CONGRESS SEEMS likely to pass an increase in the minimum wage this year. The Republican leaders of both houses are opposed but resigned to the legislation, which they lack the votes to defeat. Rather than give the Democrats the issue in an election year, their inclination is to dispose of it now. They will sweeten the bill with tax breaks of comparable value to small business to offset the cost.
In the past, some opponents have tried to attach other conditions as well. Texas governor and leading Republican presidential candidate George W. Bush said in an interview the other day that he would support an increase in the wage if states were given the choice of opting out. Supporters of the increase say the second half of that position contradicts the first.
The arguments as to an increase are familiar; they have been pretty much the same ever since the wage was established. Opponents observe that many workers at or near the minimum aren't poor, but teenagers and other secondary earners in families that are relatively well-off. That makes the wage an inefficient device for aiding those at lower income levels, they say, the more so because an increase will cause employers to reduce employment of low-wage workers. Some critics go so far as to suggest that, on balance, an increase in the minimum hurts those it is meant to help.
Defenders respond that while many workers at or near the minimum may not be poor, large numbers of poor people also are at or near the minimum. They point to studies indicating that increases such as contemplated in this legislation have at most a negligible effect on employment. An increase in the minimum thus remains a highly effective way of transferring a significant amount of income to lower-income families and offsetting the disturbing trend in the society toward income inequality; so the supporters argue, convincingly, in our view.
They remind as well that much of the contemplated increase would not be an increase in real terms, but a catch-up to inflation since the last time the minimum was raised. That argument should have particular resonance this time around, because Congress has just -- rightly, in our view -- granted itself a long-delayed cost-of-living increase. The congressional raise of more than $4,000 a year is equal to about 40 percent of the annual earnings of a person who works full-time year-round at the current minimum; such a person will not earn enough to keep a family of three or more above the federal poverty line. Congress deserved its raise; so do those at the lowest income reaches of the economy.