Chris Christie Is In The Minority On Minimum Wage

chris christie minimum wage

Yesterday, New Jersey Governor Chris Christie did two things that surprised no one: He went to a Springsteen concert and he shot down the NJ legislature’s attempt to raise the statewide minimum wage to $15.

What do these two things have in common? Both Springsteen and raising the minimum wage are very popular with The Common Person. And while Governor Christie appears to be on the right side of history with his love of the Boss (he claims to have seen the man in concert over 100 times), he’s swimming upstream in his opposition to an increased minimum wage.

Chris Christie knows all the words

A video posted by Luc Cohen (@luccohen92) on

In his statement about the decision, Christie cited speed of the increase—to $15 over five years— as his reason for vetoing the bill, stating that it “fails to consider the capacity of businesses, especially small businesses, to absorb the substantially increased labor costs it will impose” adding that it would be responsible for “killing jobs and erasing gains of more than 275,000 private sector jobs since 2010.”

Aside: He said “killing jobs”! Do a shot!

The New Jersey business community immediately rushed to express support for the decision; the New Jersey Business & Industry Association agreed with Christie, calling the proposed increase “too much, too fast.”

Which is basically exactly what business leaders always say—whatever you propose, regardless of the phase-in period or any other considerations, it’s too much and it’s too fast.

How much of a minimum increase would be just right? That’s a little harder to pinpoint (since, you know, trickle-downers are pretty slippery) but thanks to leaked polling from this spring, we know that the support—even in the business community!—is definitely there80% of respondents to a survey for business owners said they supported an increase to their state’s wage.

If business owners are anything like regular people—and let’s assume they are, since that’s what they always tell us—they probably support a minimum wage of at least $12 or more, depending on which polling you look at.

For literal decades, a majority of Americans have stated that they support raising the minimum wage—and the degree of the increase has been going up and up over time.

A 2013 Gallup poll found that over 70% of Americans supported an increase to $9 per hour.

“Raising the federal minimum wage is typically a crowd pleaser when it comes to policy prescriptions, and Obama’s proposal to push the rate from the current $7.25 to $9 is no exception,” wrote Gallup at the time. “The 71% vs. 27% balance of U.S. public opinion in favor of passing it is convincing, particularly when considering that even half of Republicans are in favor.”

Just one year later, a Pew poll reported that 73% of respondents said they’d support $10.10 per hour (which is just slightly more than findings from a Rutgers poll which looked just at New Jersey voters).

A Rasmussen poll from this year found that 71% supported an increase of over $9.50, and 59% want at least $12.50. That poll also found just 12% support for a full $15—but in the same month, a HuffPo/YouGov survey was released which reported that 48% of respondents supported $15.

Which is to say: Public support for increasing the minimum wage has been strong for years, and as income inequality increases and the poor get pushed further to the margins, the voting public is looking for something more sweeping than just $9 or $10.10. Within a few more years—like, around the time that California, New York, and Oregon’s wages hit their full peak—it’s not unlikely that the majority of supporters will get behind wages of $13.50 or more.

Hell, even Christie’s #MCM political ally, Donald Trump, recently switched his position ever so slightly to propose a slight increase to the minimum wage. Why? Because Trump knows how to please people, and this is what the people want.

And while most the people may not be quite on board with a federal $15 yet, that’s kind of what state and local lawmakers are for—to do things that are future-thinking and will go down in the history books as good things that helped people right at home.

Christie may think he’s pleasing the business community with this vote, but when voters in New Jersey head to the ballot with an increase (which they’ve pledged to do, much like Maine, Washington, Colorado, and Arizona), it seems like he may realize just how wrong he is on this issue.

Daily Clips: August 31st, 2016

Why is Mexico’s president sitting down with Trump? I’m surprised Barry O hasn’t picked up the phone and called President Enrique Peña Nieto. Why is he inserting himself into American politics? It really doesn’t make sense to me. The Atlantic‘s conclusion is probably the closest to the truth:

The visit confirms an essential truth about politicians: Unpopular leaders will try all sorts of risky maneuvers to improve their standing.

Democrats really might have a shot at taking the House: Vox’s analysis indicates that if Hillary Clinton wins by 6 percentage points that victory would put 50 Republican-held House seats in play.

Why is hatred of government most intense among people who need government services most? This is the central question of Arlie Hochchild’s new book, Strangers in Their Own LandShe travels to Louisiana and there she talks to “people who identify with the Tea Party and its implacable hostility to ‘big government.'”

Share buybacks are down: Some intriguing facts here.

U.S. company stock buybacks are down 21 percent in the first seven months of 2016 compared to the same period a year earlier, according to TrimTabs Investment Research, a fall driven in part by five consecutive quarters of year-over-year earnings declines among S&P 500 stocks.

Tweet of the day:

No, Paid Sick Leave Isn’t “Government Intervention”


Bloomberg View usually offers economics-heavy reporting with right-of-center viewpoints. Today, Tyler Cowen continued this trend. He takes issue with Hillary Clinton’s chief economist, Heather Boushey, and her reliance on government-mandated solutions.

After reading Boushey’s “thoughtful and intelligent book” (buy it here), Cowen believes she has some troubling remedies for rebalancing the work-life conflict. He thinks her policy proposals, like “paid sick leave, paid parental leave, subsidized child care and better care for the elderly” are “an extensive set of government interventions.” (In the interest of full disclosure, Heather is a friend of Civic Skunk Works and has appeared on one of our podcast episodes.)

Think about how Cowen frames these, let’s be honest, pretty generic policies. Interventions. Just reading it makes me think of a greedy government bureaucrat coming for my private property.

But how can someone genuinely call policies like paid sick leave an intervention? If you were to say that in any other developed country, you’d be laughed out of the room (as we pointed out in our latest podcast — listen to it!). These interventions are merely acts by government to fix problems that the free market hasn’t touched. That’s what FDR addressed with the Fair Labor Standards Act, where he intervened and imposed dreadful policies like the minimum wage and limiting child labor.

Just like then, it’s not as if Americans today haven’t given the market enough time to deal with these issues. The market clearly just doesn’t care. How else can you explain why 40% of private sector workers don’t have access to paid sick leave?

Note to Cowen: sometimes the government needs to set a minimal standard so that the market cannot continue to undermine the best interests of our society.

Whereas Cowen thinks Boushey “holds too much faith in mandated and centralized solutions,” the same can be said for Cowen and the free market. He claims that policies, like paid sick leave, can be resolved by “the alternative mechanism, which for all its imperfections is far more flexible: let companies and workers make such decisions through employment bargains.”

Here, Cowen makes the (basic) mistake of assuming that companies and workers are on an even playing field. If this were true, then yes, perhaps that would be the best way of negotiating labor rights. But if history serves as any guide, businesses hold asymmetrical power over their employees and will fight tooth and nail to halt any progress. (See slavery, child labor, overtime, weekends, minimum wage, health and safety, and now, paid sick leave). How can Cowen not see this? And as Mike Konczal points out

For what it’s worth, Matthew Yglesias also weighed in, saying:

The problem with Yglesias’ middle-ground alternative is that it’s just as unrealistic as Cowen’s reliance on the free market. Labor unions simply don’t have the power they once did to enforce new labor standards. Today, only 11% of American workers belong to a union. So in order to advance labor rights in the 21st century, the government must step-in and fill the void because the market is not budging.

The argument I’m putting forward is frustratingly simple. The invisible hand is not a magic wand that can solve all of society’s ills—just like government. Finding the appropriate balance between the market and government, uh, interference is the key to ensuring a prosperous society. I fear that Cowen, unlike Boushey, has failed to comprehend that basic truth. Until he does, Cowen will continue to see basic labor rights as intrusive measures and not what they truly are: rights.

Daily Clips: August 30th, 2016

Don’t be scared of a health-insurance public option: Noah Smith provides a thorough investigation of the public option, noting the good and the bad. One downside he focuses on, in particular, caught my eye:

A downside of government health care would be higher taxes. Currently, small business can claim a tax credit for giving their employees health insurance; if government took over, the effective tax rate on these businesses would rise.

That’s a good point and one I had not considered before.

Donald Trump’s tax proposals could double the trade deficit: What? You mean cutting taxes for our wealthiest citizens leads to a bigger deficit?

In defense of Chicago University: Jonathan Chait takes a long look at the variety of responses to  Chicago University’s “safe spaces” letter. He does an excellent job of questioning people on his “own political team”, as he puts it.

Amazon is looking at 30-hour work weeks: It will be interesting to see if this experiment works out.

Tweet of the day: 

Daily Clips: August 29th, 2016

Trickle down is on its way to history’s dustbin: So tax cuts for the rich, deregulation for the powerful, and wage suppression for the 99% aren’t winning the economic battle anymore. That much is clear. And that’s great. But what is filling the economic void in America? According to Felicia Wong and Dorian Warren:

The emerging progressive economic agenda, which calls for rebalancing power at the top, strengthening our labor market by creating strong floors of standards and greater access for the most vulnerable workers at the bottom, and investing in public goods and economic security through a more robust role for the state, is the antidote to neoliberal tax-cutting.

Solid US consumer spending boosts prospect of Fed rate hike: US consumer spending increased for the fourth straight month. An interest rate hike looks more and more likely, as a result.

The snooze economy: Gotta say, catchy headline there, Robert J. Samuelson. His analysis is less praiseworthy, but its always intriguing to see how right-of-center thinkers view the economy. I like how he points out that “if you’re not confused [about the economy], you’re not paying attention.”

Tweet of the day:

Daily Clips: August 26th, 2016

Want economic prosperity? Go to a Democratic state: An excellent overview from the NYT on economic indicators of individual states. Here’s one of their conclusions:

Red states dominated by Republicans embrace cut and extract. Blue states dominated by Democrats do much more to maintain their investments in education, infrastructure, urban quality of life and human services — investments typically financed through more progressive state and local taxes. And despite what you may have heard, blue states are generally doing better.

Americans are embracing transgender rights: Wow – a recent poll found 72 percent of Americans favor laws that protect LGBTQ people from discrimination.

Most welfare dollars don’t go directly to poor people anymore: Ugh.

Yellen says case for rate hike has “strengthened in recent months”: I plead ignorance over whether or not this is sage judgement.

David Brooks is a moron: He lectures Clinton on her lack of “grace”, but doesn’t say a word about…oh, you know…the white nationalist representing his party. What the f*** is he thinking?

Tweet of the day:

Daily Clips: August 25th, 2016

The Federal Reserve needs new thinking: When the Wall Street Journal starts questioning the status quo, you know economic thinking is in flux.

Democratic women can take the Senate back: “In five of the seven states where Democrats have a strong chance of picking up seats, the candidates are women.”

The plight of the over-worked nonprofit employee: Here at Civic Skunk Works we feel quite strongly about overtime pay—by that I mean, we think it’s a basic labor right. Crazy, I know. Not everyone shares this view with us, however. Many nonprofits think they should be exempt from Obama’s new overtime rule. But that seems…odd. Listen to how a nonprofit veteran explains the situation:

Too often, I have seen the passion for social change turned into a weapon against the very people who do much—if not most—of the hard work, and put in most of the hours…Because they are highly motivated by passion, the reasoning goes, they don’t need to be motivated by decent salaries or sustainable work hours or overtime pay.”

Tweet of the day:

The Free Market Doesn’t Care If You Live or Die

Kind of fitting that the American Psycho loves tanning beds, isn't it?

Kind of fitting that the American Psycho loves tanning beds, isn’t it?

This Associated Press story about the tanning industry is so terrible you just have to stare at it for a second, slack-jawed:

Business owners around the country say the little-noticed 10 percent tax on tanning in President Barack Obama’s health care overhaul has crippled the industry, forcing the closing of nearly 10,000 of the more than 18,000 tanning salons in the U.S.

It’s like a hideous traffic accident, this thing. The unnamed reporter quotes a tanning salon owner from Kentucky with a sentence that is basically Trickle Down 101: “When I go to vote, I’m supporting candidates who are pro-business and who want less government involvement, less government regulation.” Uh-huh. So the tragedy of over-regulation is killing your business. Got it. But why is the mean old government targeting these brave entrepreneurs? What does Obama have against innocent small business owners?

The story buries the lede way down in the fifth paragraph: “The American Cancer Society Cancer Action Network says those who use tanning beds before age 35 increase their lifetime risk of melanoma, the deadliest type of skin cancer, by 59 percent.” That is a staggering figure. Not even cigarettes claim that kind of cancer rate.

But could you imagine a similar story featuring cigarette manufacturers complaining about rampant government intervention? Of course you can’t, but that’s because we’ve passed a tipping point—in modern American society, smoking is no longer widely acceptable. Our leaders made it so cigarette manufacturers couldn’t advertise to children, our governments taxed cigarettes, they made smoking indoors in public spaces illegal, they funded studies to explore the health impacts of smoking. It was the work of multiple generations of leaders, and it will save millions of lives in the long run.

Could you imagine a libertarian free market solution to smoking? Or what our nation’s health would look like if we allowed the invisible hand of the market to decide the fate of tanning salons? Without the Affordable Care Act’s tax on tanning beds, without local laws banning teenagers from using tanning beds, what are the odds that young Americans—a group that, I note as a former smoker, is famously bad at making healthy choices—would suddenly turn away from the tanning industry en masse?

This is when people start dragging “freedom” into the conversation to muddy things up. You can argue all you want that the Founding Fathers wanted us to be free to tan ourselves to melanoma-town, but I would argue that the freedom to make uninformed choices in an environment where unregulated industry has a bottomless well of money with which to persuade public opinion is no kind of freedom at all. In fact, given that government tends to enforce public-health solutions that extend the lives of the general population while industries like cigarette manufacturers and tanning salons tend to extract profits from people until they die at a young age, I’d much rather choose the freedom of a long life.

And of course, the tanning industry doesn’t pay the medical bills of those afflicted by skin cancer—we do, in the form of increased health insurance premiums and Medicare payments. So for many years, the true cost of tanning salons were protected from the free market by government nonintervention. In effect, without that tax we were all subsidizing the tanning industry’s impacts.

All of which brings me to EpiPens. Matt Novak at Gizmodo writes:

EpiPen, the life-saving allergy product, is now a $1 billion a year business for Mylan, a drug company that’s currently enduring a wave of bad publicity over the extraordinary surge in EpiPen pricing. In 2007, an EpiPen cost about $57. Today that price has skyrocketed to over $600—all for about $1 worth of injectable medicine.

In the last eight years, Ben Popken at NBC reports that Mylan’s CEO gave herself a raise “from $2,453,456 to $18,931,068, a 671 percent increase.” This is your free market at work, people. A highly profitable lifesaving allergy medication was deemed to be not profitable enough. And in true trickle-down fashion, those profits then climbed all the way to the top of the company…and stayed there.

The EpiPen story is a fascinating one because it debunks a couple of conservative free-market claims. Mitt Romney famously argued that the free market was terrific because “corporations are people,” which he later interpreted as meaning that investors in corporations are people. He defined trickle down as passing from consumers to shareholders. Which entirely abandons the over half of all Americans who don’t invest in stocks, but that’s a post for another time. My point is that Romney’s style of trickle down is not an efficient system at all: Popken notes that Mylan’s “stock price more than tripled, going from $13.29 in 2007 to a high of $47.59 in 2016.” If I were an investor in Mylan, I’d be pissed that the CEO was proportionally hoovering up way more profit than me.

Further, conservatives claim that the invisible hand of the free market is the most efficient tool to establish prices and distribute innovations. Not so in this case! The free market has instead ratcheted up prices of EpiPens to an unreasonable level, and it has effectively removed EpiPens from a portion of the population that could previously afford them. It has made the American people more unsafe, and it has funneled profits to a tiny portion of the population at the expense of the general public’s health.

The funny thing about free market arguments is that they’re always so clean and crisp when you’re talking about apples or widgets or other hypothetical products. But when you incorporate them into the real world—into industries that have real, moral effects on actual human lives—the free market arguments stop making sense. In fact, they careen into absurdity. In the real world, economics is a matter of life and death, and dorm-room Ayn Rand philosophizing is more than just annoying—it’s downright irresponsible.