January 29, 2014

MEGAN MCARDLE: Not All Democrats Want A Higher Minimum Wage.

There’s no estimate of what this would cost the government. When I tried to generate one, I quickly gave up, because I have no idea what it means to say that this will “affect” more than 2 million employees, or what those employees might be paid right now. Some back-of-the-envelope doodling suggests that it will probably cost the government a lot in actual dollars, but not that much per U.S. citizen. Which way we should look at it is left as an exercise for the reader.

As commentators have pointed out, this is the act of an administration that has given up on big moves. Though Obama will be promulgating this executive order in the context of a broader call for Congress to raise the minimum wage, he does not have the political muscle to force that through. Democrats can speak hopefully of a new populist moment centered on proposals such as a higher minimum wage, but this is the third or fourth time that the president has attempted to launch a new populist, progressive moment. So far, all of his policy rockets have fizzled out on the launchpad, and there’s little reason to think that this will finally light a fire under Congress. So he’s taking symbolic action within his legal power.

But this is not just about a split between Democrats and Republicans; it’s also about a growing split within the Democratic Party over what government jobs are for. Virtually everyone in the party used to support strong public-sector unions and jacking up public-sector wages. But as budgets have tightened, pensions have begun to crowd out other spending, and the public-sector unions became an increasing obstacle to reform, tension has mounted between providing more government services (or even the same level) and giving government workers generous pay packets, gold-plated retirement benefits and nearly ironclad protection from pink slips. . . .

At a time of great economic insecurity, it’s not great politics to make government workers the “haves” of the labor market: paid above-market wages and shielded from the chronic risk of job loss that most of the rest of America faces. Oh, sure, this is true for everyone — professionals often have to take a pay cut to work for the government. But to the average person sweating it out through rounds of layoffs at a job they don’t like very much, government workers seem to have it very good by comparison.


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