There’s been a lot said on the prospect of increasing the minimum wage in Saint Louis. A lot of that has come from Show-Me Institute researchers. However, an interesting perspective on raising the minimum wage comes from Nahuel Fefer, the newly hired Special Assistant to the Mayor for Policy and a recent graduate of Washington University. He testified (testimony starts at 1:20:28) before the Ways and Means Committee the day after I did and he raises some points that are worth discussing.
It appears from the testimony that Mr. Fefer supports raising the minimum wage. The first thing to notice when listening to his testimony is that a lot of it simply relates to the number of workers making below a certain wage level. For example, Mr. Fefer says that 44 percent of the workers in Saint Louis City make less than $15 an hour and 14 percent of workers make the minimum wage or less. Even if Mr. Fefer’s numbers are correct, and for the sake of argument, let’s say that they are, these statistics don’t tell us a whole lot. A key point people need to understand in discussing the minimum wage is that people who earn low wages aren’t necessarily in poor households. A man working as a greeter for $9 an hour at Wal-mart might be an upper-middle class retiree who just wants to stay active. Of course, he might not be, but Mr. Fefer’s statistics don’t tell us one way or another. This information is useful in that it captures the raw number of workers who could see pay increases, but nothing much beyond that.
A bigger problem with Mr. Fefer’s testimony is that he overstates the evidence in support of his position. Mr. Fefer states, “The theory that raising the minimum wage results in job loss has been proved wrong in just about every case.” That’s simply inaccurate. One can point to several studies that show that raising the minimum wage does harm employment.
The minimum wage is certainly a contentious issue. Voices on both sides should be heard and given due consideration. However, it is important that any information which is presented to the public is put in the proper context and any errors are corrected.