WESTCHESTER COUNTY, NY — July 1, 2019 — Oren M. Levin-Waldman, is a Research Associate at the Shoresh Institution for Socioeconomic Studies in Israel in addition to being a Research Scholar at Global Institute for Sustainable Prosperity. He delves into the issue that “Progressive Politicians Still Don’t Get It: It Really is About the Middle Class By Oren M. Levin-Waldman on Wednesday, July 3, 2019, on the Westchester On the Level broadcast heard from 10-11am EST.
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Progressive Politicians Still Don’t Get It: It Really is About the Middle Class By Oren M. Levin-Waldman
All of the candidates vying for the Democratic Party nomination are for an increase in the minimum wage. They reflexively support it because as a matter of progressive politics it will assist the working poor. Moreover, if many of the working poor are also minorities, particularly women of color, then a $15.00 an hour minimum can fit into identity politics. Therefore, the minimum wage is to be supported because it helps the poor, it will benefit minorities, and it is a progressive thing to do.
If we follow the logic of this, those who oppose a $15 an hour minimum because they subscribe to the economic orthodoxy that it may have harmful employment consequences are simply not progressives. And yet, one wonders what would happen if opponents could point to good scientific evidence that a $15 an hour minimum really would harm the economy? Science which should always be relied upon when it comes to climate change and green energy policy should now be discounted because it is contrary to their progressive ideology?
Fortunately for progressives much of the new data on the minimum wage does not support the minimum wage critic’s position. And yet, in their call for a $15.00 an hour minimum, progressives continue with bromides that only demonstrate that they don’t really understand the issues. The minimum wage shouldn’t be increased because it will help the poor per se, although it will, but because it will help the middle class.
These same politicians will often note that the minimum wage has eroded in value. But blaming powerful business interests for its erosion because there has been opposition to it being increased, also demonstrates their fundamental misunderstanding of American politics. Yes, there are powerful interests arrayed against the little guy, as Elizabeth Warren and Bernie Sanders tell us. But that isn’t why the minimum wage has eroded in value.
The minimum wage continues to erode in value and it is the longest period of time that it has not been raised. A major reason that it has not been raised is that it is still presented as an anti–poverty measure as opposed to a middle class issue. As noble as helping the poor might be, that is not what will mobilize a majority of citizens to support the measure.
On the contrary, social policy in the U.S. has only achieved broad-based political support when it has been presented as a middle class issue. The classic example is Social Security during the 1930s. The Social Security Act of 1935 essentially created a bifurcated welfare state: a means tested public assistance program for the poor through the initial Aid to Dependent Children’s (ADC) program and the mandatory retirement savings entitlement commonly referred to as Social Security.
Social Security was always popular precisely because it was sold to the American people as a middle class entitlement. Everybody, regardless of their income, would get a retirement pension because they paid into it. The public assistance program, however, has never been popular largely because of a tendency to stigmatize the poor.
This too has roots in a distinction between the worthy and unworthy poor going back to the Sixteenth Century. The worthy poor, primarily widows, orphans, the disabled, and elderly were to be treated with compassion. The unworthy poor, able bodied individuals who were viewed as lazy or otherwise suffered from some moral defect, were to be treated harshly. In Sixteenth Century England, first time offenses for begging would typically result in a public flogging. A second-time offense could result in death.
To a certain extent, the Social Security Act of 1935 mirrored those assumptions. Public Assistance would only be provided to dependent children through their mothers. In the 1930s, it was the norm that children would best be cared for my their mothers staying home with them. If there was a father, he was to be put to work in a public job through the Work Progress Administration (WPA).
As social norms changed and more women entered the workforce, the dependent poor came to be viewed as able bodied unworthy of support. Consequently they were stigmatized. But because every worker was paying into Social Security, it was always considered an entitlement. The architects of Social Security well knew that it would only have a chance of being legislated if it was billed as a middle class program. Political Scientist Martin Gilens refers to this as “targeting within universalism.” That is, as much as a policy may be targeted towards specific groups, it still must have broad public appeal.
Those who put forth the minimum wage as but one of their economic policies would do well to couch it as a middle class issue. Because, as I have argued many times before in this space, an increase in the statutory minimum wage will through contour or interval effects result in wages rising through the distribution, an increase in the minimum wage will be beneficial to the middle class.
Middle class wages will also rise, and as they do workers will, through their increased purchasing power, be able to demand more goods and services in the aggregate. An increase in aggregate demand for goods and services is usually a recipe for overall economic growth and job creation. When “progressive” politicians fail to present the minimum wage as a middle class policy, they only show that they simply don’t get it.
On the other hand, maybe they do. After all, middle class policies may be confused with white blue-collar policies, and not specifically those that serve the reigning agenda of identity politics. That a rising tide may lift all boats, is simply besides the point. And yet, if this is the reason that they cannot make a middle class argument for raising the minimum wager, then not only do they really not get it but again they will fail to win an election. As electoral victories require running to the political center, they also require appealing to the middle class.
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Dr. Levin-Waldman is author of the following:
Restoring the Middle Class Through Wage Policy: Arguments for a Middle Class
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Understanding Public Policy in the United States.
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The Minimum Wage: A Reference Handbook
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Wage Policy, Income Distribution and Democratic Theory
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The Case of the Minimum Wage: Competing Policy Models
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Learn more at Dr. Oren M. Levin-Waldman’s website – https://www.econlabor.com/. The professor is a Research Associate at the Shoresh Institution for Socioeconomic Studies in Israel in addition to being a Research Scholar at Global Institute for Sustainable Prosperity. Direct email to email@example.com.