This week the Congressional Budget Office released a report discussing the potential outcome of an increase in the federal minimum wage. While the proposal would pull nearly 1 million people out of poverty and increase wages for some 24 million American workers, the only portion of the report Republicans would like to discuss is the possible 500,000 job losses.
Conservative voices like John Boehner, Paul Ryan, and Douglas Holtz-Eakin suddenly found value in this CBO report. This stands in stark contrast to their previous sentiment of this organization whose previous reports they said were just an "opinion," used "smoke and mirrors," and contained "budget gimmicks, deceptive accounting, and implausible assumptions used to create the false impression of fiscal discipline,"
Apparently, to these conservatives, the CBO is a deeply biased political organization -- except when its findings conform to Republican talking points.
Rather than have substantive discussions on how we can increase wages for millions of hard-working Americans without losing jobs, both sides will cherry pick the data they want to accentuate and dismiss the rest. This sort of tribal nature of politics is partly to blame for the lack of action in Washington these days.
All politicians should support getting working-class Americans a larger share of the profits they helped create. Data show that unions are a more effective method of achieving this result than minimum wage hikes -- but just last week in Tennessee we had Republican politicians willfully misinform their constituents in an attempt to use the power of government to pick winners and losers.
The reason unions are better at getting more appropriate pay and benefits for American workers than minimum wage requirements is because such requirements are a one-size-fits-all solution to a very complicated capitalist system. The union's goals are to help increase profitability for their company so that they can get higher pay and greater benefits for their members while simultaneously increasing their membership. This requires both sides to sit down at the bargaining table and negotiate a mutually beneficial agreement.
A government-induced increase in the minimum wage requires none of the analysis, discussions, or compromise that are at the core of a good, collectively-bargained union contract. Instead, it will punish some companies that have low profit margins or are still pouring money back into the company to grow.
Perhaps what both sides should consider is a flexible minimum wage proposal -- a system that uses the compensation for the members at the top of an organization to determine the minimum wage at the bottom. By tying the compensation of the management staff to that of the rest of the organization, these companies could still pay their executives tens of millions of dollars each year, but that level of compensation would trigger a minimum wage which would be significantly higher than that of a company that pays its top officials hundreds of thousands of dollars per year.
With this sort of a system, smaller companies that can't afford to pay their employees above the current federal minimum wage could continue to keep wages low as long as the executives don't take massive salaries and benefits for themselves. Should a company with 30 employees, all making minimum wage, really have a CEO that is taking home millions?
Maybe a system like this could work. Maybe it couldn't. But when you have two parties more concerned with debunking the CBO and scoring political points than finding new ideas to solve age-old issues, the electorate may be forced to make changes that we can all agree the politicians won't like.