Wall Street Journal Promotes Falsehood That Higher Wages Push Workers Onto Government “Dole”

The Wall Street Journal published an error-riddled piece claiming that increasing the federal minimum wage would force more Americans to rely on social safety-net programs when in fact the exact opposite is true.

In a May 5 opinion piece, New York lawyer John H. Heyer argued the minimum wage is a “scam.” He then claimed increasing wages will force businesses to lay off employees and, in turn, swell the ranks of federal social safety-net programs, which Heyer refers to as the government “dole.” From the Journal:

So the minimum wage, like so many government programs, is really a scam that never gets busted. Isn't that how these programs grow? There are always a few vocal supporters of any program and a lot of silent victims who mostly don't even know what effect the programs have on the public at large and the economy as a whole.

Minimum-wage laws raise business costs and increase unemployment. But they also require bureaucrats--who make a lot more than minimum wage--to administer the dole and regulate wages. So what's not for politicians to like?

Opponents of livable wages frequently claim that the minimum wage drives up unemployment, often citing the Congressional Budget Office's (CBO) most recent report on proposals to increase the federal minimum wage. The CBO report does project that total employment could decrease by between “very slight[ly]” and 1 million by the end of 2016, but that conclusion flies in the face of the overwhelming majority of economic evidence.

A February 2013 study by the Center for Economic and Policy Research (CEPR) reviewed nearly a decade of research on the minimum wage and concluded that “the minimum wage has little or no discernible effect on the employment prospects of low-wage workers.” The Economic Policy Institute (EPI) similarly reviewed the available literature on the minimum wage and concluded that “raising the federal minimum wage to $10.10 will not lead to job loss.” Conservative media jumped on a March 2014 survey by Express Employment Professionals claiming that businesses would cut jobs due to an increased wage, but even that survey found that 62 percent of minimum wage employers and 81 percent of all employers would not lay off workers as a result of increased wages.

Heyer's claim that increasing the minimum wage hurts the job market is arguable, but the claim that higher wages drive up reliance on federal safety-net programs is demonstrably false. The same CBO report that estimated 500,000 lost jobs from a $10.10 minimum wage also concluded that such a wage would lift 900,000 Americans out of poverty while boosting incomes for Americans living in poverty by $5 billion annually.

Increasing the minimum wage would definitively decrease America's reliance on the so-called government “dole.” According to a March 2014 study by the Center for American Progress (CAP), a $10.10 minimum wage would decrease food stamp participation by up to $4.6 billion annually. An October 2013 study by the UC Berkeley Labor Center concluded that low wages in the fast food industry alone -- whose media wage is substantially lower than $10.10 -- cost taxpayers nearly $7 billion annually.

Contrary to Heyer' s allegation, increasing the minimum wage would significantly decrease reliance on “the dole,” and significantly decrease the cost to taxpayers who subsidize the poverty wages paid by thousands of businesses around the country. A Media Matters analysis of broadcast evening news found that programs on ABC, CBS, NBC, and PBS largely ignored the high cost of low wages. The latest screed in The Wall Street Journal is not just ignoring the high cost of low wages; it is distorting the relationship entirely.