Trump Eyes His Own Minimum Wage Increase

It’s a sign of how fast and how far to the Left the minimum wage debate has moved that hiking the federally mandated wage floor to $10 an hour is the moderate position.

It was less than two years ago that President Obama was pushing to increase the $7.25 minimum wage to $10.10. Now, Democratic nominee Hillary Clinton is committed to an eventual $15 minimum wage. Republican Donald Trump said this week that he would be open to $10.

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Conservative economists, who generally view a high minimum wage as a job killer, expressed disappointment in Trump’s latest position. Stephen Moore, distinguished visiting fellow at The Heritage Foundation, said backing a higher rate does not get Trump anything, politically.

“Fifteen dollars an hour in places in California and Washington State already have proven to hurt jobs.”

“If he thinks endorsing a $10 minimum wage is going to make this go away, they’ll just say $12 … You’re never going to outbid them,” he said.

Trump’s position has shifted on the issue. During one of the Republican primary debates, he said wages were “too high.” But he told Fox News host Bill O’Reilly this week, “Well, I would leave it and raise it somewhat. You need to help people and I know it’s not very Republican to say.”

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Pressed for a number, Trump said $10 an hour but added that the main focus should be on creating higher-paying jobs for the middle class.

“I don’t want people to be in that $10 category for very long,” he said.

But Trump also said states should have flexibility to set their own rates.

“You go with the states, that the states have the authority now to do that but there has to be a federal minimum wage,” he said.

Dan Celia, a nationally syndicated radio talk show host and the president and CEO of Financial Strategies Stewardship Ministries, said the country is too diverse for a one-size-fits-all high national minimum wage.

“He had it right the first time,” he said. “These decisions should be made by the states.”

Celia said there is a place for the minimum wage, and perhaps even a national increase. He said he would not want to see legal immigrants or low-skilled Americans working for $3 an hour. But he said there is a danger in raising it too high.

“Fifteen dollars an hour in places in California and Washington State already have proven to hurt jobs,” he said.

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Moore agreed that regional variation in the minimum wage, based on labor rates and the cost of living, is appropriate.

“If you had a $12 minimum wage in San Francisco, you can probably get away with it,” he said. “But it would do a lot of damage in Mississippi and Detroit.”

The nonpartisan Congressional Budget Office projected in 2014 that raising the minimum wage to $10.10 would reduce employment growth by about 500,000 workers. A Purdue University study last year concluded that a $15 minimum wage in the fast food industry would lead to higher prices for customers.

Richard Burkhauser, a professor at the University of Texas at Austin, said raising the minimum wage beyond the value produced by a worker will cause companies to adapt by cutting hours, hiring fewer workers, and automating functions previously performed by humans. He noted that a job that was common in the 1950s, elevator operator, now barely exists.

“It’s easy to mandate a minimum wage of $10 an hour, but it’s difficult to force employers to pay it,” he said.

Burkhauser said even some economists who support a modest increase in the minimum wage believe it would have a negative impact at the $15 level. He said he has firsthand experience with the impact of a high minimum wage. He spends part of the year in Australia, which has a minimum wage of 17.70 AUD. Restaurants often close on Sundays, he said, and most supermarket checkout lines are automated.

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Beyond the unintended consequences of reducing employment opportunities, Burkhauser said the minimum wage also is a blunt instrument for fighting poverty for a simple reason: Most minimum wage earners are not poor. Many are teenagers in middle-class families or second-wage earners.

“This is a very ineffective way of helping the poor,” he said.

A better way, he and Moore both said, is the Earned Income Tax Credit. That supplements the income of the working poor.

Moore said raising the minimum wage tends to hurt the people who benefit the most from it — teenagers, especially black teenagers, who most need to get the experience an entry-level job offers.

“If you’re going to raise the minimum wage, it’s so important that we have a teenage minimum wage of $5 or $6,” he said. “The most important thing we need to do is get young people into the workforce.”