Rocky uncritically reported conservative position that minimum-wage increase would cause job loss

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Reporting on a debate over a ballot issue to increase Colorado's minimum wage, the Rocky Mountain News uncritically repeated the conservative view that raising the minimum wage would mean "jobs for the least-skilled workers will be lost, which would likely force those workers onto welfare." The article did not point out that hundreds of economists support raising the current minimum wage and that several studies contradict the claim that an increase would cause significant job loss.

Reporting on a September 28 debate between Linda Gorman of the conservative Independence Institute and Rich Jones of the liberal Bell Policy Center on Colorado's proposed Amendment 42 ballot initiative to raise the minimum wage, the Rocky Mountain News uncritically repeated Gorman's arguments that, if the minimum wage were raised, "jobs for the least-skilled workers will be lost, which would likely force those workers onto welfare." The article by reporter David Milstead also stated misleadingly that the idea that a higher minimum wage will not result in job cuts "is contrary to economic theory" and summed up Gorman's claim that raising the minimum wage "will cost jobs and opportunity."

The debate was taped for the October 6 broadcast of Independent Thinking on KBDI Channel 12. The debate was moderated by the host of Independent Thinking, Jon Caldara, who also is president of the Independence Institute.

If passed, Amendment 42 would amend the Colorado Constitution to raise the minimum wage in Colorado from $5.15 an hour [the current federal level] to $6.85 and would adjust the wage annually for inflation. The News quoted Jones as saying, "The dire prediction that if we raise this there will be job cuts just hasn't come true." The article then added,

That argument is contrary to economic theory, which holds that as the price of any product or service increases, there will be less demand for it, something that Linda Gorman of the Independence Institute was quick to note. And she, too, referred to academic studies that had reached the opposite conclusion of what Jones had claimed.

In arguing that minimum wage increases actually hurt the working poor, she made two main points. One, jobs for the least-skilled workers will be lost, which would likely force those workers onto welfare. And two, employers who absorb the wage increase and retain their workers are more likely to cut other benefits, such as English lessons for Spanish speakers.

But the News did not point out that hundreds of economists support raising the current minimum wage. Media Matters for America also has noted several studies contradict the claim that an increase would cause significant job loss. A 1998 Economic Policy Institute (EPI) study of the impact of the two most recent increases in the federal minimum wage found that the effect on employment was "economically small and statistically insignificant ... [and] almost as likely to be positive as negative." Additionally, as the weblog Think Progress has noted, a 1995 study by Princeton University economists David Card and Alan B. Krueger found that increases in state and federal minimum wages in the late 1980s and early 1990s led "to increases in pay, but no loss in jobs." The conclusions of Card and Krueger regarding state-level wages were supported by a March 2006 report from the nonpartisan Fiscal Policy Institute, which found that "employment and payrolls in small businesses grew faster in the states with minimum wages above the federal level." In addition, a report from the Wisconsin Department of Workforce Development found that the state's 2005 minimum-wage increase "produced $175 million in additional payroll and a $3 million boost in state tax revenue."

From Milstead's September 29 article, "Two think tanks debate minimum wage proposal," in the Rocky Mountain News:

Rich Jones of the Bell Policy Center said the boost would be the first since Congress raised the wage in 1997. Currently, a minimum wage worker makes about $206 a week, or about $11,000 per year.

"No matter how you calculate it, it's not enough to live on," he said.

The raise "is a modest increase that can be handled" by businesses, Jones said, citing academic studies that show a growing number of small businesses and jobs in areas that have increased the minimum wage.

"The dire prediction that if we raise this there will be job cuts just hasn't come true."

That argument is contrary to economic theory, which holds that as the price of any product or service increases, there will be less demand for it, something that Linda Gorman of the Independence Institute was quick to note. And she, too, referred to academic studies that had reached the opposite conclusion of what Jones had claimed.

In arguing that minimum wage increases actually hurt the working poor, she made two main points. One, jobs for the least-skilled workers will be lost, which would likely force those workers onto welfare. And two, employers who absorb the wage increase and retain their workers are more likely to cut other benefits, such as English lessons for Spanish speakers.

[...]

Ultimately, Jones and Gorman reiterated their positions, respectively: It's the right thing to do, and it won't cost jobs; it's the wrong thing to do, and it will cost jobs and opportunity.

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