Redstate

As Dreadful As Even The Best Soap Opera

By Pejman Yousefzadeh Posted in Economy | Featured Stories — Comments (1) / Email this page » / Leave a comment »

It is bad enough that Congress and the Bush Administration are set to engage in feel-good policymaking and pass a minimum wage bill whose noble intentions are more than matched by the policy's inherent and fatal flaws. It is even worse, however, that certain powerful members of Congress--and doubtless, many of their followers--are set to do this without giving businesses tax breaks to match any federally mandated minimum wage hike (read on):

The Senate is expected to clear the way on Tuesday for an increase in the minimum wage that Democrats and some Republicans agree is overdue.

But the Senate's approval may not mean that workers will actually start receiving bigger paychecks in the immediate future.

The Senate bill differs from the one that cleared the House, and includes $8.3 billion in tax breaks for small businesses that Republicans and some Democrats say are necessary to offset the cost of the wage increase.

The House bill, which passed by a vote of 315 to 116, with 82 Republicans joining the Democrats, included none of those tax breaks. And Democratic leaders there have said they want to hold out for that kind of "clean" bill.

The question is how the leaders in both houses choose to reconcile the two approaches.

The first Senate vote will be on whether to limit debate on the measure, leading to a second vote -- and expected approval -- later this week.

Then, the Senate could hold on to the bill, leaving it to leaders from both chambers to work out the differences. Or, it could send the bill to the House, where the House could strip out the tax breaks and send it back to the Senate for a new vote.

Aides to some House leaders say they would be willing to allow some of the tax breaks. But others, including Representative Charles B. Rangel, Democrat of New York and the chairman of the Ways and Means Committee, are insisting that they will not concede any tax cuts.

Rangel's stance is appealing for many of his colleagues:

House Democrats say that by forcing a vote on a clean bill they would force Senate Republicans to put themselves on record as opposing a wage increase, which was a popular campaign issue in the midterm elections.

"We are still operating on the assumption or hope that the Senate will pass a clean minimum wage bill," said Stacey F. Bernards, a spokeswoman for Representative Steny H. Hoyer of Maryland, the Democratic leader. "If it doesn't happen, it's because a minority of Republicans held it up. It's their fault."

[. . .]

Senator Charles E. Schumer of New York, the No. 3 Democrat in the Senate, said he believed the Senate might go along if the House sent back a bill stripped of the tax breaks. "This is good cover for the Republicans," he said. "They're saying, `I'm not against a minimum wage increase, I just want tax breaks for small businesses.'

"But when the choice is yes or no because the House did something out of our control," he added, "I think we'll get more of them on our side."

To be sure, a number of Democrats--including Senate Majority Leader Harry Reid--continue to think that small business tax breaks will have to be a part of any minimum wage bill in order for the bill to pass Congress and be signed by the President. But the story makes clear that Reid will have to fight his fellow Democrats in both the House and the Senate in order for his views to prevail. And what if Reid cannot prevail? Will we have a minimum wage bill that is stripped of even the fig leaf of small business tax breaks? Is the idea to help the working poor or to send a completely objectionable bill to the President so that he is dared to veto it merely to give Democrats a campaign issue? Worse yet, will the President be intimidated enough to sign the bill? He hasn't exactly wielded that veto pen the way Arthur wielded Excalibur, after all. It is not unreasonable to think that he might capitulate to the Democrats; the pure, undiluted awfulness of the minimum wage bill contemplated by the likes of Rangel, Hoyer and Schumer notwithstanding.

Relatedly, it should be noted that there are a great many companies that have come out in favor of a minimum wage bill. Supposedly, these companies are enlightened, socially responsible and care more for their fellow human being than do the supposedly heartless corporate plutocrats of our age--not to mention their supposed toadies who occupy the halls of political power.

But this supposition is hogwash:

CEO's who support higher minimum wages are not, as the media often casts them, renegade heros speaking truth to power because their inner moral voice bids them be silent no more.  They are by and large, like Mr Sinegal, the heads of companies that pay well above the minimum wage.  Forcing up the labour costs of their competitors, while simultaneously collecting good PR for "daring" to support a higher minimum, is a terrific business move.  But it is not altruistic, nor does it make him a "maverick".  Costco's biggest competitor, Wal-Mart, also supports a higher minimum wage, and for the same reason.  Wal-Mart's average wage is already above the new minimum; it will cost the company little, while possibly forcing mom-and-pop stores that compete with Wal-Mart out of business.  This seems blindingly obvious to me.  Though I don't expect we'll see "the minimum wage--it's great for Wal-Mart!" in many Democratic campaign commercials.

Hey, that gives me an idea! We who believe that the minimum wage is well-intentioned but exceedingly poorly designed can argue that it ought to be defeated lest we lend a hand to the evil and pernicious Wal-Mart. Sure, there is a better argument against the implementation of a minimum wage increase and in favor of an alternative policy that will do much, much, much more to help the working poor, but no one appears to be picking up this argument and running with it. Not even Republicans; which is surprising, since this alternative policy had a Republican President as one of its strongest supporters.