sundance Kid when they are being relentlessly chased by a large number of people on horses: “Who are those guys?” I’ve never seen such a balanced and informed pair of questioners. They actually seem to want to get answers. And the “if … were” formulation is grammatical icing on the cake. Their performance is better than that of any questioners I’ve seen in presidential contests in the last 30 years.
Now to the part of Fetterman’s answer that I found interesting:
You can’t have businesses being subsidized simply by not paying individuals that just simply can’t evade [I’m pretty sure he means “afford”] to pay their own way.
I’ve heard a number of people say that paying low wages amounts to a subsidy to businesses. I don’t see it. You might say “Well, they can pay lower wages than otherwise because of things like welfare and Medicaid that go to low-income people.” But many of these programs reduce the supply of labor, making wages higher than otherwise. And to the extent some government programs, like the Earned Income Tax Credit, do increase labor supply, making wages lower than otherwise, an attempt to judge the well-being of those wage earners without taking account of their gain from the EITC makes no sense.
Check out how Oz lays out the idea of market forces driving wages and the importance of unblocking market forces, especially in the energy sector. I think he overstates the resulting wage rates, but he makes a good point. He also makes the point that $15 an hour has already been achieved in Pennsylvania by market forces. I bet that’s a bit of an exaggeration, but not much. Moreover, where you find people earning substantially less than $15 an hour, you should worry that a $15 minimum wage would wipe out their jobs.
By the way, I do wonder what the names of the questioners are. A few searches on Google didn’t give it to me.