Throwing minimum-wage 'experts' for a loss

Posted: February 13, 2008

WHEN THE clock expired at the end of the Super Bowl, a lot of so-called experts turned out to be wrong. The game is played on the field, and that often has a funny way of defying ill-placed prediction.

Overshadowed perhaps by football, but even more important to millions of Pennsylvanians, was the January debunking of forecasts by experts even more certain than football commentators.

Two years ago, during an intense debate over Pennsylvania's eroding minimum wage, the big-business lobby and some misled lawmakers were touting the work of a Florida economist who had supposedly studied Pennsylvania's labor market and come to the conclusion that adjusting the minimum wage for inflation would be disastrous for low-wage workers.

David A. MacPherson , whose work is often cited by right-wing publications and Web sites, went as far as to calculate exactly how many jobs would be lost to a rising minimum wage and in exactly which segments of the employment market.

The game, however, is played on the field, not on paper.

At the time, I argued that the entire history of the minimum wage in Pennsylvania and in the U.S. has already disproved such dire forecasts. And I pointed out that Dr. MacPherson had made projections for the state of Washington in 2000 and was discredited by strong low-wage job growth in years that followed. Ditto for California in 1998.

The year 2007 was fourth down for doomsayers in the business lobby.

In the job markets that make up the bulk of minimum-wage jobs - and where they said workers would suffer the greatest losses - Pennsylvania experienced the most robust job growth in the first year of a rising minimum wage, according to a report released in January by Pennsylvania's Department of Labor and Industry.

MacPherson's prediction of 3,261 lost jobs in the leisure and hospitality sector was met with an increase of more than 11,000 jobs in 2007. Retail jobs jumped by 2,900 according to the labor department, defying a prediction of 2,500 losses.

The third area where the business lobby predicted job loss from an adjusted minimum wage was in education and health services, where MacPherson projected 1,651 jobs lost. The labor department reports an increase of 27,000 jobs instead.

Throughout my six-year fight for fairness for low-wage workers, I urged opponents to look at the historical result of minimum-wage adjustments, rather than what myopic "experts" projected in sterile academia. Research on the minimum wage has always broken into two camps: what academics predict could happen and what actually happens.

WHAT ACTUALLY happened over the past year is that thousands of Pennsylvanians have seen their wages recover the buying power they held a decade ago, while the only measurable change in the number of jobs for those workers has been positive.

This year, I will push to take the politics out of - and put the history back into - the debate over the minimum wage by urging passage of a bill that will automatically adjust the minimum wage for inflation. This would not only keep full-time working families out of poverty, but it will allow employers to adjust their bookkeeping reasonably and incrementally.

I expect that, without the outside influence of national recession, job growth in Pennsylvania's entry-level work force will continue to expand as the last phase of the minimum-wage adjustment takes effect this year.

That should provide the proof needed to make sure we don't allow thousands of families in the state to be robbed by inflation while politicians and lobbyists try to rewrite economic history. *

State Sen. Christine M. Tartaglione, a Democrat, heads the Labor and Industry Committee and is the author of Act 112, Pennsylvania's new minimum-wage law.

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