On the January 23 broadcast of Fox News Radio 600 KCOL's Mornings with Keith and Gail!, co-hosts Keith Weinman and Gail Fallen repeated a number of conservative falsehoods regarding an increase in the minimum wage, including misleading claims that a minimum wage hike would hurt business, discourage job creation, and apply only to entry-level workers. Weinman also repeated a debunked smear about Democratic U.S. House Speaker Nancy Pelosi (D-CA) by suggesting baselessly that she supports the Fair Minimum Wage Act because it caters to the Del Monte Corp., which has its headquarters in her congressional district.

The Fair Minimum Wage Act (H.R. 2) passed the U.S. House of Representatives on January 10; at the time of the KCOL broadcast, the Senate was considering its version of the legislation (S. 2). On January 24, the Senate failed to pass the bill because Republicans refused to pass the wage hike without added tax cuts for businesses. The bill would have increased the U.S. minimum wage incrementally over four years from the current $5.15 per hour to $7.25 per hour in 2010.

In Colorado, voters recently passed Amendment 42, which changed Colorado's Constitution to raise the minimum wage from $5.15 per hour to $6.85 per hour and adjust it annually for inflation. The measure went into effect on January 1.

During the January 23 broadcast, Fallen echoed a common conservative argument against raising the minimum wage by implying that an increase would hurt small-business owners and result in job losses. Fallen asked, “Can one make a case for raising the minimum wage that results in a total loss of jobs because of said hike?” She then added, "[A]ny number of small-business owners ... just in Colorado, this minimum wage hike is going to affect your business, not only short term, but long term. And I'm willing to bet that many small-business owners are going to find themselves out of business." Fallen further asked, "[I]f raising the minimum wage is at the expense of job opportunities, then what are we really accomplishing here?"

As Media Matters for America has noted, 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. The Economic Policy Institute (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 also might 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.

Media Matters also noted that 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 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.

In addition, Fallen claimed that “many people” voted for an increase in the minimum wage “emotionally ... forgetting that minimum wage jobs, you know, typically you enter and then you tend to rise throughout the work force. This is not something that you do for the rest of your life.” Similarly, Weinman claimed, “The minimum wage is intended [for] very transitionary jobs, entry-level jobs.”

While ideally minimum wage-paying jobs may be intended as entry-level work, as Media Matters points out, EPI found that, based on the 2005 Current Population Survey data, a majority -- 71 percent -- of those who would be “directly affected”* by the Democratic minimum wage proposal are age 20 or older, and 25 percent are parents. Further, in an October 25, 2006, briefing paper, EPI reported that families with workers “affected” by a raise in the minimum wage “rely on those workers for over half of their earnings,” and, if the wage increase were put into effect, “7.3 million children would see their parents['] income rise.”

Weinman also repeated a dubious attack on Pelosi -- citing a January 16 editorial in The Wall Street Journal (subscription required) -- by promising his listeners he would keep them posted on “Tuna-Gate,” which, according to Weinman, is "[t]he exemption of American Samoa" from the Fair Minimum Wage Act because of “the two big tuna companies that are headquartered in Nancy Pelosi's California, one of them headquartered in her district.” Presumably, Weinman was referring to media reports that suggested the minimum wage legislation in the House catered to Del Monte Corp., which has its headquarters in Pelosi's district and owns one of American Samoa's largest employers, StarKist. However, as Media Matters has noted, “Pelosi has supported several versions of the Fair Minimum Wage Act since it was introduced by Democrats in 1999, three years before Del Monte bought StarKist, and each has included a wage hike for the Commonwealth of the Northern Mariana Islands but not for American Samoa."

Pelosi was a co-sponsor of the Fair Minimum Wage Act of 1999 and co-sponsored subsequent versions of the bill, introduced in 2001, 2002, 2003, and 2005. Another version of the Fair Minimum Wage Act was introduced in 2004, but Pelosi did not co-sponsor that bill. The Fair Minimum Wage Act of 2007 passed the House 315-116 on January 10.

Republican House members also introduced minimum wage proposals in 2005 and 2006 that included a wage hike for the Northern Mariana Islands but not for American Samoa.

Moreover, the Fair Labor Standards Act (FLSA) includes the American Samoa Labor Standards Amendments of 1956, which required that minimum-wage rates vary in American Samoa according to industry. After subsequent amendments, the wage order procedure for American Samoa remains different from that of the United States and its other territories. Indeed, according to the FLSA, the U.S. secretary of Labor must appoint an "industry committee" in order to establish minimum wages specific to industries in American Samoa.

*When EPI includes those who would be “indirectly affected,” defined as “workers currently earning above $7.25, likely to be affected by 'spillover effects,' ” the total percentage of adult workers “affected” is 79 percent.

From the January 23 broadcast of Fox News Radio 600 KCOL's Mornings with Keith and Gail!:

WEINMAN: But, again, the bill now with the -- with the exemption for American Samoa still in it, being considered by the U.S. Senate.

FALLEN: You know, one of the concerns, and I think this is a concern shared by you, as a small-business owner in northern Colorado, as it is shared by business owners -- small-business owners who are particularly affected across the United States. And I think one of the concerns, particularly in American Samoa, is, OK, fine, so they raise the minimum wage, but what is the end gain? What is the end result if the companies just say, “You know what, can't afford to pay it. We're going to move operations elsewhere.” And that is the unanticipated consequence of this whole minimum wage thing, with which, you know, many people voted emotionally on it, saying, “Wow, this is a good thing. We want people to be able to, you know, buy milk for their kids and buy tuna for their sandwiches, and, you know, support their families.” And all of that is just very well and good, conveniently forgetting that minimum wage jobs, you know, typically you enter and then you tend to rise throughout the work force. This is not something that you do for the rest of your life. So the concern primarily in American Samoa is, is -- and I think this is Nancy Pelosi's line of thinking, although I would really hesitate to go there -- but I think one of the concerns is, is that the company will actually pull up stakes and leave.

WEINMAN: Pull up stakes and leaves, and go to Thailand or the Philippines, where they can pay workers 67 cents an hour --

AUDIO: We're all dead.

WEINMAN: -- in Thailand or the Philippines. Seven and a quarter would be required according to the bill if it passed without the Tuna-Gate exemption. But, again, in American Samoa, they're paying workers three and a quarter an hour versus 76 cents an hour in other places where these companies could operate. So, as Gail says, you have to separate -- you have to have two different arguments here. You have to have an argument whether or not to raise the minimum wage, and arguments can be made on both sides of that. Keep in mind, the minimum wage hasn't gone up in 10 years. On the other side of that argument, people maintain -- economists, economists that one would trust because they are very, very accomplished -- say that the minimum wage is not intended as something that somebody gets into a job --

FALLEN: Right.

WEINMAN: -- and stays at. The minimum wage is intended -- very transitionary jobs, entry-level jobs.

FALLEN: It's a starter position.

WEINMAN: Exactly. That people get into and they aspire to more and they move up and advance their careers. Those jobs then open up and more people get into these as first jobs. That's what minimum wage is intended to do. Still, it hadn't gone up in 10 years, so one can make a case for raising the minimum wage. But --

FALLEN: But --

WEINMAN: But --

FALLEN: But -- yeah.

WEINMAN: Yeah. Yeah.

FALLEN: Can one make a case for raising the minimum wage that results in a total loss of jobs because of said hike?

WEINMAN: Now, what are you talking about? Are you talking about American Samoa, the possibility of them hiking the minimum wage, including American Samoa in the bill and StarKist and Chicken of the Sea saying, "OK, then we're leaving American Samoa --

FALLEN: Mm-hmm.

WEINMAN: -- and we're going to leave 5,000 people without jobs. We're going to bust the economy"?

FALLEN: Well, I'm also talking about, though, any number of small-business owners, many of you of whom we've actually had the opportunity to talk with, about how, just in Colorado, this minimum wage hike is going to affect your business, not only short term, but long term. And I'm willing to bet that many small-business owners are going to find themselves out of business. Which is the ultimate irony.

WEINMAN: Well, we've talked to small-business owners who say that it is having a very real effect on them. Small-business owners that are cutting back on other expenditures for their business because they're having to hike wages because of the minimum wage bill, because of the minimum wage bill and its intended -- its anticipated effect in the year 2007.

FALLEN: So does the end justify the means?

WEINMAN: Well, then you're lapsing back into the debate over the minimum wage and whether to raise it at all, and how much to raise it. Keep in mind, it hasn't been raised in 10 years. So, Colorado stepped in, as many other states did, and said, “We're going to raise it on a state level.”

FALLEN: But, if by -- if raising the minimum wage is at the expense of job opportunities, then what are we really accomplishing here?

WEINMAN: Is it at the expense of job opportunities if it hasn't been raised in 10 years?

FALLEN: If it's putting businesses out of business, yeah.

WEINMAN: If it's going to create --

FALLEN: I would think that's very clear-cut.

WEINMAN: -- a hardship on business, then it could be argued it is at the expense. On the other hand, should businesses be expected to raise wages like the minimum wage over a period of 10 years, somewhat? Should the government do it? That's a whole separate argument again. Is that nanny state? Should the government be involved? Should the government do it? Uh, the argument for the minimum wage is that, without it, businesses -- some businesses -- would get away with paying wages that are not reasonable.

FALLEN: Yeah, like 67 cents in Thailand?

WEINMAN: In Thailand that might not be bad money. Or the Philippines. And I don't know that. In American Samoa, I would think that three dollars and -- what are they paying in American Samoa? -- three twenty an hour?

FALLEN: Something like that.

WEINMAN: Three twenty-five an hour. Three twenty-six an hour.

FALLEN: Well, what's the cost of living in American Samoa?

WEINMAN: I think that's good money there. I would think that's good money there.

FALLEN: Hmm. Let me see if I can find out for you.

WEINMAN: OK. So we'll keep you posted on Tuna-Gate, but as it stands now, the Senate has now taken up the bill with the exemption for American Samoa remaining. Again, the minimum wage bill said -- was said to apply to all of the United States and its territories. The exemption of American Samoa, where the two big tuna companies employ 5,000 people, the two big companies that are headquartered in Nancy Pelosi's California, one of them headquartered in her district in California, will continue to get the exemption, the single exemption to the minimum wage hike, if the bill passes. Now, the Senate as it stands -- and, again, it was about two weeks ago that Nancy Pelosi promised to go back and take a look at it after the story broke out into the mainstream press, at least somewhat out into the mainstream press, it was The Wall Street Journal that did that in its editorial column.

FALLEN: Ah, isn't it a refreshing thing? A brand new era in Congress.