Why Not Index the Minimum Wage?

Len Burman of the Urban-Brookings Tax Policy Center spoke on the Marketplace Morning Show regarding the idea of indexing the minimum wage for inflation. That is, add a provision to the minimum wage law to make sure it adjust with inflation each year. After all, if we’re going to raise it anyway, why not have it automatically raised instead of having a big argument about it every ten years, an argument that clearly favors one political party. But while it might benefit Republicans politically to have the issue off the table since it only makes them look tightfisted, Scroogish, and downright mean whenever the issue comes up, that’s just it–it only benefits Republicans politically. There’s also the issue about what’s best for the country, whether it’s politically beneficial or not.

If the minimium wage were indexed it would indeed remove it as such a large issue every few years. This would benefit Republicans because the Democrats wouldn’t have a chance to make them look like they’re mean. Nevermind that raising the minimum wage has the potential to harm working families rather than helping theml. Whoever advocates giving money to those who earn the least has the chance to look like the good guy, those against it look like the bad guy, and unfortunately that’s as far as some people go when thinking about who to vote for. Indexing the minimum wage, which would appear to be a good thing for “the working poor who live on minimum wage,” will never happen under Democrat management, because it’s too valuable of an issue for them to lose by “fixing” it.

It would be entertaining if the Republicans really started pushing to index the minimum wage. All of a sudden the Democrats would be stuck on the other side of things. And if there’s no hope of getting rid of the minimum wage, perhaps that’s what Republicans should do. It wouldn’t do much more damage to the economy and families than it already does, but at least it would get rid of an issue that plagues them. But is it worth it to compromise principle for political gain?

At the risk of appearing the fool for believing that any politician would act on principle, might I put forth the idea that perhaps the reason Republicans don’t take the minimum wage issue off the table is because they believe it is fundamentally the incorrect thing to do? My personal opinion is that having a minimum wage hurts the country, hurts families, and getting rid of the minimum wage would be a boon to our economy to boot. But if we can’t get rid of it entirely, I’m glad it at least continues to be debated as to whether we should raise it. After all, if you let it alone for long enough inflation effectively gets rid of the minimum wage as wages affected by market forces rise above the government imposed minimum. Adding a provision to index minimum wage would be, in my opinion, the last nail in the coffin and would effectively remove the chance of getting rid of the minimum wage forever. If that means the Democrats get to use the issue as political ammo and the Republicans have to turn on the PR machine to look good I don’t care. I care about what’s best for the country, and the older I get the more I see that what’s best for the country is rarely in harmony with what is politically beneficial in the short term.