Beyond the minimum wage

The conversation surrounding economic inequality in the United States has risen from its usual steady drone to a headline-grabbing roar in recent weeks. Unlike in 2011, when protest movements such as Occupy Wall Street acted as the main catalysts of the discussion, today the debate erupts from all sides of the issue.

Billboards in San Francisco decry the efforts to raise the minimum wage as a job-killer, while many around the country begin their “live the wage campaign.” Nick Hanauer, self-proclaimed plutocrat, warns his fellow .01 percenters that unless economic inequality is reduced soon, the proverbial pitchforks will come for them. Sen. Ted Cruz (R-Texas) continues to predictably denounce “job-killing minimum wage legislation,” while the Obama administration continues its equally predictable relentless barrage of advertising insisting that the current minimum wage is not a living wage.

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The minimum wage has been touted time and again as a tool to reduce income inequality, to level the playing field, so to speak. It has been countered each and every time with the argument, among others, that raising the minimum wage will inevitably hurt small businesses and drive up overall prices. There is a certain degree of truth to each side, but as of yet, one aspect of the debate has been glaringly absent. We are having the wrong conversation entirely.

The minimum wage debate has not only further polarized Congress and become distasteful to the American public; it is leading us away from tangible long-term progress on economic inequality. If we want to earnestly reduce economic inequality in this country, we must change the way we talk about economic change. Using terms such as “redistribution of wealth” and even “income inequality” too often end in conversations on “class warfare.”

Recently, the DC think tank Third Way released a study showing that while most people acknowledge there is a divide between “haves” and “have-nots” in this country, few people are keen on classifying themselves as have-nots (though a good amount of those surveyed statistically would be). Furthermore, even if most Americans acknowledge that the system works against the have-nots, they still believe that hard work pays off in the United States. As such, liberals, moderates, and conservatives alike prefer a candidate focused on economic growth as opposed to redistribution or economic security.  

Thus, while we all acknowledge that growing economic inequality is a serious problem for America, we continue to ineffectively debate a solution that polarizes the nation and propagates a notoriously dead-end conversation. Why? Although there are many reasons, the simplest explanation seems to be that the minimum wage is a basic, easily communicated, and historically entrenched solution to an otherwise complex problem. It therefore lends itself nicely as a talking point with which both Democrats and Republicans slam the other in an election season.

The equally viable, but uglier, explanation is that the minimum wage conversation serves as a proxy conversation for the deeper issues besetting our economy. By holding up the minimum wage as the standard bearer for economic reform, politicians on both sides of the aisle conveniently avoid the tough issues they are too afraid to tackle. Oft-repeated, tired arguments take the place of debates on subjects that could lead to economic growth and better resources for all.

Raising the minimum wage does not begin to address the increasingly apparent failures of America’s secondary education system, the alarming skills gaps in a burgeoning American tech industry, or the increase in corporate inversions, all of which are hemorrhaging money from the American economy. It diverts attention away from less alluring but much-needed policies on regulatory reform, tax reform, or modernizing government. Moreover, the minimum wage only reduces income inequality, while the greatest source of the economic divide, wealth inequality, goes unaddressed. By misleading the American public into believing that a minimum wage raise will adequately address the inequalities plaguing our society, Congress prevents us from engaging in the real battles for economic growth and equality.  

Framing the issue of economic inequality on the “inequality” aspect has clearly gotten us nowhere, and all signs point to no prospect of change in that regard. If we want to effect real change, we must not limit the conversation to the merits of a policy first implemented in 1938. Framing the conversation in terms of growth and innovation will lead to more constructive debates, and will even resonate more effectively with constituents across the socioeconomic spectrum.

The underlying societal and economic issues the minimum wage debate attempts to address are too complex for such a simplistic and out-of-date solution. We must instead debate policies that seek to better educate this generation of American children (note: a four year college may not be for everyone), to better prepare young Americans for the realities of the job market and the workforce, and to promote policies of investment and production right here in America. Though it may initially seem counterintuitive, we need to first recalibrate the way we talk about economic inequality in the United States in order to effectively address it.

I do realize that asking Congress to sacrifice (what appears to them as) a short-term gain for long-term prosperity is something of a pipedream. Even so, we as an American public have tolerated the inaction of this “do-nothing” Congress for far too long. The current scheduled recess will allow Congressmen and Senators to reconnect with their districts and refocus on important issues. As November approaches, many of their reelections hang in the balance. The minimum wage conversation in which we all currently participate continues to ask too little of Congress in the way of long-term growth and innovation. We deserve better solutions. If ever there were a time to ask our elected officials for more than the bare minimum, it would be now.

Jacob Humerick is a summer fellow at the Progressive Policy Institute and a student at Northwestern University.

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