Economist: Taxpayers should pay burden of $15 minimum wage

John went to a Washington Policy Center panel debate on raising the minimum wage Wednesday night.

After the debate he was stopped in the hallway and asked about one of the questions a panelist avoided answering. So John invited that panelist, Stephen Moore, to join the Tom & Curley Show for a little debate of their own.

Moore is a member of the Wall Street Journal’s editorial board and is also a chief economist at the Heritage Foundation. He doesn’t think there should be a $15 minimum wage.

Here’s the question he didn’t answer during the panel, as phrased by John Curley:

What responsibility does the private business owner have for the fact that he is paying a wage that then forces that individual to have to go the federal government to get subsidies in the form of food stamps and other things, when really it should not be coming from the taxpayer, it should be coming from the employer?

“No, I strongly disagree with that,” replied Moore. “First, of all, I’m not in favor of welfare programs to begin with.”

According to Moore, what he tried to say last night was if the City of Seattle decides they think someone who works a full time job and is heading a household should have a certain standard of living that’s a wage of at least $15 an hour, then why are you going to put all of the cost of that decision on the employer?

When you do that, he says, the employer may not hire the person at all.

“So they’ll dodge that ‘responsibility’ by simply not hiring someone,” he says. And if they don’t hire anyone, an employer might find an iPad, machines or other things do the work that the worker might otherwise do.

“If you all decide that you want to pay workers that work full time, to have a certain standard of living then the cost of that societal decision should not be put on the shoulders of the business (that pays the employee.) It should be put on the shoulders of the taxpayers and the people of Seattle.”

Moore says there is already a tax credit similar to the idea that he’s proposing that’s in place: The earned income tax credit (EITC.)

“(The EITC) says, for somebody that works 40 hours per week and is working at a less than a poverty (level), let’s say at minimum wage, we supplement that, as a society, as taxpayers, we supplement that person’s income, so they’re brought (economically) where we want them to be,” Moore explains.

Moore says this taxing system puts employees at an advantage because there are not job consequences associated with it.

“The main point of what I was trying to get across to people is, you are going to cost the economy, here in Seattle, you’re going to cost jobs. Some people are going to get a raise and some people are going to lose their job completely. And I think it’s immoral to take jobs away from people who are just starting out, because most of those people working the minimum wage jobs are people who are just starting out.”