The Minimum Wage Shows Why (and How) We Should Vote Today

It is time for the states to lead.

Every once in awhile in the history of this great country of ours, the federal government just can’t get the job done. Partisan gridlock, constitutional uncertainty, public distrust all play a role. But one of the great strengths of the American system is that the states — those laboratories of democracy, as Louis Brandeis called them — can act when Washington will not. Abolitionism, women’s suffrage, health care reform, gay rights: All started at the state level.

This is one of those times. Our national system is inert. Our national leaders are mired in the muck of inaction.

And yet there is hope. For today is Election Day, and on this day, we will elect 36 governors. This is no time to stay home when the polling places are open. This is a time to choose leaders who will act where Washington has not.

I can think of no better example of the choice we face as a country today than the minimum wage.

After World War II, Congress set the minimum wage at approximately half the average wage in the country. In today’s dollars, it was over $10 an hour. Earning the minimum wage, one full-time worker could support a family of three above the poverty line.

Today, the federal minimum wage is $7.25, less than 36 percent of the average wage. It’s so low that it can’t even keep a family of two out of poverty.

Unlike Social Security or Medicare payments, the minimum wage is not indexed to the cost of living. Only Congress can raise it. The last time they did so was 2009. Democrats proposed raising it again earlier this year, but the majority of senators opposed it.

The feds have failed to act. It’s time for the states to lead.

And we have ample evidence that they can. Twenty-three states already have minimum wages higher than $7.25. Five states — Alaska, Arkansas, Illinois, Nebraska, and South Dakota — have an initiative on today’s ballot to increase theirs.

But not everyone is onboard.

“I don’t think it serves a purpose,” said Wisconsin’s Republican governor Scott Walker last month.

“I don’t think as governor I want to be the cause of someone losing their job,” said Greg Abbott, the Republican candidate for governor in Texas, in explaining his opposition to raising the minimum wage. Pennsylvania’s Republican governor Tom Corbett made a similar argument when stating his opposition last year.

At least they pretended to know what they were talking about. When Republican Governor Rick Scott was asked what Florida’s minimum wage should be, he said, “How would I know?”

These men are on today’s ballot in four of our nation’s largest and most influential states.

And they are tragically out-of-step with the lessons of economic history. In a recent study, the economists Hristos Doucouliagos and T.D. Stanley survey the vast research that economists have done measuring the impact of the minimum wage in recent decades — 64 papers in total — and they find “little or no evidence” that minimum wage increases caused job losses.

On the contrary, raising the minimum wage is a clear boost to the economy. In another recent paper, the economist Arindrajit Dube found that raising the minimum wage significantly reduces the poverty rate, a finding that is consistent with the other 12 studies economists have published in recent years measuring the same effect in different ways.

Only a politician severely out-of-touch with the modern economy could think otherwise. Today’s corporations don’t have to cut back jobs when wages rise. They have to cut back profits, which are at an all-time high. In the long run, they might not have to cut back anything. Higher wages lead to higher productivity, better health, fewer strikes, lower turnover, and higher consumption, which in turn leads to more demand for their products and therefore higher profits.

Individual companies may not want to raise wages if their competitors won’t, but when everyone does it, everyone benefits.

Trying to save money by keeping the minimum wage low is like trying to improve your health by starving yourself. It’s classic shortsighted behavior, hardly the visionary leadership that we’d like to see in the governor’s mansion.

That’s why today’s election matters. In this age of do-nothing politics, it’s easy to despair, but we must remember the intent behind the design. The same founding fathers who created a federal system that resists radical change also created a state system that encourages experimentation. Today we celebrate their creation, and we direct its attention to the challenges of our time.

If the feds do not act, the states will. We the voters will make sure of it.

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This op-ed was originally published in the Huffington Post.

How We Stopped Investing in the Future: A Florida Case Study

In June 2009, ten Florida Congressmen sent a letter to the Department of Transportation, requesting over $2 billion from the federal government. They wanted to build a high-speed rail line, shuttling passengers from Tampa to Orlando and eventually Miami in only two hours. The money was supposed to come from the American Recovery and Reinvestment Act, the $787 billion “stimulus” bill that newly-elected President Barack Obama signed in February of that year.

Of the ten Florida Congressmen, three were Republicans, and all three had voted against the stimulus: Lincoln Diaz-Balart, Mario Diaz-Balart, and Adam Putnam.

This kind of about-face wasn’t unusual. Many Republicans were begging for a piece of the stimulus after they had tried to kill it in Congress. Even party leaders like Paul Ryan and Eric Cantor got in on the action.

John Boehner defended this contradiction by saying that the stimulus would fund “shovel-ready projects that will create much-needed jobs.” Only a few months earlier, he had been saying the exact opposite — and relentlessly trashing anyone who dared to disagree with him.

The Tampa-Orlando rail line really did fit Boehner’s definition. It was shovel-ready because almost all the land and permits were already lined up, and according to the U.S. Conference of Mayors, it would create 27,000 jobs.

Moreover, it was good fiscal policy. According to two separate reports, the project would produce an annual surplus of $31 million to $45 million by 2026 — and that didn’t include the much more profitable connection to Miami that was likely to follow.

And it was good environmental policy. High-speed rail emits far less greenhouse gas than cars, especially in densely populated regions like central and southeastern Florida, which is why overflowing cities in China, Europe, and Japan have surged so far ahead of us in this vehicle of the future. It saves time, money, and pollution. Unsurprisingly, it’s very popular.

Fifty years ago, this would have been a no-brainer. In the 1950s and the 1960s, politicians were dedicated to investing in new technology and staying one step ahead of the Soviet Union. It’s no coincidence that economic growth was faster and more widespread in those days.

Back then, the federal government spent 2.6 percent of the nation’s income on nonmilitary investment. In the last twenty years, it has averaged 1.8 percent per year. That difference of 0.8 percent may not seem like a lot, but it adds up to trillions and trillions of dollars that could have gone into research and development, education, and new infrastructure — and, if previous investments are any indication, would have yielded benefits many times higher than the costs.

As economist Eugene Steuerle put it, “We have a budget for a declining nation.”

On January 28, 2010, the White House granted Florida’s request. By December, the Department of Transportation had allocated $2.4 billion against a cost of $2.65 billion, and they promised to cover any cost overruns. Had Florida accepted the money, its workers would be laying rail for the Sunshine State bullet train at this very moment.

Instead, Governor Rick Scott rejected the deal, citing cost concerns that didn’t make much sense since the feds were on the hook for any losses.

Thus did the dreams of high-speed rail die in Florida. Thus do many dreams of the future die in the modern political arena.

In Tampa, there’s a street called Bayshore Boulevard. It’s the longest continuous sidewalk in the world. It’s a beautiful walk, with a balustrade that overlooks the water below. It was built in the 1930s by the Public Works Administration, part of the federal government’s response to the Great Depression. It’s just one of many breathtaking feats of construction that dot this great land of ours, each a reminder that, as Transportation Secretary Ray LaHood said during the high-speed rail fiasco, “We still know how to do big things in this country.”

I’d like to think that’s true. I’d like to think we still care about the future. I’d like to think we can build a better tomorrow. I only wish Governor Scott and his fellow ideologues felt the same way.

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This op-ed was published in today’s South Florida Sun-Sentinel.