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One of the questions of economics teaches you to ask is ‘compared to what?’ Someone might tell you that a job paying $10 an hour is bad, but any reasonable…
Data released in February showed that crime in St. Paul had risen 10 percent compared with the year before. Last year, shots fired were up 28 percent from 2016. There were 22 homicides in the city last year, the most in more than a decade.
And yet, St. Paul Mayor Melvin Carter has rejected his police chief’s call for 50 more officers. Mayor Carter remains focused instead on his efforts to raise the city’s minimum wage to $15 an hour than in tackling this rise in violent crime.
This is despite a report from the Citizens League which showed that most of St. Paul’s large employers such as Allina Health, Ecolab, HealthPartners, and Securian already pay the majority of their workers at least $15 per hour. Instead, it is the city’s nonprofits, franchise and small business owners, and small, family-run restaurants who will be hit hardest by this.
It is despite another Citizens League report which showed that the minimum wage hike would cost the city $1.94 million in new wages, or $2.23 million including benefits such as Social Security and Medicare tied to wages, with the vast majority of this — $1.8 million —coming from the parks and rec budget.
It is despite the balance of academic evidence. In 2008, economists David Neumark and William L. Wascher surveyed two decades of research into the effects of minimum-wage laws. They found that “minimum wages reduce employment opportunities for less-skilled workers … [that] a higher minimum wage tends to reduce rather than to increase the earnings of the lowest-skilled individuals … [that] minimum wages do not, on net, reduce poverty … [and that] minimum wages appear to have adverse longer-run effects on wages and earnings.”
Further research corroborates this. In a new paper, Neumark and economist Grace Lordan find that minimum wage hikes lower the share of automatable employment held by low-skilled workers. Elsewhere, Neumark and economist Cortnie Shupe show that raising minimum wage rates has reduced teenage employment and left those workers less skilled. A new paper from economists Jeffrey Clemens, Lisa B. Kahn, and Jonathan Meer finds that as minimum wage rate rise, other elements of worker compensation fall.
Whichever way you look at it, minimum wage hikes are bad public policy. And, in this context, they seem to be a distraction for the Mayor from dealing with the upswing in violent crime that is causing such concern, especially to residents in areas like Rice Street.
One of the first things we expect from government is to protect us from violence. A government that can’t or won’t fulfill that basic function isn’t worth bothering with. Like any politician, Mayor Carter only has so much political capital. For the good of the city’s residents, he should spend less of it on harmful policies like minimum wage hikes, and more on making the city safer.
John Phelan is an economist at the Center of the American Experiment.