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Location: Granite Falls, North Carolina, United States

I'm an ordained United Methodist minister no longer pastoring churches, a former media producer with skills ten years out of date, a writer trying to sell my first novel, and a sales associate keeping body and soul together working for the People's Republic of Corporate America. I'm married to the most wonderful woman in the world, who was my best friend for 17 years before we married.

Wednesday, July 19, 2006

Ivory -Tower Theories

One thing conservatives used to criticize liberals about was substituting "ivory tower" theories for "hard-nosed" reality. They claimed the "War on Poverty" was based on such thinking, and that good old-fashioned hard work would lift people out of poverty. Yeah, if the minimum wage were high enough, it could. That's no longer true in the world of hard-nosed reality.

Nowadays it's the conservatives (or more specifically neo-cons) who are indulging in ivory-tower theories that have the same validity as the theory that bumblebees can't fly.

Take the minimum wage. I got a letter from my Congressman in response to an e-mail I sent him in support of an increase in the minimum wage. His reply recited the same old tired theory about how having to pay higher wages would cause small businesses to have to lay off people, yadda, yadda, yadda.

Out here in the world of hard-nosed reality, every time the minimum wage goes up, unemployment goes down. Unemployment rates went way down in 1997 after the last federal minimum wage hike and stayed down until Bush's tax cuts brought on the recession in 2001.

Add to that the fact that states that have raised the minimum wage above the federal minimum have stronger small-business growth than their neighboring states that have not.

How does that fit into an ivory-tower theory? Try adding in some extra factors the conservative economists like to leave out, such as demand. When people start earning more money they spend it, driving up sales, driving up the need for more staff, driving up employment, driving up prosperity.

Of course prosperity for working people is outside the realm of conservative concerns. If it isn't the prosperity of the top layer of society, then it isn't prosperity to them.

How to survive until January when a new Congress takes charge?

2 Comments:

Blogger Internet Esquire said...

Quite surprisingly, libertarian economist Steve Landsburg argues quite convincingly that the minimum wage is not the big job killer that most other economists believe it to be. Nonetheless, if your objective is to help the working poor, an expansion of the Earned Income Tax Credit (EITC) would be much more effective and equitable than raising the minimum wage.

July 19, 2006 at 10:37 AM  
Blogger Tom said...

Thank you for a thoughtful comment. The EITC is a good thing, sure enough and I may post a blog entry about it in the future.

But there should be a range of programs, including affordable education, affordable health care, the minimum wage, the EITC, etc., all of which can work together to make society as a whole more prosperous.

July 21, 2006 at 9:42 AM  

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