Minimum Wage Increase: Debunking Conservative Misinformation

Washington, DC - With members of the House of Representatives expected to debate and vote on a proposed increase to the minimum wage today, Media Matters for America addressed common examples of conservative misinformation perpetuated in the media surrounding the discussion of an increase.

"Claims that an increase to the minimum wage will help few people and hurt the overall economy aren't supported by fact," said Karl Frisch, spokesman for Media Matters for America. "Hopefully members of the media will think twice before reporting on or using these bogus arguments without noting just how questionable, misleading and false they truly are."

Conservative Misinformation on Increasing the Minimum Wage

Minimum wage hike will result in job losses and discourage job creation. Conservatives commonly argue that increasing the minimum wage will negatively affect the economy, resulting in stagnating job growth and higher unemployment. However, numerous studies have examined recent increases in the minimum wage at both the federal and state level and found that higher wages do not result in job loss. One recent example is Oregon, which increased its minimum wage to $7.50 in 2002. Four years later, "Oregon's experience suggests the most strident doomsayers were wrong," according to a November 3, 2006, Wall Street Journal article. Indeed, private, nonfarm payrolls have increased there at twice the national rate, industries that employ many minimum-wage workers have experienced considerable job growth, and unemployment has dropped to 5.4 percent from 7.6 percent in 2002.

Only teenagers and part-time workers would benefit from wage increase. Conservative commentators have claimed that most employees who would benefit from the Democratic proposal to raise the federal minimum wage are "students and other part-time workers." In fact, while most workers earning the current minimum wage of $5.15 per hour are part-time workers, the majority of workers who would see their wages rise under the Democratic proposal are not. The Economic Policy Institute (EPI) found that a majority -- 53 percent -- of those who would be affected by the Democratic minimum-wage proposal are full-time workers (at least 35 hours a week). Similarly, an EPI study released October 25 found that "[i]f the federal minimum wage were increased to $7.25 per hour by 2008, 14.9 million workers would see their wages rise," and those affected by a minimum-wage increase would be "mainly adults who typically work full time and provide significant income to their families.

Minimum wage increase will hurt small businesses. Another common argument against raising the minimum wage is that it will put an undue burden on small U.S. businesses. But an April 2004 study by the Fiscal Policy Institute found that, between 1998 and 2001, the number of small businesses (defined as those with fewer than 50 employees) grew twice as quickly in states with higher minimum wages. EPI has attempted to explain this phenomenon by pointing to "[n]ew economic models," which recognize that employers in low-wage labor markets "may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale." This may also help explain why most small business owners (three out of four, according to a March 2006 Gallup poll) believe a higher minimum wage would have no effect on them.

More Items from Media Matters for America

Lowry: Minimum wage hike will "give a small boost" to "teenagers working summers"

http://mediamatters.org/items/200701090006

In his latest column, Rich Lowry wrote that "[t]he effect" of a Democratic proposal to raise the federal minimum wage "basically will be to give a small boost to the wage of teenagers working summers or after school." In fact, the Economic Policy Institute found that 71 percent of those who would be "directly affected" by the Democratic minimum-wage proposal are age 20 or over.

Will falsely suggested most employees affected by Dems' proposed minimum-wage increase are "students and other part-time workers"

http://mediamatters.org/items/200611210006

George F. Will falsely suggested that most employees who would benefit from a Democratic proposal to raise the federal minimum wage to $7.25 an hour are "students and other part-time workers." In fact, a majority of those who would be affected by the Democratic minimum-wage proposal are full-time workers.

Barnes baselessly cited opposition to "hiking the minimum wage" as evidence of Democratic partisanship

http://mediamatters.org/items/200608150003

On The Beltway Boys, Fred Barnes baselessly asserted that congressional Democrats opposed a bill that would have increased the minimum wage because "Democrats have decided, 'We're not going to help Republicans on anything. ... We're going to object to it ... even when they're offering us things like hiking the minimum wage that we like.' " Barnes did not mention that House Republicans tied the wage increase to a bill that would cut the estate tax, a proposal Democrats vehemently opposed for providing a disproportionate benefit to the wealthiest Americans.

###