If you're one of the millions of people that currently make $7.25 per hour, no doubt the idea of making $22 per hour, over three times as much, within the next couple of years sounds too good to be true. That's because it is. Nobody is actually suggesting it. But that's exactly what economic naysayers, political opponents, and Elizabeth Warren-bashers are claiming the newly elected Massachusetts senator has proposed, extrapolating their allegations into scenarios of small business doom, corporate collapse, and economic apocalypse. And yet, Sen. Warren never proposed an increase to $22 per hour for the national minimum wage. So why try to pin such a charge on her?
The allegations, like that made by Ben Bleiberg at Policymic (Tuesday, March 19), started coming quickly after a video of the Massachusetts senator discussing a raise in the national minimum wage (to $10.10, as has been proposed by Sen. Tom Harkin, D-Iowa) at a recent hearing of the Senate Committee on Health, Education, Labor and Pensions began making the rounds. Twitter and social media lit up with many reducing their opposition to false comparisons and outright name-calling.
Still, Warren never made the proposal or suggested that the minimum wage be raised to $22 per hour. The $22 per hour enters the story when Sen. Warren points to a chart that suggests that if minimum wage had increased alongside worker productivity since 1960, the minimum wage would now be almost $22.
To better grasp the significance of the disparity, Warren, who was a consumer advocate before entering the political arena, questioned Dr. Arindrajit Dube, a University of Massachusetts Amherst professor who studies the economic impact of the minimum wage. She asked where the other $14.75 went in the last 50 years since it hadn't gone to the average worker. Dr. Dube noted that if the average minimum wage earner's pay had increased as much as the top 1 percent of wage-earners, their minimum wage would be closer to $33 per hour (before the recession in 2007).
All of which was to illustrate the size of the minimum wage, the unfairness to the average worker in dollars paid as opposed to productivity, not to suggest that the wage be raised to that level. William A. Jacobson, writing at Legal Insurrection, said that Warren "cherry-picked" the $22 amount out of several she could have chosen (supposing that Warren was using the same study as he, which offers several possible minimum wage levels based on different variables), even noted that in keeping up with inflation, a tie-in to the Consumer Price Index that has been suggested be made law, the minimum wage would have increased to $10.52 per hour.
But where the aforementioned Bleiberg at least acknowledged that Warren was not "advocating the wage be that high" before he offered various reasons why the $22 wage was a "bad idea," Jacobson simply ran with the idea that Warren "cherry-picked" the $22 figure from the study and was actually suggesting the minimum wage reflect the average worker's increased productivity (which, he argued, cannot be gauged accurately). She did no such thing. Jacobson's argument was based on his cherry-picking of Warren's question of where the $14.75 went if not to the workers. His point was to paint Warren as all hype and no substance, attacking her through her questioning method and implying that neither her talking point nor her reasoning were valid.
But Warren was going for fairness and arguing that a minimum wage of $10.10 per hour by 2015 was sustainable.
Warren even attempted to illustrate the current minimum wage from a layman's perspective. She noted that while running for the senate, she often ate a McDonald's No. 11, which she said cost $7.19. She used that item because the average everyman can quickly calculate that someone making minimum wage just spent an hour's worth of earnings to pay for a No. 11 meal.
And when Southport Brewing Co. owner David Rutigliano interjected that Congress remember that all restaurants are not created equal, Warren quickly responded, noting that inflation would account for a 4-cent increase in the No. 11 ($7.23) over a three-year period (the time in which the minimum wage increases to $10.10 are proposed to take effect) -- and that wasn't sustainable? Even with Rutigliano arguing on behalf of full-service restaurants, where several employees make minimum wage and higher, Warren's point still stands. And Rutigliano seemed to make the point for her when he noted that restauranteurs generally compensated by increasing prices higher than the going rate. (For example, a full service restaurant would increase prices by a quarter, 50 cents, or a dollar per item, instead of 4 cents.)
Dr. Dube and Warren both drove home the idea that the economic impact of raising the minimum wage by just a few dollars historically has not adversely impacted local economies, which is the foundation of the national economy. There was no noticeable increase or decrease in overall unemployment, including in the restaurant business, where the bulk of minimum wage earners are employed.
Sen. Warren's point was that there was no real reason why the minimum wage couldn't be raised to $10.10 or even a little higher, not that it be raised to $22 per hour. Taking her remarks out of context, implying that her argument is invalid through misdirection, and/or suggesting that she is advocating an economy-crippling minimum wage hike is simply misleading and untrue.
It's not a fair accounting. Just like it isn't economically fair that the average worker make only $7.25 per hour -- something Elizabeth Warren is attempting to rectify.