Santorum favors modest increase to minimum wage

When CatholicVote endorsed Rick Santorum for President in 2008, libertarians and economic conservatives would recount all the votes Santorum had cast which violated strict free-market principles (like increases on the minimum wage.) No concessions were ever allowed for the fact that he represented the blue collar state of Pennsylvania.

So his latest interview with Chuck Todd where he backs another rise in the minimum wage (and says the Senate Republicans are unwise to offer no alternative) is sure to get libertarians and economic conservatives upset once again.

Santorum’s suggestion of keeping the minimum wage at the same historic level of the marketplace (7% of workers) seems reasonable, as that would limit the negative consequences of the minimum wage. (Unlike Seattle’s radical experiment of a $15/hour minimum wage.)

Economic conservatives and libertarians would likely note that any legislation which increases the cost of low-skill labor will almost surely increase unemployment — and this will disaffect the poorest of the poor (and disproportionately youth, blacks, and Hispanics.)

I don’t disagree with any of that. I think the minimum wage is one of the worst ways to help the working poor. Yes, the minimum wage will help some who remain on the job, but if the minimum wage is raised too fast it will do damage as businesses find alternative ways to provide services (like kiosks for ordering fast food).

I think the better and more immediate way to help the working poor would be to fix the payroll tax, which starts taxing everyone at their first dollar at 15.3%. Wouldn’t it help the working poor more if we applied the same personal and child exemptions and deductions that we do for income taxes on the payroll side as well? That way a family of four would only start paying that 15.3% payroll tax after they surpassed the $28,200 income threshold. (The employer pays half of the tax, the employee pays half. But this is an accounting gimmick as any tax on payroll increases the cost of hiring a worker.)

And I think it’s important to advance proposals similar to this as a better way to help the working poor. But that said, we should not give Rick Santorum (or other Republicans from blue states) a scarlet letter for supporting a modest increase to the minimum wage.

Santorum understands the arguments against the minimum wage. But he also understands that we live in a representative republic. As Santorum noted, a supermajority of Americans support the minimum wage. Unlike abortion or marriage, support for a minimum wage is not a violation of Catholic teaching. (In fact, you’re far more likely to find Catholic teaching which would be supportive of it.) So attacking a politician who votes for the minimum wage (which has 76% approval) is bit foolish.

This isn’t to say that I support a possible Rick Santorum presidential campaign in 2016. (I’m partial to Pence, actually.) I’m just saying that until the American people have a better understanding of the economics of how the minimum wage can be counterproductive, a candidate’s support for a modest minimum wage should not be a mark against him.

The current minimum wage is $7.25/hour. Harry Reid and Senate Democrats want to raise it to $10.10/hour — nearly a 40% increase. I certainly think that would be harmful — as it would cause serious job losses. I would suggest a more modest increase to $8.00 and I’d also tie it to inflation, so that it doesn’t become a political football ever four years. As a concession for adjusting it to inflation, Republicans could demand that the $1,000 per child tax credit also get inflation-adjusted increases every year.

And let’s all keep an eye on Seattle.

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Categories:Economy

9 thoughts on “Santorum favors modest increase to minimum wage

  1. Kurt says:

    The Canadian system seems to have some merit, which also gives Social Security credit for stay at home moms.

    But any reduction of the FICA social insurance premiums needs to still give credit as if paid for Social Security, Disability, Medicare and Unemployment insurance. Otherwise, they folks are losing out. And then the lost revenue to the Social Security Trust Fund needs to be made up, probably by taxes on the rich. This proposal needs serious fleshing out.

  2. Tim says:

    Why don’t you encourage businesses to adopt a Christian attitude and willfully extend all wages without laying people off? I am absolutely amazed that a Catholic commenter such as Rich would even contemplate not doing everything to help everyone else in addition to the working poor. Give me an example of any other product in the world where you arbitrarily raise the price and its quantity demanded is not reduced. Do Rich and other minimum wage advocates complain when gas prices rise?

    Santorum, and everyone else who knowingly advocates error (such as the belief that the minimum wage helps the people it is intended to) deserves a scarlet letter. Paint me an economic conservative or libertarian, but it is undeniable that the minimum wage helps a very minor few at the expense of a very great many. But, the law says it’s supposed to help, and Catholic Social Doctrine (and doctrinaire Catholics who don’t look past a law’s name to see its actual effects) is there to stamp its economically antiquated imprimatur.

    1. Joshua Mercer says:

      But there is no serious proposal before Congress to eliminate the minimum wage. So if we think it’s destructive (mildly or strongly), we are faced with trying to mediate its negative effects as best as we can until the political environment changes. The Senate Democrats are trying to push their proposal in order to rally the American people to their side. They might not win the House in 2014 on the issue, but they might maintain the Senate because of it. It’s not that Santorum is offering his proposal because he thinks it’s good, it’s that he is offering a compromise in order to reduce the damages. It’s a defensible position given the realities.

    2. Mason says:

      Try running a successful campaign on that platform. You are advocating for a politically disastrous position. Republicans seem to be wisening up to that fact as well, as Mitt Romney now too came out in support of a modest increase to the minimum wage. Other big name Republicans will be following suit soon.

      1. Tim says:

        Well, I guess it’s better to be elected than to be correct. At the risk of being redundant: http://www.catholicvote.org/minimum-expertise/
        But hey, if Santorum and the rest can be happy knowing that their politically nondisastrous positions are putting minorities, inexperienced, and young workers out of work, for no good reason, then I don’t want facts to get in the way of happiness or electability.

  3. morganB says:

    I am still encountering nebulous terms… “working poor”, “pro-life/pro-choice” , etc.

    From all I have read it appears that there is no limit to the number of minors that can be claimed using the child tax credit. I have a relative who has been married three times and has accumulated 9 children from those encounters. Then there is the young mother who has slept with many men some of whom produced her 7 illegitimate offspring. If ever the tax code needed revamping, it’s now.

    In addition to a dollar limit for child tax credits there needs to be a responsibility, (number of children limit).

    I won’t go into the pillar of Republican politics, (corporate tax loopholes), but it continues to intrigue when huge companies like GE, Verizon and Boeing pay no Federal income taxes for years on income in the multi-billions. Go figure!

  4. James Maney says:

    With regard to changes to the FICA tax {erroneously called the payroll tax}, the US could emulate the way Canada taxes its residents for the Canada Pension Plan, their equivalent of Social Security. They tax employer and employee equally as we do, and they have a ceiling on wages taxed, as we do. However, they also have a floor under which no CPP tax is imposed on either party. Currently and for a number of past years the first CAD 3500 of annual earnings {equivalent to USD 3173 today} are free of tax, thereby greatly mitigating the regressivity of the tax.

  5. Rich says:

    Why don’t you encourage businesses to adopt a Christian attitude and willfully extend a minimum wage increase without laying people off? I am absolutely amazed that a Catholc site such as this would even contemplate not doing everything to help the working poor.

    1. Brian says:

      I’m not sure how this article is not attempting to help the working poor. Mr. Mercer is stating that a mandatory increase to the minimum wage of nearly 40% would hurt the working poor and that a modest increase would be less likely to do so. I’d say this article does support the working poor.

      Sure, encouraging companies to willfully increase their miniumum wages would great, but if companies were willing to do so, why have they not already done it? My guess is that those which are willing are not the ones that would be affected by such a raise – Hobby Lobby, from what I have read, comes to mind as one that regularly pays higher than the minimum. They may even pay higher than the proposed minimum, although I’m not entirley sure of that.

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