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Mon March 17, 2014
The Conservative Argument For Raising The Minimum Wage
Ron Unz made his fortune in Silicon Valley and his political reputation by essentially eliminating bilingual education in California. He’s now pushing for a ballot initiative to raise the minimum wage in the state to $12 an hour, the highest in the nation.
Unz told Here & Now’s Meghna Chakrabarti that he got involved in the minimum wage issue because of the immigration issue.
“One of the arguments frequently made is that a lot of the immigrants who come here take the jobs that Americans don’t want, and that’s perfectly true,” he said. “In a lot of these jobs, if the wages were reasonable, Americans would take the work, and then there wouldn’t be as much of a problem.”
Raising the minimum wage would also take the burden off taxpayers to subsidize the working poor, Unz says.
“The bottom line is that the American government right now spends $250 billion a year on social welfare programs to benefit the working poor,” he said. “What we have right now is the classic case of businesses privatizing the benefits of the workers, but socializing the costs — shifting the burden to taxpayers and the rest of society. And I think businesses should stand on their own two feet and pay their own workers, rather than force the taxpayers to make up the difference.”
- Read Ron Unz’s opinion piece in The New York Times
- Slate: Meet the Libertarian Who Wants to Raise the Minimum Wage
- New York Times: Conservative Leads Effort to Raise Minimum Wage in California
- Ron Unz, software developer and publisher of the Unz Review. He’s former publisher of the American Conservative. He chairs the Higher Wages Alliance, which is sponsoring a California ballot initiative to raise the state’s minimum wage to $12 per hour.
MEGHNA CHAKRABARTI, HOST:
Let's turn our attention now to California. Who is one of the most passionate voices behind a push to raise that state's minimum wage to $12 an hour? He's a Silicon Valley millionaire and a libertarian and former publisher of the American Conservative magazine. Not the typical profile of a champion for higher wages, but Ron Unz is spending a lot of his own time and money to put a new minimum wage question before California voters.
Ron Unz joins us from the studios of Stanford University, and Ron, welcome, and let's just start with the obvious question. What first made you think that raising the minimum wage in California is a good idea?
RON UNZ: Probably the thing that got me involved in the issue was actually the immigration question because it seemed to me that right now, with all the immigration issues America has, one of the arguments frequently made is that a lot of the immigrants who come here take the jobs that Americans don't want, and that's perfectly true.
And the bottom line is that right now in a lot of these jobs, if the wages were reasonable, Americans would take the work, and then there wouldn't be as much of a problem.
CHAKRABARTI: Now let's step back for a moment because the whole concept of a higher minimum wage has been so profoundly anathema to conservative Republicans and libertarians, you know, for generations, that when you first started becoming more vocal and active about this, you know, what did your fellow libertarians say? Did they look at you like, you know, someone had hit you over the head with a two-by-four, or...?
UNZ: Strangely enough, the reaction was surprisingly open to the idea. I mean, the bottom line is that American government right now spends $250 billion a year on social welfare programs to benefit the working poor. If we force businesses to pay a reasonable wage to their own workers, the American taxpayers would save tens of billions of dollars a year. And that's a very conservative argument to make.
CHAKRABARTI: I see here that for example a study out of U.C. Berkeley finds that at least 50 percent of fast food workers participate in at least one public assistance program. And...
UNZ: That's exactly true. What we have right now is the classic case of business privatizing the benefits of the workers but socializing the costs, shifting the burden to the taxpayers and the rest of society. And I think businesses should stand on their own two feet and pay their own workers, rather than force the taxpayers to make up the difference.
CHAKRABARTI: But wouldn't some libertarians and conservative Republicans say by increasing the minimum wage, maybe yes, we do take some people off of public assistance, but you're just replacing, you know, one form of government subsidy with another government action, which is essentially the creation of a floor on the market rate of labor in the country?
UNZ: I think if the low-wage businesses were forced to compete on a level playing field and pay for their own workers, most of them would do fine. They would simply raise their prices a small amount and cover the additional costs. And those that simply couldn't survive if they had to pay their workers rather than get the taxpayers to make up the difference, well, from a free market perspective, maybe they shouldn't exist in American society.
The best example of that is the sweatshop industry. We right now have an industry in America trading manufactured goods and competing on wages with Bangladesh and the poorest countries in the third world. The only reason the sweatshop industry survives in a country like the United States is because of these tens of billions of dollars in taxpayer subsidies.
And I think if we eliminate the subsidies, it's better for everyone.
CHAKRABARTI: I mean, it seems like what you're saying is very rational. And if it's so, why wouldn't businesses do this on their own without the need for what's essentially government regulation or government intervention in setting the minimum wage?
UNZ: Well, let's take for example the retail industry. The data by that Berkeley research center you mentioned shows that Wal-Mart, the largest low-wage employer in America, could accommodate the costs of a $12-an-hour minimum wage nationally by simply raising their prices 1 percent one time.
But the only way Wal-Mart could take that step is if all Wal-Mart's competitors did the same thing. And the problem is even though it would benefit all of these retail business, if they got together and agreed to uniformly raise their prices and raise their wages, they would be violating the anti-trust laws in the United States.
That's why we need the government to enforce a reasonable, livable minimum wage, and that actually benefits, I think, a lot of these retailers rather than hurts them.
ROBIN YOUNG, HOST:
I wonder, what about the common - possibly the most common retort whenever raising the minimum wage is suggested, and that it's going to be a job killer?
UNZ: Well, a little while ago the CBO, the Congressional Budget Office, came out with a report that opponents of a higher minimum wage touted as being very favorable to their position. The CBO report argued that 500,000 jobs might be in danger because of a higher minimum wage. But also, 25 million workers would get a large wage increase.
Furthermore, many of the jobs lost might be in the case of teenagers. And we could take a tiny fraction of the tens of billions of dollars in government subsidies we'd be saving and use it to fund a business tax credit for teenage employment. That would be a small fraction of the dollars the current government is spending to subsidize so many tens of millions of low-wage workers. So I think it would be very beneficial.
YOUNG: That's Ron Unz, former publisher of the American Conservative magazine. He chairs the Higher Wages Alliance, which is sponsoring a California ballot initiative to raise the state's minimum wage to $12 per hour. This is HERE AND NOW.
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YOUNG: It's HERE AND NOW, and we're talking with Ron Unz of the Higher Wages Alliance. He's a libertarian leading the drive for a ballot initiative in California that would raise the state's minimum wage to $12 per hour. It would be the highest in the nation if passed. Just before the break, Ron was outlining a libertarian argument for higher wages, namely that low-wage workers end up relying on other forms of government assistance.
But Ron, I've got to ask, at one time - one time you were the publisher of the American Conservative magazine, and in hearing you talk, while what you say may be reasonable, it is not something that people are used to hearing coming from someone of a libertarian persuasion. So why do you think it is that many conservative Republicans and libertarians are so staunchly opposed to raising the minimum wage?
UNZ: Interestingly enough, I think a lot of them are looking at the issue now in this other way and are seeing it makes a lot of sense. Take for example Bill O'Reilly, the biggest conservative on television. He announced his support for a $10 an hour minimum wage, exactly what the Democrats are proposing.
Phyllis Schlafly, a conservative icon, endorsed a higher minimum wage in her syndicated column. Peter Thiel, one of the most staunchly libertarian conservatives in America, has endorsed a $12 minimum wage in California. I think more and more conservatives and libertarians are seeing that a higher minimum wage supports free market, it supports cutting government and raising the value of work. And I'm hoping the numbers will grow as time goes by.
YOUNG: What you haven't said so far is that if indeed there was an automatic reduction in the need for the size of the social welfare programs in the country, would you then go on to advocate for government to cut those?
UNZ: The nice thing about this issue is that cuts are automatic. For example most of these government programs, the amount of money spent is based on the poverty needs of the population. A $12 an hour minimum wage is what I'm advocating in California. And it would mean that every fulltime minimum wage worker in the state would earn $25,000 a year, $50,000 a year for a full-time couple at minimum wage workers.
At those levels, individuals simply aren't poor enough to qualify for a lot of anti-poverty programs. And if workers are no longer poor and are not eligible for anti-poverty programs, the amount of spending in those programs automatically is reduced. Congress doesn't have to do anything.
CHAKRABARTI: You know, you mention California, and I'm seeing an article in the New York Times that members of labor unions in California that have long been champions of increasing the minimum wage, they look at you somewhat askance. I mean, I'm seeing a quote from Steve Smith, a spokesman for the California Labor Federation, who says you have not shown - or he, in this case referring to you - has not shown a great deal of support for workers' issues in the past and was nowhere to be seen in the legislative debate here. So it's not really clear what the motivation is.
UNZ: The whole thing is I've been focused on the minimum wage issue for the last two or three years but entirely at the federal level. It was only a few months ago I realize that with Congress log-jammed on the issue, the only hope of getting something done might be a California initiative.
Now as it happens, when I first popped up on this issue, I'd been totally out of politics for 10 years. I hadn't been involved in this issue in the state legislature or anything like that. And so naturally the large unions in California were very surprised and flustered. But now that I've had a chance to meet with a number of them, answer their questions, discuss the issue with them, they really seem quite, quite supportive because they want their workers to get a higher minimum wage, and that's what exactly I want. And the more I can bring Republican and conservative support to the issue, the more chance there is of actually having it enacted.
CHAKRABARTI: Well, how far would you go? Because I also see that a lot of labor leaders say really what's essential is to get the minimum wage not only raised but then tied to inflation so that the, you know, the purchasing power of that minimum wage stays up over time. I mean, would you go as far as advocating for that?
UNZ: I think that's a very reasonable idea. Inflation these days is very low, about 1 or 2 percent. So it's not the burning issue it might have been in the 1970s. But once we raise the minimum wage in California to $12 an hour statewide, I think it would be great if the state legislature then got together and added an automatic cost of living adjustment based on whatever formula they decide is best.
CHAKRABARTI: How much of your own money have you spent in trying to get this ballot initiative going in California?
UNZ: Well, I've put in some of my own money, but one thing I should emphasize is I'm nowhere remotely in the financial league of many of these Silicon Valley people that popped up over the past few years and have written tens of millions of dollars in checks to support their ideas.
I'm putting in some of my money. I'm talking with other people and hoping them to get involved, as well. And I do think there's an excellent chance this initiative will get on the November ballot in California. And once it gets on the ballot, a very good chance it'll win, possibly by a landslide.
CHAKRABARTI: I've read that you may have already spent a couple million dollars. Is that true?
UNZ: No, no, not in this campaign, not yet certainly.
CHAKRABARTI: OK, not yet. Do you think that it matters that this is California, that it's the nation's number one economy by - in terms of the size of the state's economy?
UNZ: I think it really could have a huge national impact if this initiative gets on the ballot because we're talking about the state that launched, for example, the tax revolt with Prop 13, that has been the forerunner of many major social and economic changes in American society in the last 30 or 40 or 50 years. And raising the California minimum wage to $12 an hour, the highest in the country, could really force Congress to take action on the issue and raise the minimum wage for everybody in the country, as well.
CHAKRABARTI: You know, we've been talking a lot about the economic impact of raising the minimum wage. But a lot of what progressives and Democrats find to be the most compelling argument for a higher minimum wage is that it deals with the problem, or it helps deal with the problem of income inequality and rising income inequality in America. Is that part of your motivation here, or does that not really matter to you?
UNZ: I totally agree. It's a huge problem right now. We have a system in which the wealthiest 1 percent in American society have as much total wealth as the bottom 95 percent combined. When you have that level inequality, you inevitably will get social instability, and social instability is not good for anybody, either the 1 percent or the 99 percent.
I'm in no way claiming that raising the minimum wage to $12 an hour would solve all those problems, but at least it would put a reasonable floor under ordinary workers who right now are suffering terribly with their low wages. And even with the taxpayer benefits they receive, they just can't get by. At $12 an hour, at least they can survive.
CHAKRABARTI: Mr. Unz, do you still consider yourself a libertarian or a conservative?
UNZ: Well, I come from a scientific background. I'm a physicist by training. I try to look at issues on a case-by-case basis. Many times, the answers I come up with in my opinion are on the conservative side or the libertarian side or the free market side, but I just come to whatever conclusions I can. And, you know, whether the minimum wage is regarded as a conservative idea or a liberal idea, I think it's a very good idea for the country.
CHAKRABARTI: Well, Ron Unz is a software developer and publisher of the Unz Review. He's also former publisher of the American Conservative. He now chairs the Higher Wages Alliance, which is sponsoring a California ballot initiative that seeks to raise the state's minimum wage to $12 per hour. Mr. Unz, thank you so much for speaking with us.
UNZ: Great to be here.
CHAKRABARTI: And listeners, what do you think of Ron Unz' line of thinking when it comes to raising the minimum wage? Let us know at hereandnow.org. This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.