The Wages of Carson
Indexing a Minimum Wage Makes Sense
Dr. Ben Carson has managed to stay near the top of the GOP polls without getting too specific about the policies he would propose as president. That changed in the GOP debate lthe other week when he embraced the idea of two minimum wages: a “starting” minimum wage for young people and a “sustaining” one for other workers.
This lower rate for the young is a nod to reality. Higher minimum wages hurt the young most because they generally have fewer skills. “How are young people ever going to get a job if you have such a high minimum wage that it makes it impractical to hire them” asks Dr. Carson.
Too bad he didn’t stop there.
Dr. Carson went on to endorse a higher minimum wage for everyone else, which he also says should be indexed so it increases automatically with inflation. When the Congressional Budget Office estimated in 2014 that increasing the minimum wage to $10.10 an hour by 2016 from $7.25 today would cost some 500,000 jobs. It wasn’t referring to young people. Lower skilled workers of all ages would be among the casualties. Dr. Carson would be better off applying his economic logic consistently.
National wage indexing would be even more destructive. Economic conditions and compensation differ across the country, so a wage floor of $10.10 in New York City might do less harm than in Mississippi. But raising the minimum everywhere according to a national price index could overprice low-skilled labor in areas that endure economic transitions or hardship. This would compound job losses in regions that are already hard hit, inducing more young people to leave.
Dr. Carson argued that indexing would mean “we never have to have this conversation again in the history of America.” But unions and the left will continue to try to raise the floor even if it’s indexed, as indeed they have in the past two years--first to $9 then $10.10 and now $15. The good doctor must really be new to politics if he thinks that capitulating to bad economic ideas will settle anything.