Trickle-Up Economics

There's a good conservative argument for raising the minimum wage.

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Last week, legions of fast-food workers across the country demonstrated in favor of raising the minimum wage. They argued that the current $7.25 per hour is inhumane and not reflective of any kind of basic decency towards workers. It's a strong moral argument, one supported by the new Roman Catholic message from the new pope. But there's a conservative argument for hiking the minimum wage as well.

Some conservatives argue that an increased minimum wage (or any government-dictated wage at all, for that matter) is in opposition to the free market and an unfair burden on employers. Force companies to pay workers more, they say, and there will be less money to hire workers, increasing the unemployment rate.

[See a collection of political cartoons on the economy.]

There's some truth to that, but it obscures another factor: the low minimum wage ends up sending a $7 billion taxpayer-funded windfall to multi-billion dollar companies which refuse to pay workers a living wage. It's not a direct check, but it might as well be. According to a study conducted by the University of California Berkeley and the University of Illinois, low-wage workers collect $7 billion annually in SNAP benefits (commonly known as food stamps), Temporary Assistance to Needy Families, Medicaid and other help for the poor. We're not talking about the unemployed or the simply lazy; we're talking about people working hard, full-time, trying to get by on a wage that is simply inadequate to support even the simplest lifestyle.

The costs to society as a whole don't stop there. People who are working, but not even close to becoming middle-class, do nothing to fuel the economy. Our economy is 70 percent consumer driven, and much of the spending is done by middle-income people. That's why the $300 check former president George W. Bush had sent to taxpayers as an advance windfall was so effective – a rich person will just put $300 in the bank. But a poor person will buy food or pay an outstanding electric bill, while a middle-class American will buy a new television or put it towards a household appliance, helping not only the manufacturing industry, but the retail outlets whose fortunes are tied to that industry.

If we create a permanent, working underclass, we are depriving the economy of consumers who could buttress other parts of the economy. Paying people $7.25 an hour only ensures that mega-rich companies continue to make strong profits to support management executive salaries and stockholder earnings – all the while counting on the American taxpayer to pick up the tab for the shortfall to workers.

[Read Pat Garofalo: Why Fast Food Workers Are Right to Go on Strike]

And if illegal immigration is a concern, there's a strong argument as well for raising the minimum wage to stem it. Bush, in pushing (sincerely, but too late, sadly) for an immigration overhaul package, talked about new immigrants doing the jobs Americans "won't do. He was right, and since a very low-paying job might be appealing to a desperate person eager to make a life in the U.S. (not necessarily legally), it stands to reason that the more $7.25 jobs are out there, the more jobs will end up going to people without proper (or legitimate) working papers.

Pope Francis recently opined that "trickle-down economics has never been shown to work, that it's simply not true that that rich people, if given more money, will spread the wealth around with increased hiring. The reverse, however, is indeed true – that if we pay people abysmally low wages at the bottom of the economic scale, the depression will end up affecting those further up the economic ladder. If you can't muster a moral argument for paying people a decent wage, you can certainly find a selfish reason.

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