Rudy Turns Right on Minimum Wage

Finding out what Rudolph Giuliani thinks about national issues isn’t easy. Sometimes he simply declines to answer inquiries, like his preferred Presidential candidate, George W. Bush. On other occasions, such as when a proposed increase in the minimum wage is under discussion, Mr. Giuliani barks an answer and then reconsiders, saying that he is waiting for city bureaucrats to ponder the question.

The other day, he told reporters that raising the hourly minimum wage from the current $5.15 to $6.15 might result in fewer jobs for former welfare recipients. When this was taken as a rejection of the increase-an intensely unpopular stance-he hastened to correct the journalistic misperception. “My stand on the minimum wage is that I have asked a study to be conducted to determine the impact it would have on poor people getting jobs,” he declared boldly.

It’s always laudable to study issues before formulating a position, of course, and it is also an improvement on the Mayor’s typical pattern. In this instance, however, there is little likelihood that his patronage appointees at the city’s Human Resources Administration or Economic Development Corporation will add much to existing scholarship on the minimum wage, one of the most widely studied and debated issues in modern economics.

So rather than waste taxpayer funds on the pseudo-scholarly “analysis” usually churned out by agency officials-which offer whatever conclusions the boss desires, supported by footnotes to previously published data-the Mayor might break precedent by reading a book himself.

Nobel Prize-winning academics can be found to endorse either perspective on the job-creating effects of the minimum wage. But the groundbreaking title on the subject in recent years is Myth and Measurement , by David Card and Alan B. Krueger (Princeton University Press, 1995), two Princeton professors who demonstrated that earlier economic prejudices about rising wages and falling employment were ill-founded at best.

One nice thing about the Princeton professors’ work is that, unlike the predictions of their critics, it has been borne out by subsequent experience. Congress has approved two increases in the minimum wage since 1989, and national employment at all levels has steadily increased after each wage hike. Not long after Myth and Measurement appeared, conservative skeptics warned that the 1996-97 increases would eventually lead to falling employment. Three years later, that predicted negative impact has yet to appear, while unemployment rates among low-wage earners remain at encouraging 30-year lows.

Unfortunately, the old certitudes still persist, as the Mayor’s remarks indicate. That’s especially true where higher labor costs affect major campaign contributors and corporate lobbyists. Yet, while the Mayor understandably worries about his friends who have to pay the higher wages, he might also consider the toilers who benefit. About 60 percent of the employees currently earning less than $6.15 an hour are adult women, many of them former welfare recipients struggling to raise children on $10,000 a year.

In New York state, roughly 372,000 women would be helped by an increased minimum wage. Without being too crass, he should remember that some of those women may vote next November (even though none of them will “max out” as $1,000 contributors).

Why would Mr. Giuliani want to become the first New York Mayor to oppose a minimum wage increase since the Supreme Court declared such legislation constitutional in 1937? He didn’t speak out against the earlier increases in 1989 and 1996. After all, a higher Federally mandated wage has always aided cities like New York in their competition for jobs and investment with lower-wage backwaters such as, for example, Mississippi.

Ah, Mississippi: home of Senate majority leader Trent Lott, Mr. Giuliani’s new best friend. As he prepares to run for the Senate in hopes of joining Mr. Lott’s Republican caucus, the Mayor has increasingly reflected the views of Capitol Hill conservatives rather than his own urban constituency, on issues ranging from the budget and taxes to the Comprehensive Test-Ban Treaty.

The recent rightward shift is a new departure for Mr. Giuliani, who used to distance himself from the Reaganites in his party. When I interviewed him in 1989, he assured me that his grandmother, a devoted member of the garment workers union, had inculcated in him a deep regard for working people. But that was Rudy the Republican-Liberal. This year he is becoming Rudy the Republican-Conservative.

The more he appropriates the positions of the Senate Republicans, the less capable he will be of representing the interests of New York, which would be badly damaged by Mr. Lott’s latest scheme to cut the budget by an indiscriminate 1.4 percent. By November 2000, voters may be wondering whether to elect a carpetbagger who wants to be the junior Senator from New York or a native who wants to be the third Senator from Mississippi.

Rudy Turns Right on Minimum Wage