Toe the Line: College Republicans | Increasing the minimum

The minimum wage debate

By Will Cassidy 04/01/15 11:14pm

The Penn College Republicans have an atypical stance on the minimum wage. In our view, this is largely a positive question. Penn students understand that there are concrete tradeoffs that come with higher minimum wages.

From a policy standpoint, the most important thing is that policy makers are upfront with the American people about these tradeoffs. For example, during President Obama’s last rhetorical push for a minimum wage, he essentially portrayed it as a costless policy change. Basic economics tells us this is not true. This skepticism was confirmed by a Congressional Budget Office report, which came out confirming the obvious: In general, higher minimum wages increase unemployment. At the time, this was seen as a setback for President Obama as he had denied that there were any costs.

This kind of rhetoric is what we’re most critical of. We can debate policy, but we shouldn’t mislead voters.

Secondly, we need to be smart about how we implement minimum wage changes. There’s economic research that suggests policy makers should be cautious on two fronts.

The first is that the timing of minimum wage increases can affect firms’ responses. For example, if we increase minimum wage during a recession or recovery it’s possible that firms are more likely to invest in technology as opposed to hiring new workers. Even if we agree to increase the minimum wage, timing is important.

A second consideration is the minimum wage’s effect on youth unemployment. There’s ample evidence that shows that holding a job when you’re young increases life outcomes throughout your lifetime. Young workers are most likely to be harmed by minimum wage increases. Policy makers may want to consider designing a minimum wage so that its effect on young workers is mitigated.

In sum, our view is pragmatic. We’re not so much worried about the policy as the outcome. If policy makers can go before the American people, be honest about potential costs and convince them to support a minimum wage increase, we’re all for it. What we won’t stand for is misleading the public purely in order to score political points by passing legislation.

Will Cassidy

C‘16

Penn College Republicans representative

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