WSJ's Moore Invents Effects Of Minimum Wage Increase

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The Wall Street Journal's Stephen Moore attacked striking fast-food workers' demands to increase the minimum wage by falsely claiming that such a raise would result in less teenage employment and more workplace automation.

Moore, a senior economics writer for the Journal, appeared on the August 29 edition of Fox News' Your World with Neil Cavuto to discuss the fast-food protests that are underway across the country. Moore claimed that strikers' demands, if met, would result in "a lot less teenagers hired for those kinds of jobs" and fast-food restaurants deciding to "substitute workers with machines and automated things":

Moore's claim that a higher minimum wage would negatively affect teenage employment is baseless. The Huffington Post quoted University of California, Berkeley economist Sylvia Allegretto, who was the lead author of a 2011 study on minimum wage and teen employment, explaining that those who "fight such [minimum wage] hikes, arguing that higher wages discourage growth, particularly in down economies" are not supported by her research:

Raising the minimum wage wouldn't cripple job growth and hurt businesses like some conservative groups have argued, according to a new study. To the contrary, it could pump money into the economy and reduce turnover in low-wage positions, the researchers found.


"A lot of people say we can't increase the minimum wage during recessions because it'll have this big negative effect," said Allegretto, whose study was published in the journal Industrial Relations. "We didn't find that -- in general, or when there were recessions."

Researchers, who focused specifically on teen employment, looked at every federal and state minimum-wage raise over the last twenty years, including during the recession from 2007 to 2009, and found that the effects of wage raises on job growth and unemployment didn't change with the business cycle. Allegretto said a lot of the benefits of higher minimum wages tend to be overlooked -- like higher morale and productivity, and less time spent searching for workers and training them.

The only example of workplace automation Moore gave as evidence against a minimum wage increase was that customers "pour your own Coke, pour your own iced tea" -- which is already standard practice in many fast-food restaurants. Furthermore, increased automation is a natural part of technological development and it shouldn't be avoided -- but it also shouldn't be used to threaten workers. As the Los Angeles Times explained, automation is not an argument against treating workers fairly:

What is sometimes understated is the likelihood of low-wage jobs being automated, a real and growing threat. But if a small growth in the minimum wage is enough to move an industry to automation, it is likely that automation was coming in short order anyway. Technological progress is inevitable and further automation unavoidable. If raising the minimum wage leads to productivity gains through investment in automation, so be it. In the meantime, we need to reward American workers for their efforts.

Posted In
Jobs, Wages, & Unemployment, Poverty
Fox News Channel
Neil Cavuto, Stephen Moore
Your World w/ Neil Cavuto, The Wall Street Journal
Minimum Wage
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