Ehrlich on Washington column, May 12, 1996

NEWS FROM Robert L. Ehrlich, Jr. Second Congressional District of Maryland 1407 York Road, Suite 304 Lutherville, Maryland 2 1 093 315 Cannon House Office Building Washington, D.C. 20515 EHRLICH ON WASHINGTON Week of May 12, 1996 By Congressman Robert L. Ehrlich, Jr. RAISING THE MINIMUM WAGE: GOOD POLITICS, BAD ECONOMICS In 1994 President Bill Clinton refused to back an increase in the minimum wage, calling it “the wrong way to raise the incomes of low-wage earners.” Two years later— and with a presidential election a few months away— President Clinton abruptly changed his mind. Liberal Democrats— with strong backing from big labor bosses— have suddenly begun to champion an issue they ignored when they controlled both the presidency and Congress. They insist that raising the minimum wage is vital to the interests of “working families.” Unfortunately, the debate now raging in Washington has more to do with election year politics than improving the lives of working Americans. Look past the rhetoric, and you will see that raising the minimum wage is a bad idea for several reasons. First, and most importantly, a minimum wage hike will harm the nation’s poorest workers— the very people it is supposed to help. Labor, like any other commodity, is subject to market forces. Raising the cost of unskilled labor will decrease demand among employers. In other words, marginal workers will be thrown out of work because businesses can longer afford to pay them. The minimum wage proposal supported by the liberal Democrats and the national AFL-CIO will cause nearly 400,000 people, many of them minorities, to lose their jobs.