http://www.twincities.com/mld/twincities/news/editorial/15774825.htm

Posted on Tue, Oct. 17, 2006
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Economists' call for higher wage challenges candidate's reasoning
Michele Bachmann, candidate for Congress in Minnesota's 6th District,
has never pretended to economic acumen. However, on Oct. 11 her extreme
positions on various issues of social policy, such as gay marriage,
were outdone by her espoused position on the minimum wage. On that day,
more than 650 economists, including five Nobel Prize winners, called
for an increase in the federal minimum wage to $7.25 from $5.15, where
it has stayed since 1997. The earning power of the wage at this level,
according to the economists, is "fully eroded." They went on: "We
believe that a modest increase in the minimum wage would improve the
well-being of low-wage workers and would not have the adverse effects
that critics have claimed."

The simple economics of the minimum wage are that the "equilibrium" or
market-clearing wage - the place where the supply and demand curves
for labor intersect - is already above $7.25. Therefore, raising the
minimum wage to this level will have virtually no effect on average
wages or employment.

Bachmann's position on the minimum wage might charitably be termed 18th
century. Testifying in the Minnesota Senate against a bill to raise
Minnesota's minimum wage (which now stands at $6.15) on Jan. 26, 2005,
Bachmann said, "If we took away the minimum wage - if conceivably it
was gone - we could potentially virtually wipe out unemployment
because we would be able to offer jobs at whatever level."

Belittling a proposed increase to $7 (below the level recommended by
the economists), Bachmann said, "If raising the minimum wage to $7 an
hour is a good idea, then why don't we just raise it to $20 an hour,
that must be even better."

Finally, in the same testimony, she said, "I was wondering, if most
employers are already doing this anyway, isn't minimum wage really just
superfluous? Why do we even have one?"

Now she has an answer. As the written statement from the economists
noted, "most of the beneficiaries are adults, most are female, and the
vast majority are members of low-income working families." That's a
pretty large category of U.S. citizens and Minnesotans for whom
Bachmann seems to care less. The economists went on, in direct
contradiction to Bachmann: "Modest increases in the minimum wage have
had very little or no effect on employment," and that a wage of $7.25
would benefit "the labor market, workers and the overall economy."
Bachmann's views are not only contradicted by the economists'
evaluation of the evidence - she actually argues that we should
abolish the minimum wage. And if it was gone, and workers could be
paid, say, $1 or $2 an hour (which is apparently what she meant by
"whatever level"), "we could virtually wipe out unemployment." Think of
all those people who would be grateful to work for a dollar an hour!

In this, as in so many ways, Bachmann reveals not only extreme
political views, but extreme ignorance of the economic reality of
workers' lives. Like Marie Antoinette (1755-93), her proposal amounts
to the modern equivalent of "let them eat cake." In Marie's case, her
views were an invitation to a beheading. In Bachmann's, the voters will
decide.

C. Ford Runge is Distinguished McKnight University Professor of Applied
Economics and Law at the University of Minnesota. This article
represents the author's views, not those of the University of Minnesota.