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$15 Minimum
Minimum Wage Hike Would Hit Manufacturing Hardest

There is no shortage of reasons to be skeptical of the intensifying push, now formally endorsed by the Democratic Party, to raise the national minimum wage to $15 per hour. This magnitude of such a hike is unprecedented; city-level $15 minimums have not exactly been roaring successes; restaurants could respond to a wage hike by automating more jobs; and the minimum wage movement, as currently constituted, is facilitating outrageous union malfeasance. And, of course, trying to set one national minimum wage is foolish policy when cost of living varies from place to place.

But if one more were needed, Adam Ozimek offers yet another compelling reason for concern in a piece at Moody’s: a $15 dollar minimum wage would be especially damaging to U.S. manufacturing, an industry that has recently started to make a small and fragile comeback.

Minimum wage debates typically focus on the service, hospitality, or retail industries, and it’s easy to see why: The majority of workers making under $8 per hour work in one of these sectors. An increase to, say, $9 dollars per hour probably would have the biggest impact on service and retail. But Ozimek argues that an increase of the magnitude currently being considered would also have a strong impact on the manufacturing sector. He crunches the numbers and finds that 35 percent of manufacturing workers—5.3 million people—are currently earning less than $15 per hour. “Lifting the minimum wage to $15 an hour”, he notes, “would not just be quantitatively larger than previous U.S. experience, but qualitatively different in that it would affect a different set of workers and industries.”

Moreover, mandated wage increases in the manufacturing industry could imperil more American jobs than wage increases in the fast food industry because manufacturing is more mobile, and more subject to the forces of global economic competition. Ozimek writes:

The potential for lost jobs is particularly acute given that many manufacturers face global competition. If wages become too high in one place, it’s easier for a manufacturer than for, say, a restaurant, to relocate operations. After all, the huge decline in manufacturing employment in previous decades is in part a warning about the unsustainability of above-market wages in a globally competitive environment.

Minimum wage increase or no, mass manufacturing can never reclaim the place in America’s economic life that it held 50 years ago—the economy has changed too much since the heyday of the blue model. Nonetheless, we’ve been thrilled to see the manufacturing industry pick up some steam over the last few years, providing a crucial source of jobs and income during a period of economic transition, especially in rural and suburban areas. The $15 dollar minimum movement is a good way to send even what’s left of manufacturers packing, and stop the recent uptick in American manufacturing. It’s ironic that it has the blessing of a party that has made restoring manufacturing a key part of its platform for decades.

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  • rheddles

    You clearly don’t understand the importance of social justice. The Republican party should show its understanding by proposing a $20/hr minimum wage. See how many donkeys will back that.

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    • Kevin

      How about $25/hour, but only in those districts whose congressmen and senators vote for it.

      • FriendlyGoat

        How about $40/hour, but only for wages earned by illegal immigrants, started 30 years ago and enforced by IRS and DOL.

        (Since we’re throwing out silly hypotheticals, why not one that would have actually prevented a big problem.)

        • rheddles

          There’s nothing silly about my proposal. Unless you think the $15/hr is silly also.

          • FriendlyGoat

            Well, there is $15, $20, $25 and $40 here. You can decide where the silly line is.

          • rheddles

            Why is there a line? Either they are all silly or none is silly.

          • FriendlyGoat

            Well, I don’t think $15 is particularly “silly”, even if a tad (just a tad) unrealistic, We probably should really be doing $12-13. in a jump from where we are. The past of holding it unrealistically low, with adjustments always belated and in that fifty-cent range that the business community finally “compromises” on is leaving too many people getting further and further behind.

            As for Republicans proposing $20, as you suggested, do you have any notion of how to get them to do that?

          • rheddles

            Why is $15 unrealistic? Why should we be doing $12-13?

            The republicans are the stupid party. There is no way to to get them to understand how proposing a MW of $20 demonstrates how silly the MW of $15 is and how silly the idea of MW is.

            The minimum wage is and always will be $0.00/hr. That is what unemployed people earn. By setting a minimum wage above that level you are saying that people whose marginal productivity is below the minimum wage should earn nothing. What a heartless thing that is. Everyone should have the opportunity to earn whatever they can contribute. There is value and dignity in working, however little one earns, But minimum wages deny people that dignity and the first step to improve their situation. Instead you sentence them to employment outside the law or welfare.

          • FriendlyGoat

            I’m sure you believe your last paragraph. I don’t—–for reasons of practicality in the real economic world. We do not want desperate people auctioning themselves and their services all the way down to the lowest levels for benefit of corporations. Neither do many, many other countries which also maintain various minimum wage schemes.

            As for getting Republicans to somehow propose something in jest for the benefit of discouraging others’ ideas——-yeah, it really is silly.
            I guess that’s why they haven’t thought of it.

          • rheddles

            And I’m sure you believe what you write. I don’t—–for reasons of practicality in the real economic world. The people we are talking about don’t work for corporations. They could work for convenience store owners, small businesses, restaurants. They could learn the skills of showing up on time, putting in a full day of work, getting a better job after a few years. But because they can’t get a job in the legitimate business community they are forced into a job in the illegal underground, usually criminal, economy. One arrest and they are marked for life as a criminal.

            Why is $15 unrealistic? Why should we be doing $12-13?

            Think about it.

            We need to be making everyone a productive participant in the economy. And if their wage isn’t enough to live on, that is what the EITC is for. No one should be denied a job and no one should be denied a decent income.

          • FriendlyGoat

            Glad you finally came around to some sense.

            You HAVE hit on how to get Republicans to do $20—- via the EITC.
            It’s a brilliant idea they have not imagined. Please go tell ’em—–and get back to me on their reaction, okay?

          • bannedforselfcensorship

            Do you hire anyone in that wage range as part of your business?

            Also, most jobs already pay more than the MW.

            And different regions have much lower cost of living. A national minimum wage is stupid. It just makes people feel like they are caring and kind, but with other people’s money. Pure fluff.

            A national minimum wage increase should be as dumb as Mexico paying for the wall.

            But its not because we all care so much and want to help poor people. So we believe in stupid ideas.

            Again, city by city MW might make some sense – a national one covering San Francisco and Coon Holler, Arkansas makes zero sense, except as a voter getter.

          • FriendlyGoat

            I would not argue against the idea of different minimum wages for different geographical areas, for different ages (such as teenagers) and maybe even for different industries or types of work. Some countries have much more “complicated” arrangements than ours and there is nothing wrong with that, depending on the reasons considered.

            I WOULD want those variables done from the federal government in one program (not states or localities), though, because local politics should not control the process. Too many places would not do anything, after all, AND local elections should never be about who wants to raise the minimum wage and who doesn’t.

          • FriendlyGoat

            Sorry. Can’t agree. “Leave it to the states” didn’t work for ending slavery and it doesn’t work for any decent social progress of any kind.

          • richard40

            I prefer to let the free market decide where silly is. But if you cant bear letting the market operate, at least leave it to the states, since each state has a different cost of living, and thus differing wage needs.

  • iconoclast

    The only manufacturing Democrats truly support is the manufacture of artificial grievances for favored identity groups. Too bad we cannot export those to our competitors or even enemies.

  • Rick Caird

    The proper minimum wage is $0. Today employment situation report showed The Not In Labor Force number went up by 1.3 million last month. At the same time the actual number of employed people, by the Household Survey, went down by 494,000. These are not good numbers.

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