The Racist Senator from Iowa

Senator Tom Harkin of Iowa says that it’s “just goofy stuff” to suggest that raising the minimum wage will lead to more unemployment.

“That’s nuts. That’s just goofy stuff,” the Iowa Democrat said Friday, in answer to a question.

“It’s been estimated that by giving 28 million Americans this kind of a raise, that it will stimulate the economy, provide more jobs, and have GDP growth,” he countered.

Harkin co-sponsored a bill to raise the minimum wage to $10.10, which he said would bring it to just above the poverty level for a full-time worker.

There’s a word that people in D.C. love to use: estimated.  These estimates of the beneficial effects of an increase in the minimum wage were made by the Federal Reserve Bank of Chicago.  You can download the document here.  The estimate in the linked newsletter is flawed, in that it is a static projection that looks only at the estimated increase in consumer spending that would result from an increase in the minimum wage.  The paper doesn’t take into account any other effects, such as how employers will react to the increase in the cost of labor.  All economists know that it doesn’t make sense to hire someone at a wage of $10.10 per hour if they produce less than $10.10 per hour in benefits to your business.  In econ-speak, if the Marginal Benefit of hiring someone is less than the Marginal Cost of what they will be paid, then they won’t be hired.

It is interesting to note that the types of people who are making these estimates have no training in economics, like this English major who is now working as an Economic Analyst for the Economic Policy Institute*. 

And why stop at $10.10 per hour?  If raising the minimum wage is so beneficial to the economy, then a larger raise should provide even larger benefits, should it not?  Why not just raise the minimum wage to $25 per hour or more, Senator?


As far as my expertise with this issue, I wrote three papers on the effects of the minimum wage on unemployment rates as part of my graduate studies in economics.  All of the research shows that increasing the minimum wage leads to an increase in the unemployment rate.

unemployment-min-wage-chartWhile looking at the chart above, you need to remember that the falling unemployment rate over the last two years is mainly due to people leaving the workforce and thus not being counted as unemployed, and not to these people actually finding a job.

Employment RateSince I don’t have a PhD, my research doesn’t count.  But the research of these others does:

The Employment Policies Institute

The Economic Policy Journal

Environmental Economics (unbelievable, this liberal site agrees with me!)

IHateEconomics (see, even the haters agree!)

The Wall Street Journal

Walter E. Williams, PhD

U.S. News & World Report

And who actually gets hurt by increases in the minimum wage?

minimum-wage-vs-unemployment-rates-1950-jan-2013Unskilled youths between the ages of 16 and 24, that’s who.  And the demographic group that experiences the most unemployment after the minimum wage is increased is black males between the ages of 16 and 19.

Mr. Harkin, what’s really goofy is how a racist Senator from the Midwest can be so adamant about increasing unemployment among young black males…


Categories: Government Shenanigans, Hmm, Liars, Stupid People, Unemployment

Tags: , ,

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