Such is the case for the periodic fights that arise over the federal minimum wage, an issue that once again is rearing its head.
In one corner stand those who contend that setting a floor under wages is necessary to support higher earnings for a large share of the workforce and to promote increases in consumer spending by the neediest of households. In the other corner are those who say a federally mandated minimum wage leads to lost jobs -- particularly for teenagers and most particularly for black teenagers -- and to failed businesses, and that it merely adds to the current sad state of the labor market.
Both sides are so sure of the rightness of their viewpoints that they refuse to consider the other's. And if the consequences of this stalemate weren't a pendulum swing in policy that unsettles workers and companies alike, it would be easy to dismiss the posturing as another reason why Washington is a mess.
But the result of these political fisticuffs is that the country goes through long periods when the federal minimum wage, which was established during the Great Depression, is allowed to stagnate. That doesn't help the workers who see their purchasing power diminished over time by inflation. And it really doesn't help employers who periodically get slapped with big wage increases because politicians decide they finally have to act.
You have to wonder why both sides wouldn't rather have a stable minimum wage that rises incrementally with inflation -- much like Social Security benefits do. But no, political games are more fun.
In real terms, the federal minimum wage has never been higher than it was in 1968. And in 2006, after a decade without any increase at all, its value was barely half as large as it was 38 years before.
That's why two years ago the newly empowered Democratic Congress forced President George W. Bush to accept a three-step increase that totaled $2.10 an hour, beginning in July 2007. Next month, the final step will kick in, and workers paid the minimum will earn $7.25 an hour. When inflation is taken into account, the minimum wage will be the most in a quarter century. But it was still higher in real terms for the 26 years from 1956 to 1982.
The looming fact of this scheduled increase has caused the minimum wage battle to be engaged again from both sides: Some conservatives want to block the final installment, while liberals want to try again to push it higher still.
Unexpected Demographics Not surprisingly, both sides contend that the persistent recession and rising unemployment justify their position.
Conservatives say there is no good time for a minimum wage increase, but a recession is the worst. David Neumark, a professor at the University of California at Irvine, argued last week in The Wall Street Journal that the wage increase will lead to a loss of 300,000 jobs for teens and young adults. Neumark is one of the leading academic critics of the minimum wage, and not surprisingly he dismisses research that runs counter to his own.
Some of that contrary work was done by Alan B. Krueger, a Princeton University economist who is now the assistant Treasury secretary for economic policy in the Obama administration. Krueger's studies, which concentrated on fast food outlets in adjoining states with different minimum wages, showed no job losses occurred from mandated wage increases.
The fact is, this fight is far more about perceptions than actual people. Labor Department statistics paint a very different picture of the minimum wage employee than is often imagined, and the number of those affected is really relatively small.
In 2008, roughly 2.2 million workers earned no more than the minimum wage, and the vast majority of them were paid less. That amounts to 3 percent of the hourly workforce. Of those, only about 545,000 -- a quarter of the total -- were teenagers, and half were 25 or older. Two-thirds of minimum wage earners were women; 80 percent of them were white. And about two out of every five workers who were paid the minimum (or less) were employed full time.
So it's not just kids and it's not just part-timers who are covered by the federal minimum wage. And it's also hard to see how a regularly rising minimum wage would break the collective bank.
Moreover, most states seem to have figured out that setting a floor under wages is a valuable thing for their citizens. Currently, 27 states plus the District of Columbia require higher wages than the current federal minimum of $6.55 an hour. Even after the next incremental increase of the federal minimum takes effect, at least 13 states will still require their employers to pay more.
Some countries index minimum wages for inflation, and others have independent commissions that recommend periodic increases. Congress might want to take a cue from them and engage in a careful debate about why we have a minimum wage. Then, let's make it work for everyone, and not just for politicians.
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