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A $10 Minimum Wage Might Help Trump But Hurt America


Last week, Donald Trump endorsed increasing the federal minimum wage to $10 per hour, up from the current rate of $7.25. This could be just another off-the-cuff policy position, soon to be forgotten—after all, he took the opposite position just a few months ago—but it could also signal Trump’s long-promised pivot to general election issues.

Backing a minimum wage hike might violate the free-market promises of the party of which Trump has just assumed leadership, but it would also be a shrewd strategy and an effective play for moderate voters turned off by Hillary Clinton’s close embrace of Wall Street.

Most People Like It

On the economy and taxation, Republicans have had it easy recently. When asked if they would like higher taxes, more deficits, or a broader role for the government in the national economy, a large majority of the American people have consistently said “No.” This made life easy for a Republican campaigning on those issues. Democratic politicians, who said “yes” to all those questions, had the heavier burden of convincing voters to change their minds in favor of a more interventionist state. All Republicans had to do was agree with the existing majority.

But the picture was never as black-and-white as that. On a few issues, the Democratic position against the free market has consistently been the popular one. Among these: raising the minimum wage. In two 2013 Gallup polls, more than 70 percent of Americans favored raising the minimum wage to $9 an hour. A Pew survey in 2014 found 73 percent in favor of raising it to $10.10 per hour. In 2015, Hart Research found three-quarters of those surveyed agreeing to raise it even further, to $12.50.

More surprising is that in each of those surveys, a majority of Republicans joined much larger majorities of Democrats and independents in favoring government-mandated wage hikes. The issue cuts across party, and flies in the face of the typical American predisposition to reject government interference in the economy. Unlike many of the more extreme Trumpian pronouncements, his call for a $10 minimum wage fits squarely within the mainstream of American opinion.

Some Republicans Don’t

So why have other Republicans refused to get on board with minimum wage hikes? There are several reasons. Despite the slim majority of Republicans supporting it (53 percent to 43 percent in the 2015 poll,) large constituencies still oppose it. Small-business owners would be hardest hit as the law, unlike many other federal workplace regulations, applies to equally nearly all employers. A Fortune 500 corporation might be able to make the switch easily, but your local storekeeper or landscaper would see his bottom line eroded considerably. These people vote (and donate) in Republican primaries.

There are also voters and politicians motivated by an honest belief in the justice of the free market. They believe people should agree to be employed based on conditions they arrive at through arm’s-length negotiations, not government coercion. If that principle is important to you, you are not likely to endorse wage controls, any more than you would endorse price controls or government monopolies.

Beyond that principle, though, there are also practical objections to minimum wage hikes. Many economists believe increasing the minimum wage decreases the availability of low-skill jobs, thereby hurting the very group of workers it purports to help. By raising the cost of labor, wage hikes encourage employers to outsource or automate work that might otherwise be done in America by Americans. In an interview with USA Today earlier this year, Jeff Clemens, an assistant professor of economics at the University of California, San Diego, explained this point:

[T]he full set of minimum wage increases enacted over this period [2006 to 2012] is responsible for a decline of around 1 million jobs across these particularly low-skilled worker groups. Overall, there’s something in the order of 2.5 million jobs lost among these low-skill workers to account for. So my assessment is that this period’s minimum wage increases account for 40 percent of that.

Trump Triangulates?

Because of the unique circumstances of the Trump campaign, these objections are less meaningful than they would be for other Republicans. He has already won the nomination, so pleasing core conservative constituencies, if it ever mattered to Trump, is no longer an important goal; he is aiming at moderates.

Principled objections or objections based on the hard math of economics are similarly irrelevant to a candidate who has always been willing to jettison conservative principles and economic logic. There is no Republican better suited to endorse minimum wage increases than Trump.

Trump is further assisted by a Clinton campaign that has moved increasingly to the Left on this issue in an attempt to attract the erstwhile supporters of socialist Bernie Sanders. Clinton has fairly recently supported a minimum wage of first $10, then $12, and now $15 an hour. While disingenuously making her campaign’s interns work for free, Clinton now favors a position on the minimum wage just extreme enough to alienate a majority of Americans (only 48 percent favored a $15 minimum wage in a 2015 YouGov poll).

Minimum Wage From the Right

With Clinton having ceded the middle ground, Trump now has an issue that could pay electoral dividends. It also might particularly appeal to his hard-core supporters, the blue-collar enragés now occupying the Republican Party. While many Americans see the minimum wage as a left-wing position, it might be more properly characterized as a position of big-government rightists. A truly socialist position is one where all people get paid as a human right, rather than because they actually work. That is not a minimum wage; it’s a basic income.

Minimum wage has a more natural home in the kind of European-style dirigiste party into which Trump and his followers seek to make the GOP. For proof, we need look no farther than the British Conservative Party. In 2015, after winning a narrow majority in the House of Commons, Conservatives proposed a budget that cut back on the welfare state while increasing the minimum wage to £9 per hour by 2020—nearly $14 in the exchange rate at the time. The issue found favor with most of their supporters while stealing a top vote-getting issue from the Labour Party. A combination of less money for those who don’t work and a government mandate for more for those who do appealed to a strain of thinking common on the Right in Europe, not the Left.

This should find favor with the Trumpist Right. Traditional American conservatives want a government that stays out of people’s way in the marketplace and does not pick winners and losers. Trump’s brand of conservatism doesn’t mind picking winners, as long as the winner is them. The minimum wage hike is exactly the sort of thing Trump would like, while ignoring the likely consequences of increased offshoring and automation.

It’s unconservative, illogical, and popular—the perfect Trump platform. By moving so far Left on the issue, Clinton abandoned the center of American opinion on the subject. That’s a deal Trump is not likely to pass up.