“Americans should stop whining about food prices.”

That was the message AEI’s Mark J. Perry blasted last September to families gullible enough to believe that rising food prices were a problem:

It’s a favorite pastime in this country – Americans love to complain about rising food prices. Even when they aren’t. In fact, given all of the complaining you would never know that average food price inflation in recent years is actually the lowest in several generations. Below are three reasons that Americans should stop whining about food prices, and be a little more appreciative of how affordable food is in the US today, especially when compared to other countries, or when compared to previous decades in US history.

Perry’s three reasons for why American families should stop whining were that 1) Americans spend a smaller percentage of their budgets on food than they did 60 years ago, 2) people in other countries spend more of their money on food than we do, and 3) the four-year moving average of food inflation is low.

To which I say: so what? None of those supposedly devastating critiques of the “inflation is real crowd” came even close to addressing the real problem for millions of American families: namely, that the prices of stuff they buy are growing a lot more quickly than the wages they use to buy that stuff. Yes, it’s nice that we spend a smaller percentage of our budgets on food than other nations do or than our grandparents did after World War II, but that’s cold comfort to a working mom trying to figure out how to buy $20 worth of meat with only $15 left in her pockets.

A lot has happened since Perry told us ten months ago to stop whining. Did events prove him right or wrong? Was his inexplicably bizarre method of averaging four years’ worth of inflation data actually an effective way of predicting future price growth? Let’s take a look:

It turns out food prices have soared since he so confidently told us to shut up about them. The chart above shows the rapid disparity between food price growth and wage growth since Perry issued his “stop whining” directive. No joke: compared to less than a year ago, egg prices are up 13 percent. Beef is up 10 percent. Pork is up more than 9 percent. Fresh fruits are up over 7 percent. Overall, the prices of food at home are up 2.3 percent, while average hourly wages are up only 1.4 percent. In other words, food prices are growing 64 percent faster than wages.

The overall trend since the end of the recession in June of 2009 is no different. Food price growth is outstripping wage growth:

Mark Perry is not alone in his skepticism, though. James Pethokoukis of AEI and Ramesh Ponnuru of National Review have also regularly belittled those with the audacity to look at rising price data and assume that prices are, in fact, rising, and that these rising prices might actually be causing problems for people. In his July 16 Bloomberg column in which he derisively referred to people concerned about inflation as “cranks,” Ponnuru wrote:

It’s certainly true that a looser monetary policy raises those prices and a tighter one would bring them down. But these policies would have the same effect on the price of labor. It’s the ratio of goods and prices to wages that matters for living standards. There’s no reason to think that the Fed’s policies are doing anything to increase the percentage of household budgets spent on food.

This is an interesting graf to unpack, especially since it attempts to make the same point as Perry did: that there’s no need to worry since the percentage of the household budget spent on food has remained relatively static. Here’s the thing, though: if food prices are growing more quickly than wages (and they are), and if families are still spending the same percentage of their money on food, then simple math says they must be buying less food. How is that a good thing, and why are we suddenly congratulating the Fed for it? At what point did our political pundit class decide that “Stop whining that you can’t afford more food for your family” or “Whatever, fatty, you didn’t need that food anyway” were winning messages?

The assertion by Ponnuru that commodity inflation is only real if it simultaneously affects the price of labor is also odd. Unit labor costs are notoriously sticky. There’s no spot or futures market for labor, where if I don’t like the price of yesterday’s contract I can just sell it and buy a new one today. And a labor market where the true unemployment rate is closer to 10 percent than to 6 percent is not one that’s all that conducive to a rising unit cost of labor — when you’re lucky just to have a job, you’re not likely to march into your boss’s office and demand a raise every time new CPI data are released. Yes, the labor market is slowly improving, but we’re hardly at a point where employees are on equal ground with their employers when it comes time to bargain over compensation. Unfortunately, most employers are still price makers, and most employees are still price takers:

Ponnuru, to his credit, though, noted the real issue that matters the most to working families: the gap between wage and price growth. That’s a far more important measure than the array of irrelevant numbers thrown at the wall by Perry. What Ponnuru leaves unmentioned, though, is that in a number of major areas, prices are growing a heck of a lot faster than wages. Food price growth isn’t the only thing that’s outstripped wage growth. There has also been significant post-recession growth in the prices of education (not just college), medical care, and gasoline:

Those items comprise a pretty large share of the average family budget. According to the 2012 personal expenditure survey conducted by the Bureau of Labor Statistics, a married family with children will spend upwards of 27 percent of its annual budget on food, education, health care, and gas. Food alone, whether prepared at home or by a restaurant, eats up more than 13 percent of the average family’s budget each year.

Prices are rising, they’re rising faster than wages, and they’re rising for items that comprise a large chunk of the budgets of working American families. Those are facts. The question is what to do about those facts. The subtext to all of the inflation critiques from the likes of Perry, Pethokoukis, and Ponnuru is that we should leave the Federal Reserve alone. Stop blaming the Fed for inflation, you guys. Please ignore that QE, QE2, QE3, and a multi-year zero interest rate policy, etc. were all intentionally designed to increase inflation, you guys. Just ignore all the different goods for which prices are rising really rapidly, you guys. Ignore the fact that higher prices and middling wages are eroding standards of living, you guys.

Unfortunately, the constant Federal Reserve apologetics are seriously clouding these pundits’ collective judgment about an increasingly important political issue: whether America’s current political class has what it takes to make rising standards of living — rather than just rising prices — the norm for American families again. That is why families are so anxious today. They’re worried that the American dream is slipping away, and that only thing people in Washington and New York care about is protecting people in Washington and New York.

Guys, we get it. You like the Fed. A lot. That’s all fine and well: different strokes for different folks and all that. But stop letting your compulsion to defend the Fed prevent you from recognizing a very serious issue that’s affecting tens of millions of families. The first political party or ideology to come up with a coherent gas and groceries agenda for working families will have a huge advantage vs. a movement that decides its true constituency is a collection of technocrat bankers at the Fed.

The prices of things people buy are growing faster than many people’s ability to buy them. It’s time for pundits to stop pretending rapidly rising prices are no big deal.

By many measures the labor market is improving smartly. The unemployment rate dropped to 5.9 percent in September—not far from the level many economists consider typical during normal economic conditions. The number of job vacancies has jumped almost one-fifth since the start of the year, while employers have created 2.6 million net new jobs over the last 12 months. Nonetheless, polls show Americans remain deeply concerned about the economy. A hefty majority tell Gallup pollsters they consider the economy to be “getting worse.” Polls also find economic concerns topping voters’ anxieties. Why the dichotomy between the economic statistics and popular perception?

In part it’s because these figures do not tell the full story. The economy remains in worse shape than the headline figures suggest. Many analysts have discussed how much labor force participation fell during the downturn. Millions of Americans no longer count as unemployed because they have become so discouraged, they’ve stopped looking for work. Analysts have paid much less attention to another problem—anemic wage growth.

Inflation-adjusted wages have hardly changed since the recession ended. Between July 2009 (the start of the recovery) and August 2014, real wages grew 1.4 percent. That’s total growth, not annual growth. After factoring out inflation, average hourly earnings have increased just 33 cents over more than five years. Small wonder many Americans feel getting ahead has become harder.

Why has wage growth dropped so sharply? Economists have several theories:

Reduced Labor Demand. Essentially, blame the business cycle. Wages have stagnated because the lackluster economy has made businesses less interested in hiring. With sales low, companies see little need to add to their payrolls. Simple supply and demand predicts that reduced demand for labor will lower its price—wages. The media most commonly cite this explanation, and it contains much truth. The recession and weak recovery almost certainly depressed wages. However, labor demand has clearly improved in recent years. Job openings surged in 2014 to levels not seen since 2006 and 2007. Wages have scarcely budged. Reduced labor demand cannot explain that.

Increased Labor Supply. Changes in labor supply can. When labor supply increases, employment rises and wages fall. And Federal Reserve economists estimate that the expiration of long-term unemployment insurance (UI) benefits at the end of 2013 increased labor supply. The longer benefits had led the unemployed to search longer for better offers. This put upward pressure on wages, which discouraged companies from creating jobs. Their model predicted that ending extended UI benefits would cause wages to fall and job openings to rise. Indeed job openings increased in 2014 by almost exactly the amount this model predicted.
However, labor supply can explain only some of the wage stagnation. This economic model projected that extended UI benefits account for virtually all the elevated unemployment during the recovery. Even conservative economists consider that implausible; the model may overestimate how much UI benefits affect job creation. Moreover labor supply decreased throughout much of the recovery; increased supply can only explain recent changes.

Obamacare. Labor demand can increase without workers’ pay rising if hiring becomes more expensive. Employers will pay more, but workers do not see that money in their paychecks. Indeed, Obamacare appears to have made employing workers considerably more expensive. Accounts of the healthcare law raising hiring costs fill recent Federal Reserve Beige Book reports. Polling finds two-fifths of employers who offer health coverage say the law has raised their costs. Surveys conducted by the New York, Dallas, and Philadelphia Federal Reserve Banks also find the healthcare law hurting businesses. Federal policy has made hiring workers more expensive—and that money comes out of workers’ wages.

Which of these explanations explains the wage slowdown? Probably all three. It will take more time and data to determine which has played the largest role. In the meantime, workers who believe the economy remains far from a recovery have a lot of justification for feeling that way.

A priceless little gem of leftist thinking appeared yesterday at Rachel Maddow’s MSNBC blog, in which Steve Benen declares a triumph for the campaign to increase the federal minimum wage—in the form of private employers voluntarily raising their wages in response to market forces.

Say what?

Here’s what he wrote:

Congressional Republicans are in a position to block every effort to raise the federal minimum wage, but the economy is moving on without them.

Whether GOP lawmakers like it or not, some of the nation’s largest retailers–Gap, Ikea, and Wal-Mart, among others–have already raised their company’s minimum wages. Today, another major retailer joined the club, reinforcing the larger trend.

That’s the original version, captured here. But the second paragraph has since been altered, with the following correction notice:

The second paragraph originally suggested GOP lawmakers might somehow disapprove of private-sector businesses raising their own workers’ wages, which was a foolish way to put this. Obviously, Republican lawmakers, like everyone else, want businesses to raise wages whenever they want to raise wages. I’ve edited the above text accordingly.

But this doesn’t quite cover it. Benen goes from declaring that Republicans are hostile to rising wages to implying that they are indifferent. In fact, increasing private wages is the right’s economic program for the average worker. Advocates of the free market do have a grand economic plan. Freeing private businesses from arbitrary costs and controls, we argue, will enable the economy to grow vigorously, and this—among many other benefits—will result in employers competing for workers, which will drive up their wages. That’s what we have been saying, over and over and over again, for a very long time. And it is precisely what is finally, belatedly happening at the end of this grindingly slow economic recovery. This is noted in the article Benen links to.

Walmart’s announcement signals that the company wants to keep attracting good talent and doesn’t want to lose its workers to competitors—which in turn signals that there’s increased competition to get good workers.

In other words: the free market works. Who’da thunk it?

This is just another example of something wearyingly familiar to anyone on the right: people on the left are willfully ignorant of our actual ideas and arguments. They have not bothered to study or think about free-market economics. Instead, they indulge in their own self-serving mythology about how Republicans are a bunch of mustache-twirling Snidely Whiplashes who delight in the poverty of the ragged hordes toiling at the Dark Satanic Mill.

But there’s an even bigger absurdity that glares out of this article. Why does Benen treat private, voluntary wage increases as a triumph for the push for a minimum wage? Why does he even describe these private wage increases as a “minimum wage”? The lowest wage Wal-Mart pays is not a “minimum wage” in any meaningful sense. They could pay a lower one if they chose. So they are not “increasing the minimum wage.” They are simply increasing their wages.

But what really gives away the underlying assumption is the reminder Benen feels he needs to give his readers: “Remember, as was the case with Wal-Mart, this is a done deal–it’s a private-sector move, which will occur regardless of Congress’ wishes.”

Wait, you mean private employers can set their wages regardless of Congress’ wishes? How long has this been happening? And who exactly, wants to stop it from happening? (Hint: it’s not the right.)

Partly, Benen is trying to steal credit on behalf of big government for something accomplished by the free market—sort of like President Obama claiming credit for high oil production and low gas prices, right before he vetoes approval for the Keystone pipeline. But beneath that there is a bizarre unwillingness to respect the difference between private economic decisions and political action. That how Benen ends up presenting private wage increases as some kind of political statement in defiance of Republicans—and even as a kind of political end-run around Congress.

Hence the original assumption that Republicans are in favor of low wages. It depends fully on breaking down the distinction between government coercion and private action. If Congress doesn’t think the federal government should force employers to pay a certain wage, then this must mean they don’t want private employers to pay that wage. Conversely, if private employers do in fact choose to pay a higher wage, that must mean they are signaling their support for government action to enforce that wage on all employers.

The left’s faith in government does not permit them to fully admit the possibility of action outside of government, or any progress that is not the product of a political movement. So I guess it should be no surprise that the same people who think the personal is the political also think personnel decisions are political.

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The difference in opinion between Republican elites and the base of their party on the topic of immigration is very real, but that difference is even more politically significant when you compare it to the views of the country at large. You can see it in all sorts of poll data. The Gallup numbers on this point from a few months ago illustrate it clearly. Gallup found that 39% of Americans want to see levels of immigration (legal and illegal) decrease, while 54% want the same or higher levels of immigration (33% same, 7% higher, 14% dissatisfied but want same which I assume is the throw your hands in the air portion). That 39% figure is a historic low on the question, compared to levels that were higher than 50% during the George W. Bush presidency.

But even if the public at large is less in favor of lower immigration levels, the Republican Party has much stronger views on the subject, and this creates a natural tension between what potential candidates might say to win a GOP primary and what they may do to win over Independents in a general election. Gallup reports:

“More than four out of every five self-identified Republicans say they are dissatisfied with the current level of immigration (84%), a figure that towers above the number of independents (54%) or Democrats (44%) who feel similarly. Moreover, the number of GOP affiliates saying they are dissatisfied on this issue swelled by 19 percentage points compared with 2014.”

Consider this as you read the unsurprising news that Marco Rubio is touting his controversial immigration record to donors.

“Even as Rubio labors to publicly distance himself from the legislation so loathed by conservative primary voters, he and his aides have privately highlighted this line in his resume when soliciting support from the deep-pocketed donors in the party’s more moderate business wing.”

Well, of course that makes sense politically – you won’t exactly find rah-rah support for what Rubio tried to do on immigration in 91% white Iowa. Instead, you’ll find it for comments like those from Scott Walker. But to be a candidate that unites both that moderate/business wing and the base of the party as a nominee, there’s a need to speak to both sides, and to achieve a level of trust on the immigration issue that is lacking.

The immigration issue provides an easy opportunity for some early populist chest-beating in the presidential stakes. But when it comes time to win a general election, too much of that talk would prove an anchor for any candidate wanting to reach beyond the typical Republican lines to win Independent and Hispanic voters. That’s why talk of lowering legal immigration levels out of concerns for the American working man are so toxic, and interpreted as code words and dog whistles by Hispanics.

What’s more, it’s a completely pointless discussion to have given the current inability of the government to do anything about levels of illegal immigration. I think the data is clear: Low-wage migrant workers temporarily depress wages in their specific sector, but raise them in the long term through the aggregate effects of economic growth. But that debate is beside the point: Markets are already dictating where people move despite the laws. Arguing about legal immigration levels is like debating whether you should change the oil at 15,000 or 30,000 miles in a car that is currently on fire.

The safest Republican position on immigration heading into the general campaign is one that highlights the weaknesses of Democrats on the issue as opposed to catering too much to either the base or the business community. Don’t be Steve King, and don’t be the Gang of Eight. Instead, make the case for steps to secure the border, based on our need for health, safety, and security, as a necessary prerequisite for any reforms; and outline a path to legal status – not citizenship – for those who are already here. This is, as it happens, pretty much what I understand Marco Rubio’s position to be now, where he ended up after getting burned by going too far in one direction. But all the candidates face a challenge here: they will need to convince voters they aren’t just telling donors one thing while saying something else on the stump. This could prove difficult, particularly if it’s exactly what they’re doing.

Over the weekend, lawmakers and labor unions in California, the nation’s most populous state, reached a tentative agreement to gradually raise the minimum wage to $15 an hour over the course of the next several years.

Democratic Gov. Jerry Brown had opposed prior legislative proposals over the issue, but finally acquiesced after labor unions garnered enough support last week to qualify an initiative for the Nov. 8 ballot. The deal still has to go through the state legislature, but most anticipate legislators will approve it, thus avoiding the costly campaigning that would result from a squabble at the ballot box.

California’s compromise comes as part of a growing national movement to hike up minimum wages across the county. Indeed, over the past two years, a whole host of states and cities have rapidly pushed through legislation to raise their base pay, likely in response to President Obama’s repeated calls for higher wages.

Twenty-nine states have minimum wages that exceed the federally mandated $7.25 per hour. Heading into the 2016 election, the issue remains hotly contested and politically potent, with Republican presidential candidates in fierce opposition to, and Democratic candidates in strong support of, a dramatic increase in the federal minimum wage.

While many cities have forced local employers to pay artificially higher wages, the issue remains far from settled. Just last month, for instance, Alabama Gov. Robert Bentley signed a bill prohibiting Alabama towns from increasing their wages above the state’s, a move that came in response to the Birmingham City Council voting to raise their city’s base pay to $10.10 an hour.

In stark contrast to the reaction from California, many have since decried Alabama’s bill (Hillary Clinton’s campaign even characterized it as “disturbing“). Yet while opposition to wage hikes may be politically unpopular, more states should consider adopting laws like Bentley’s before it’s too late. As California’s deal demonstrates, the “fight for $15” is moving beyond just cities and towns. It now has the power to influence policy at the state level.

Jobless in Seattle

My opposition to minimum wage increases comes as a direct result of my own experience searching for jobs as a new resident of Seattle, Washington, a city that currently has one of the highest minimum wages in the nation. In June 2014, the Seattle City Council, composed of just nine members, unanimously voted to increase the city’s base pay to a whopping $15 an hour, to be gradually implemented over the course of several years.

On January 1, 2016, the newly mandated minimum wage rose to $13 for larger companies (those that have more than 500 employees in the United States), and $10.50 for smaller employers (those with fewer than 500 employees in the United States). On top of this, Washington state law now requires businesses to adhere to this minimum even for tipped workers, a rule that only six other states have on the books.

In December, I found myself needing a break from college, for a variety of reasons. So at the close of last semester, I decided (rather impulsively, as young people are wont to do) to take my spring semester off from the College of William and Mary and move out west to try my luck in Seattle, a place I had only visited once before.

My parents, although grateful to have one less semester of ridiculously high out-of-state tuition to pay for, let me know that I’d need to fund the venture myself. I had secured an internship in the Seattle area, but it was unpaid, so I knew I’d have to find additional part-time work very quickly.

Having a combined two years of serving experience and close to five years of total experience in the customer and food services industries (which is literally as much as you can ask for from a 20-year-old college student), I assumed I’d be able to find a restaurant gig in no time. So, after reassuring my parents all would be well in the financial department, I boarded a plane in Philly a few weeks later and made the move.

Yet seven weeks and more than 70 job applications later, I still have yet to land a part-time, minimum wage job. I’ve spent the majority of the last two months stalking online job sites and entire days traversing the various neighborhoods of Seattle, filling out applications and inquiring about job opportunities at any restaurant, coffee shop, retail store, or other service-oriented establishment I can find.

Having squandered all of the money I had saved to get myself through what I thought would be a brief job-hunting period, I now find myself faced with the reality that if I don’t find work very, very soon, I’ll have to cut my break short and move back to the East Coast.

Higher Wages Mean Higher Stakes

At first, I was utterly dumbfounded by my lack of success, and figured only bad luck was to blame. After all, I had been hired at every single one of my past serving jobs within only a day or two of searching and applying. I’d have to find something in Seattle eventually, I thought; I’m young, competent, and college-educated, and serving is by no means a highly skilled occupation that requires degrees or extensive training. I know how to make a good impression with prospective employers, and I already have years of experience in the food services industry. What more could these people want?

But soon enough it became clear, through talking with potential employers and local college students also trying to find work, that my failure to land a job was likely due, at least in large part, to Seattle’s absurdly high minimum wage.

Employers, especially in the restaurant and food services industries, are far less willing to take chances on who they hire with so much money on the line. I was shocked to learn that some restaurants—comparable in quality to the ones that hired me with little or no experience on the East Coast—here required a minimum of three to five years of restaurant experience, even for support staff positions like hosts and bussers. I had multiple managers glance at my resume, see that my past jobs were seasonal or temporary, and tell me upfront that unless I could commit to at least a year of labor, they simply wouldn’t hire me, despite my qualifications.

Contrast this with my past experience working in Pennsylvania and Virginia, states that have a minimum wage of $7.25 per hour for non-tipped workers and a base pay of $2.13 per hour for positions that do receive tips. To the uninformed observer, this situation looks a lot worse than the progressive system Washington has put in place, and admittedly, after taxes most of my paychecks came out to little more than $0.

But in reality this wasn’t an issue, because the tips easily made up for the hourly wage I was missing. Working 30 hours a week, I was able to bring home around $500 per week, which translates to about $17 per hour and $26,000 a year. According to the Foundation for Economic Education, this is just about enough to keep a family of four above the poverty line. That’s only part-time work. A full-time server in your average successful restaurant would be able to make even more than that.

Restaurateurs in states with the $2.13 per hour minimum wage requirement have much more opportunity for variety in their hiring practices, for the cost to train someone is little, and the tip-based salary incentivizes individual employees to improve on their own while allowing the business to keep most of its profits. They can usually hire year-round, and can afford to choose from a much more diverse applicant pool. This is likely why I was able to secure my first restaurant job, when I was 18 years old and had no prior serving experience, as a summer employee in a busy Mexican restaurant.

Even for other industries dominated by minimum-wage jobs, such as retail, maintenance, construction, and transportation, a $7.25 hourly rate allows for similar hiring diversity, and also enables a company to take on twice the amount of employees as it would be able to in a $15 minimum-wage state. It should surprise no one, for instance, that nearly all of the states with the most minimum-wage employees are in the South, an area where only two states—Florida ($8.05 per hour) and Arkansas ($8.50 per hour)—have minimum wages above the federally mandated $7.25.

Given this, it makes sense that Seattle employers forced to pay the new minimum wage even to tipped employees only feel comfortable hiring highly qualified prospects who can prove on paper they’ll be a safe long-term investment. These restaurateurs and store managers don’t want to risk hiring a relatively inexperienced young adult they’ll have to spend precious time and money training, and who may easily grow complacent in the job once he realizes he’ll get paid $13 an hour no matter the extent of his stay or the quality of his job performance.

Who Makes the Minimum Wage?

Higher minimum wages favor people who have already made a career out of these jobs—or, in other words, the very people minimum wage jobs are not intended for.

Political pundits and proponents of minimum wage increases predicate their arguments on the false notion that the majority of minimum wage-workers are poor breadwinners who depend exclusively on their jobs for survival. Indeed, to garner support for reform, the Left often cites the fact that a family of three or four cannot live on the $15,080 annual income a full-time employee theoretically makes with the current federal minimum wage of $7.25 per hour.

Democrats frequently tout this point and deploy their new favorite term “living wage” to purposefully obscure the reality that most minimum wage workers do not, in fact, rely on their entry-level jobs to fully support themselves or their families.

The most recent statistics by the Pew Research Center support this assertion. According to the 2014 research, 50.4 percent of all minimum-wage workers are ages 16 to 24, 64 percent work only part-time, and 55 percent are employed in the leisure and hospitality industry (including food preparation and other service-related jobs). The majority are white (77 percent), and well over half (62 percent) are women. In other words, the typical minimum wage worker is someone like me: a young adult who’s working part-time to make money supplemental to an existing (family) income.

The overall share of hourly paid workers earning minimum wage or less has also significantly decreased over the past few decades: in 1979, they represented 7.9 percent of all wage and salary workers, whereas today they represent only 2.6 percent of that demographic. With such a small percentage of the working population earning base pay or below, it’s unlikely that increasing the federal minimum wage by 50 percent or 100 percent would do much at all to improve the overall poverty rate.

Minimum Wage Hikes Hurt Those They’re Intended to Help

Basic economic logic lends credit to arguments against minimum wage hikes. If employers now have to pay their employees twice the amount they used to, they have two options: reduce the number of their employees, or raise the prices of their products—a move that drives down business and thus leads to job elimination anyway.

In Seattle, this is exactly what’s been happening. As research from the widely respected American Enterprise Institute explains, early evidence from the Bureau of Labor Statistics (BLS) suggests that “since last April when the first minimum wage hike took effect: a) the city’s employment has fallen by more than 11,000, b) the number of unemployed workers has risen by nearly 5,000, and c) the city’s jobless rate has increased by more than 1 percentage point.”

Thanks to the growing cost of labor, fast food prices are currently on the rise in Seattle, and restaurants here and in other cities are now considering getting rid of tipping altogether, proposing they instead increase their prices by 20 percent. While this might help restaurateurs pay their employees the new mandatory minimum, I can say from my own experience it would also likely dis-incentivize servers and diminish the quality of service.

Wage hikes not only force more people to compete for fewer positions, but they also pit people like me against older, more seasoned, and perhaps more qualified individuals who look a lot more attractive to Seattle employers.

I’m a young, educated, white male who comes from an upper-middle-class background. In other words, I’m exactly the type of person that society supposedly favors over all the rest. If it’s this difficult for me to land an entry-level, minimum-wage position, then what must it be like for more disadvantaged individuals, the very people compassionate liberals likely have in mind when they advocate for a spike in the minimum wage? Surely the poor inner-city teenager lacking education and job experience, or the struggling single mother who needs to work much more than just part-time to support her children, will lose out to other applicants even faster than I did.

The fact that cities like Seattle, and now states like California, can freely experiment with economic policy demonstrates the virtues of our nation’s federalist system. However, our local laboratories of democracy aren’t always foolproof. Sometimes, they get it wrong.

And I’ll bet my non-existent income that in time, the recent minimum wage hikes in cities and states throughout the country will provide further proof of this reality. Alas, in the meantime, my job search continues.

Correlation does not prove causation. But if it did, the Center for American Progress (CAP) would have proved unions reduce wages. Of course, correlations are flimsy evidence, so the study proves little. But the episode illustrates why it’s hard to blame America’s economic problems on organized labor’s decline.

CAP’s new report piggybacks off a recent Pew study finding the middle class has shrunk over the past generation. The CAP authors argue unions help workers land middle-class jobs. They theorize that falling union membership has thus contributed to the middle-class decline. So they performed a “shift-share” analysis and concluded that the decline in unions explains half of the drop in middle-class membership. That sounds quite troubling.

However, more than three-quarters of the contraction of the middle class occurred because Americans moved into higher-paying jobs. Pew and CAP both found the middle class has shrunk primarily because Americans have gotten richer. Taken at face value, CAPs results show that the decline in unions helped Americans get ahead. The authors did not highlight that conclusion, but their results unequivocally show it.

Why Union Members Come from the Middle

Nonetheless, conservatives won’t (or at least shouldn’t) be touting this report. The CAP study shows nothing about how unions affect pay. It looked only at correlations. The CAP authors note that union members typically belong to the middle class. They assumed union membership causes middle-class earnings and went from there. But causation runs in the opposite direction too: being in the middle class makes workers more likely to fill a union job.

Unionizing changes how firms hire and which employees want to work for them. Union work rules make firing poor performers very difficult. So unionized firms hire very selectively. Knowing they cannot get rid of unproductive workers, they go to great lengths to avoid hiring them in the first place. At the same time, union seniority systems repel top performers. The union contract limits them to a seniority-based raise, no matter how hard they work. When firms unionize, many of their top employees take their skills elsewhere.

Consequently, union members disproportionately come from the middle of the productivity and income distribution. CAP’s finding that union members disproportionately come from the middle class is completely unsurprising. Less-skilled workers can’t get union jobs; more skilled workers don’t want them.

The CAP authors made no effort to disentangle this correlation from a causal effect of unions on wages. Their analysis shows nothing more than: “Over the past 30 years, higher earnings lifted many Americans out of the middle class. At the same time union membership declined.” Perhaps the two are related, but CAP’s report does not attempt to prove it.

Unions Don’t Raise Wages

This type of thinking pervades far too much analysis of how unions affect workers. Private-sector union density has declined steadily since the 1950s. Many analysts will point that out, point to another economic trend, and conclude, “This wouldn’t have happened with stronger unions.” President Obama himself recently made similar arguments.

Looking beyond correlations to causation suggests unions deserve little credit or blame for recent wage changes. Brigham Frandsen, a Massachusetts Institute of Technology-trained economist, recently examined every company whose workers voted in a National Labor Relations Board union election since 1980. He combined this election data with income and employment data from tax records. In total, his data covers 1.7 million private-sector workers who voted on unionizing. This data allowed Frandsen to examine causation, not just correlation. He could compare pay at companies that unionized to similar companies that did not.

Frandsen expected to find unionizing raised average pay. Instead he found the opposite. Average wages fall about 3 percent at newly unionized companies. Looking deeper, Frandsen found this happened because top performers often left unionized firms. That dragged down average wages. Looking only at workers who stick with their firm, Frandsen found unionizing has no effect on pay. On average, private-sector unions do not cause their members’ pay to rise or fall.

How is that possible? Unions certainly want higher pay. But unionized firms compete against non-union businesses. When unions demand above-market wages, employers must either raise prices or reduce quality. That drives away customers, as the Detroit automakers famously demonstrated. Unions understand this and prefer not to eliminate their members’ jobs. So they aim for contracts that keep unionized firms competitive. That generally means paying market wages.

CAP’s report found shrinking union membership has raised wages. Other reports claim the opposite. But these studies only examine correlations. Looking further to causation shows that private-sector unions have little control over pay. Love them or hate them, unions have little effect on the middle class.

With every headline about underfunded state and local public pensions, voters are coming to regret the overly generous retirement deals their representatives have negotiated with government unions. Dr. Joe Nation of the Stanford Institute for Policy Research puts the cumulative debt for all public pension systems at $5.599 trillion, or $46,884 per household.

But amid the growing concern about how state legislatures and city councils have failed to adequately fund retiree pensions, we must not forget that public workers have a performance issue of their own. Voters might question compensation packages for police, firefighters, and many other public employees, but at least the contracted services were provided.

The same cannot be said of primary and secondary educators who, according to the U.S. Census Bureau, comprise 99 percent of all local public employees and more than a third of all government workers.

Our Education Monopoly Strangled Quality

To appreciate the extent to which the teaching profession has consistently shortchanged taxpayers, we must go back more than half a century to October 4, 1957, when the Soviet Union put the world’s first satellite into orbit. Literally overnight, there was a nationwide clamor for higher academic standards, especially in math and science.

A very contemporary education reform—school vouchers—was already on the table. Two years earlier, the late economist Milton Friedman had published a seminal article on “The Role of Government in Education,” which argued for allowing parents to direct the public funding for their children to schools of their choice.

Although widely debated in Congress and state legislatures, Friedman’s proposal was successfully resisted by the National Education Association (NEA) and other unions who argued that professional educators, armed with the tools of social science, would do a much better job. By the early 1960s, independent teacher colleges across the country were rapidly becoming graduate departments of major universities and, financed by President Lyndon Johnson’s Great Society legislation, loading the curriculum with courses on human development, intelligence measurement, and motivation.

What followed was a succession of instructional fads, typically based on the theory of some briefly popular psychologist. Educators experimented first with “discovery learning,” a technique that had children teach themselves, and later with “open schools,” which tried to improve learning by literally removing the walls that separate students from teachers and different age groups from each other. There was also considerable tinkering with standards for university education departments, although federal funding was never contingent on the teaching abilities of a school’s alumni.

Unions Care About Money, Not Learning

Despite their promise to the American people, neither of the two major unions ever attempted to evaluate any of these fads. According to a 2004 paper on “Teacher Union Support of Education Research and Development” by University of Michigan Professor Maris Vinovskis, the only studies produced by the NEA and American Federation of Teachers (AFT) between the early 1960s and the early 1980s focused on how to negotiate more benefits from local school boards or how to poach on each other for members.

By the time President Ronald Reagan’s Secretary of Education, T. H. Bell, formed his National Commission on Excellence in Education to assess the state of learning in America, SAT scores in the verbal and math sections had fallen 50 and 40 points respectively from 1963 and only a fifth of 17-year-olds could write a persuasive essay. The commission’s official report, “A Nation at Risk,” famously concluded that “the educational foundations of our society are presently being eroded by a rising tide of mediocrity that threatens our very future as a Nation and a people.”

At this point the NEA and AFT could still have lived up to their Sputnik-era promise, but instead redoubled their efforts to preserve the status quo, contributing money and volunteers to political candidates who opposed substantive education improvements. Thus even many conservative politicians were cowed into silence, and few of the Bell commission’s recommendations were enacted or even allowed to be tested.

Indeed, the only major instructional change during this period was the rise of the “whole language” approach to reading. Based on the theories of MIT linguist Noam Chomsky and University of Arizona professor Kenneth Goodman, it instituted the now widely discredited practice of teaching children new words by having them guess at their meaning.

Should We Pay You to Fail Our Kids?

It was not until 2001 when even many teacher union allies, including Rep. George Miller (D-CA) and Sen. Edward Kennedy (D-MA), helped pass President George W. Bush’s No Child Left Behind Act, the first serious federal effort to enforce some degree of school accountability. But even then, unions skillfully lobbied for riders that prevented interference with local teacher contracts and effectively neutered Section 9532, which required states to transfer children from “persistently dangerous schools” to safer placements.

Coming down to the present, it is impossible to fairly discuss what taxpayers owe retired public educators without remembering that for half a century Americans entrusted their children to a profession that pledged unrelenting self-improvement in return for its autonomy and generous benefits. A few genuinely promising innovations, such as charter schools and voucher programs targeted to special-needs children, were implemented during the period, but only by overcoming fierce union resistance.

All this is not to suggest that every public-school teacher has intentionally underperformed or failed to do his or her best within a system well beyond one person’s control. But if the union argument today is all members who showed up for work during the last 60 years deserve their promised compensation, it is equally true that the taxpayers who employed them have the same right not to be stuck with an academic lemon.

The public pension crisis cannot be resolved without a recognition that a contract binds both parties and that, in the case of educators, the voters’ failure to adequately fund pensions has been more than matched by the unions’ failure to prioritize excellence. If there is to be remedial funding of teacher pensions, which inevitably means higher taxes and fewer government services, public unions must first end their resistance to meaningful education reform.

Scrolling through my phone to check the weather, I could not help but read the click-baity coverage of state and local politics, and the hot-button issue of the minimum wage caught my eye.

All I want is an honest representation of the debate instead of biased garbage that intentionally makes one side to look like backwards, stingy monsters. KCCI-Des Moines reporter Marcus McIntosh reported that the Iowa legislature cut some people’s hourly pay rate just in time to kill the scheduled minimum wage increase in Polk County, the eastern half of Des Moines.

In three paragraphs, McIntosh stated that Republicans voted for this proposal but without explaining why. He devoted four paragraphs to explaining why Democrats did not support the bill. Besides the media’s natural affinity for Democrats, their profit motive is to rile up the blue-collar folk to share this story, allowing KCCI to collect a lot of advertising revenue.

Maybe I can shed light on why Republicans would rescind the minimum wage increases more liberal population centers in Iowa have made. I wrestle with conflicted feelings since this is only the second full year in my life that I have had the privilege to work full-time hours, yet only took home $23,000 gross.

I worked as a dishwasher in a restaurant and now in an entry-level office position. At the restaurant, I saw my weekly hours cut to 35 from 45 to 50 when my employer could not afford Obamacare’s insurance mandate. I feel the pain, and I see coworkers struggling to make budgets on blue-collar pay. This is why it hurts to think substantively about minimum wage policy when the emotional argument is so very strong: I want higher wages for everyone, but raising the minimum wage will not do that.

Minimum-Wage Pay Goes Farther In Some Places

Yes, I make $23,000 per year gross, but I live in a small city in northwest Iowa, Fort Dodge. Wages have not seen dramatic rises here and housing prices have largely remained stagnant—which is a very good thing. If I had not racked up debt for the music degree collecting dust on its frame on my wall, I would have a house bought and paid for by now. My rent including utilities is $300 per month, and my grocery bill can go as low as $50 per month. I can drive or ride a bicycle to work in the same amount of time.

To get me to move to a city, where living close to work could be interpreted as a death wish because housing prices would require me to live in a crime-heavy, dumpy neighborhood or beyond my means in trendy apartments, I would need at least $15,000 more to have the same lifestyle I have in the town some disparage as “Fort Dirty Dodge.” However, this is the beauty of the market. With fewer resources, I choose to live in Fort Dodge, where my standard of living is much better than if I chose to live in a large city.

I do not “need” to make more than I do already. Don’t hear me wrong, I would love to make more, but “need” and “want” are not synonyms. A starter two-bedroom house that is move-in ready, but needs a few updates or renovation, starts at $40,000 in Fort Dodge.

Let’s say I want to live in a little bit better neighborhood, for the same basic house with roughly the same-sized yard, but closer to schools and in a more middle-class neighborhood. This house costs $70,000. There are super-nice neighborhoods with a handful of mansions or acreages that go for $150,000 to $300,000, even up to $400,000, but as far as this twenty-something is concerned, housing is quite affordable in my town.

Rent for a two-bedroom apartment is $600 per month after utilities, and I have a roommate, so that leaves me with plenty of room to pay off debt, have an emergency fund, save for retirement, save for a down-payment, invest, give, whatever. All things considered, $23,000 does not look so bad. In Des Moines, starter homes in the decent neighborhoods start at $100,000 or more for what $40,000 would get me in Fort Dodge. Large city living is a giant ripoff, as far as I am concerned.

Raising Minimum Wages Hurts Poor People the Most

Des Moines does not need to artificially raise the floor of their economy to make it more difficult for new businesses and entrepreneurs to enter its booming market. If it raises the minimum wage, Des Moines will block the poor from even entertaining the thought of attempting to achieve rags to riches by increasing the cost of everything. Des Moines does not need to see costs go up any more than they already have with the new construction, gentrification, and high city taxes.

If lawmakers raise the minimum wage for Polk County but not surrounding areas, the areas inside Polk County will continue to collapse as businesses relocate to adjacent areas to pay wages closer to what their business can sustain. Remember that similar cities compete for the types of jobs Des Moines has been attracting lately, and making it more expensive to run a business in Des Moines ultimately means fewer businesses will locate there. Artificially raising wages increases unemployment.

Maybe Republicans should let the People’s Republic of Polk County make their mistake, but that would not be good for the state. In addition, local officials see low-hanging political fruit with the tired political tropes of Democrats looking out for the little guy and the Republicans being stingy and in bed with business interests to the detriment of the poor worker. Now, there are more workers than business owners, but business owners provide the jobs.

Just as Obamacare had the unintended consequence of demoting me to part-time work when I was just getting on my feet after college, increasing the minimum wage will have a whole host of negative unintended consequences. When other towns have forcibly increased wages, they’ve increased the cost of living as restaurants, hotels, and businesses in general raise prices for consumers to cover their newly higher costs of doing business. Rich people can obviously afford this far better than poor and working-class people.

Democrats try to hide this by blaming greedy business owners to get people’s emotions activated so their good sense can’t kick in, but trying to argue with this law of human nature is like trying to outlaw gravity. I wish I could side with the emotional argument for a higher minimum wage, but artificially high wage floors hurt poor people the most.

The author requested anonymity to keep his personal financial details private.

I recently argued that we don’t have an income inequality problem. My central point was that major studies from the University of Michigan, the U.S. Treasury, and the Federal Reserve have all documented that, despite what we read in the news about “income stagnation,” individual incomes tend to rise over time.

However, I received several emails insisting that we do indeed have an income inequality problem. Given how common four of these arguments are, they are worth addressing.

1. Women have increasingly had to work to support their families. In the 1950s and ‘60s, a single income was enough to support a middle-class family. But today two incomes are required just to keep up. 

This argument is both false and demeaning to women. First, prior to the 1960s, most women stayed home to manage a household, which included chores, cooking, cleaning, laundry, child care, shopping, and other crucial tasks. Women today often still perform these duties, yet we discount their role by considering only employment outside the home—which was traditionally the male role—as work. Ironic we should complain of “patriarchy” while we undermine the traditionally female role and encourage the traditional male one.

The truth is homemaking is some of the most laborious and important work one can do, and it often requires more time than work outside the home requires. According to economists Michael Cox and Richard Alm, the average workweek of a homemaker in the 1950s was 52 hours, while the average for her husband was 39 hours.

Second, the idea that women have been forced to work outside the home to keep up with flat or declining wages is wrong. In fact, working women are a sign of economic advancement. Why? As technology has improved, women have traded working in the home for working outside the home. Advancements like dishwashers, food delivery services, washing machines, nannies, and other child-care arrangements have enabled women to choose whether to be a homemaker.

Many have chosen outside careers, which has resulted in more leisure time. According to a study from the University of Maryland, by the late ‘90s the typical American had 40 hours of leisure time per week, compared to just 35 hours of leisure time in 1975. Meanwhile, the average work week in 1960 was 38.6 hours, while the average work week in 1996 dropped to 34.4 hours. In a word, women work outside the home not because they have to, but because it affords a higher standard of living.

2. Wages have stagnated since the 1970s.

The myth of wage stagnation is commonly perpetrated by looking at average real wage statistics. But there are several problems with using average wages as a measure, which I’ve explained before, here, here and here. Briefly, one big problem is that average wage statistics are skewed downward due to the large wave of immigration we experienced in the 1980s and 1990s. Even though many immigrants were finding work and improving their lives, the influx of low-skilled work pulled wage averages downward, which makes it appear like there was stagnation when there really wasn’t.

A more accurate measure is median income statistics, which progressive Stephen Rose has used to show that, adjusting for inflation, wages have increased by 33 percent since 1979. Furthermore, other measures of economic well-being, such as total compensation and wealth, have also steadily increased since the 1970s. See this graph, for instance, from the St. Louis Federal Reserve:

Furthermore, while there is no doubt that real wages have gone up, simply observing wages doesn’t tell us their true value. For instance, if a male who earns $20,000 in 1960 earns, in inflation-adjusted dollars, $25,000 today, that may not look like much of an increase. But what if the prices of goods and services relative to wages dropped over that period? What if milk costed $1 in 1960 but costs $0.50 today?

In fact, that is precisely what has happened with regard to many goods and services. But even where there hasn’t been a drop in absolute dollars, it takes fewer work hours today to afford things like food, cars, TV, vacations, clothing, and sundry other items relative to work hours required in 1960.

Moreover, these goods and services have vastly improved over time. An average car today, for example, has technology that surpasses that of even the most advanced vehicle from 1960; and so, too, the size and comforts provided by today’s homes and apartments exceed those of 1960, which brings me to the next point.

3. Home prices are higher today than in in 1970.

Not only are today’s homes bigger, but they include far better technology and comforts, like central air and heating, extra rooms and bathrooms, furnishing, kitchen appliances, and garage space. Simply looking at the price of housing in 1970 versus the price of housing today fails to reflect these improvements. But accounting for the extra space in the average home today, in terms of work hours housing costs have declined.

“In 1997,” Cox and Alm document in “Myths of Rich and Poor”:

a new, single-family home cost six times what it did in the early 1970s–in dollar terms. After adjusting for the increase in the size of new homes and higher pay, however, most of the inflation disappears. A 1,975-square-foot, median-priced new home cost 9,961 hours in 1970 and 11,039 hours in 1997, or 1,078 additional hours. Over 27 years, then, the average work time required to buy a new home rose only 10 percent, or the equivalent of six months. Mortgage rates are a percentage point lower than they were in the early 1970s. On a house with a 5 percent down payment, the break in interest payments will trim the work cost of a new house over a 30-year purchase by 1,561 hours, a reduction of nine months on the job needed to pay for the house. Another consideration involves a decrease in household size during the past quarter century. Each residence today houses, on average, fewer people than it did in 1970, so in buying a median-sized home each person is getting more square feet. If we take into account shrinking household size, then an individual’s living space is actually 6 percent cheaper than it was in 1970. (emphasis added)

4. The cost of a college education has skyrocketed.

College costs have spiraled out of control, and certainly require attention. But this is due in large part to government subsidies, not to declining wages. When government subsidizes something, prices rise. For instance, if government gave us all $5 coupons to purchase yogurt, the demand for yogurt would spike and prices would rise so that supply meets demand. At that point, people would then complain the cost of yogurt has increased so government would provide us $6 coupons, and so the cycle would continue.

The same principle applies to college tuition. Is it any surprise that the two areas where government plays its largest roles—education and health care—have witnessed the most unmanageable cost inflation? As with health care, university costs would decline if we promoted market forces rather than increased government subsidies.

In sum, statistics clearly demonstrate income gains and better standards of living than ever before. Still, the important point is not to get bogged down in statistics, especially when discussing statistical units like “families,” “households,” “the top 1 percent” or even “average” or “median” wages. The truth is individuals and how they fare over time is what’s important, and in that regard the evidence is irrefutable: People move up the economic ladder over the course of their lives.

Last week, Seattle Mayor Ed Murray announced a proposal to eliminate the city’s use of special certificates that allow companies to pay wages below the city’s $15 minimum wage. A city council vote is expected before the end of this year.

Who is affected by these certificates? Murray answers: “The point of our historic $15 minimum wage law was to build universal equality in Seattle. A loophole allowing subminimum wages for disabled workers has undermined that goal.”

In the name of social justice, Seattle plans to make workers with disabilities unemployable. Although many will be forced out of work they voluntarily engaged in, workers with disabilities should apparently feel good about how “equal” they will be to the larger public. Proponents of eliminating wage certificates believe they are doing a social good by forcing up the wages of persons with disabilities, but the result will be the opposite: the aggregate wages that persons with disabilities earn will decline as businesses are forced to lay off these workers or cut their hours.

For the supposedly pro-science political left, refusing to recognize that persons with disabilities are already unequal is a refusal to accept reality. Persons with disabilities lead much more difficult lives than most of the rest of us, and attempting to legislate them into wage equality will only make life more difficult. After all, if an able-bodied person struggles to compete in the market for a $15 minimum wage, how will a person with a disability compete?

Employment is already difficult to find for persons with disabilities. The Bureau of Labor Statistics (BLS) reported recently that in 2016, approximately 18 percent of persons with a disability were employed. While many persons with disabilities simply cannot be accommodated at a place of employment, those who can should be afforded the dignity of being able to compete for those jobs. According to the same report, 34 percent of persons with a disability who are employed work part time. These are the jobs that will be lost if Seattle forces companies to pay higher wages to the adaptive population.

Publix, a supermarket chain in the southeast United States, does an excellent job of accommodating and employing persons with disabilities. The persons with disabilities they employ aren’t looking for a “living wage” or livable income—they want a place to engage in meaningful work, build relationships, and achieve a more normal life for themselves.

In fact, many workers with disabilities are paid less than the national minimum wage, since the Fair Labor Standards Act (FLSA) allows for the accommodation of subminimum wages. Far from a “loophole,” all 50 U.S. states also have wage certificates for persons with disabilities or defer to the FLSA certificates, including the state of Washington.

Companies like Publix could find able-bodied workers to fill their positions, but this would erase the societal benefits of them accommodating workers with disabilities. Employees with disabilities get a chance to make an impact in the world and build relationships while receiving a supplement to their family’s income. The rest of us get to interact with people who may be different from us, potentially raising awareness about certain disabilities and hopefully eliminating negative stereotypes that sometimes exist.

Rather than punishing persons with disabilities who are determined enough to gain employment or pretending they are exactly the same as everyone else, we should be celebrating them and the businesses that accommodate these valuable members of our society.

This fall, ten states will likely raise their minimum wages, either due to new state labor department regulations or legislation. These states are trying to make their economies fairer. But what they miss is that a higher minimum wage would widen inequality and hurt the most vulnerable Americans.

Economists agree that raising the minimum wage will help some employees and hurt others. An analysis of California’s higher minimum wage, for instance, found that raising the minimum wage by 10 percent decreased single mothers’ employment by 6 percent. When low-skilled labor is more expensive, employers naturally turn to substitutes like outsourcing or automation. They also cut workers’ hours to maintain profit margins.

Most perniciously, lower-skilled Americans may not be hired at all: if the minimum wage rises to $15 per hour, then McDonald’s isn’t going to lose money and hire more low-skilled staff who only produce $9 per hour of value. A study by labor economist Joseph Sabia found that when California raised its minimum wage to $10 per hour, the cost was 191,000 jobs not being created. Those job losses hit the working poor hardest.

Hurting the Neediest People

While raising the cost of labor forces employers to lay off some workers, it helps those who remain. Unfortunately, those who are helped are the ones who least need it, and those who are hurt are the ones who can least afford it.

Minimum wage workers are often students: 50.4 percent of minimum wage earners are younger than 25. With an average family income of $65,900 per year, these young workers are mostly saving up for a new iPhone. They’re working side by side with low-skilled adults who need their job to keep food on the table.

But younger workers from wealthy families have cultural advantages over low-skilled adults that help them keep their jobs in tough times. They’re often better educated, have the resources to dress professionally, and have been socialized to interact with superiors. They have more connections and social capital — a restaurant is less likely to fire a young man whose father knows the owner.

These employees also have more reliable transportation than their counterparts do. The Brookings Institute notes that in 2011, 60 percent of households without cars were low-income. This matters: public transportation is less reliable and can cause employees to show up late to work. If an inner-city waitress can’t make it to work on time because her bus runs late, she’ll be first on the chopping block when her restaurant needs to downsize.

Young workers from wealthier families are more likely to keep their jobs than their low-income counterparts. If the minimum wage rises and a firm has to lay off 1,000 workers to make ends meet, poorer Americans will bear the brunt of the losses. Duke University researchers found that when the minimum wage rose, adults are pushed out of low-paying jobs by better-educated teenagers. The group with the worst career prospects are losing their jobs, while the group with the best career prospects are not.

Minimum Wage Hikes Especially Hurt Minorities

It’s not just unskilled adults taking losses: minorities of all ages are disproportionately punished by higher minimum wages. The first minimum wage law—passed as part of the New Deal, in 1938—was motivated by racism. At the time, one congressional supporter argued, “That contractor has cheap colored labor…and it is labor of that sort that is in competition with white labor throughout the country.” Because black workers were paid less than white workers were, the minimum wage was seen as a way to prevent “cheap colored labor” by pricing black Americans out of a job.

Even in the twenty-first century, raising the minimum wage results in twice the layoffs for black teens as for white teens. A comprehensive study of 16- to 24-year-old males without high school diplomas found that raising the minimum wage led to unevenly distributed layoffs. When the minimum wage rose by 10 percent, white teenage employment dropped by 2.5 percent. Black teenage employment dropped by an astonishing 6.5 percent.

Poorer, minority employees suffer disproportionately from these laws while young, white workers from wealthier families reap the rewards of higher wages.

Minimum Wage Laws Advantage Big Business

The minimum wage also creates another kind of inequality: wage laws like these make labor more expensive, and multinational corporations can bear these costs better than smaller competitors can. Corporate giants have higher profit margins, so they can pay higher wages if they need to.

They also have the resources to automate. In response to rising labor costs, Wendy’s announced plans to install ordering kiosks in 1,000 of their stores. McDonald’s is unrolling touchscreen kiosks in all 14,000 stores, starting with cities and states with the highest minimum wage. Bulk orders of expensive kiosks aren’t an option for the mom-and-pop burger joint down the street.

Neither is raising wages to comply with the new law. Smaller companies often have tiny margins, so they’re the first to be driven out of business. When Seattle raised its minimum wage, mom and pops were hardest hit.

This explains why big firms like McDonald’s endorse raising the minimum wage. It’s unlikely that cold-eyed executives were visited by three Christmas ghosts and decided to pay their staff more. If that were the case, they could simply raise wages. Rather, McDonald’s leadership realized that a higher minimum wage would squeeze their smaller competitors, entrenching their market dominance.

For McDonald’s and other big corporations, a higher minimum wage is just another corporate protection to lobby for. They have an incentive to push for a higher minimum wage, because it hurts their smaller competitors more than it hurts them.

Early minimum wage proponents knew what they were doing, by pricing “undesirable” workers out of the labor force to perpetuate minority poverty. Let’s not finish their work for them.

The discrimination-based pay gap between men and women is a myth that refuses to die. Despite repeated debunking from both academic and media outlets across the political spectrum, the notion that women are paid less for the same work as men still underlies campaigns and trends hashtags.

Lack of evidence of discrimination hasn’t stopped the Left from suggesting intrusive measures to fix what isn’t broken. Pointing to countries like Iceland and Slovenia, Salon advocates for government certification of companies’ “equal pay policies,” and even praises Rwanda for being “ahead” of the Unite States in this regard, while acknowledging that their high female workforce participation rate is largely the unintended result of a genocide that disproportionately slaughtered men.

The mainstream media also continues to cite the pay gap as a problem, disregarding evidence that it’s merely the result of free choice. Recently, an even more convincing rebuttal has arisen from the tech sector.

Uber, which pays its drivers not on an inherently subjective individual basis but via a formula that takes into account time and mileage driven, still has a 7 percent pay gap between male and female drivers. That’s right: a company that allocates salary in a way that is necessarily blind to an employee’s sex has still generated a pay gap, because men and women make different choices.

It turns out that female Uber drivers work shorter hours, are less likely to work during peak times, and drive more slowly. Because the compensation structure is automatic, Stanford researchers were able to pin down the three factors that caused the gap: experience on the platform, willingness to work at peak times and in busy areas, and driving speed preferences.

We can safely assume that similar choices — for example, more flexible fields of study and employment, shorter hours, and desire for more time with family and friends — are largely responsible for the continued differences between average male and female salaries in other fields.

Analyzing Uber’s compensation sex differential in a structure that leaves no room for subjective decision-making from the employer should finally put to bed the lie that workplace discrimination is causing a significant wage gap between men and women.

Uber’s wage gap is just one more demonstration that discrimination is not a major factor holding women back in the workplace today. The so-called pay gap exists because men and women are not identical, and because we are free. That’s not cause for handwringing and quotas. Instead, our diversity is something we should celebrate.

Neel Kashkari, president and chief executive officer of the Federal Reserve Bank of Minneapolis, joins Ben Domenech on The Federalist Radio Hour. They look back at the 2008 financial crisis and discuss Dodd-Frank, the current labor market, and cryptocurrency.

“We didn’t think when we were in the middle of the financial crisis, in our worst moments, we didn’t think we’d get a single dollar back from the TARP,” he said. “The fact of the matter is we got virtually all the money back for the taxpayers.”

Listen to the full episode:

For a movement meant to smash the patriarchy, Equal Pay Day shares one of its worst habits—the apparent inability to listen to actual women.

Equal Pay Day is a PR holiday established in 1996 by the National Committee on Pay Equity to highlight the “gender pay gap.” Today is Equal Pay Day, signifying “the date women must work full time up until to make the same amount that men made working full time the year prior.”

The calculation is not exact. The National Committee on Pay Equity, whose website design alone may set women back several decades no matter how much work they do, admits it picked a date in April to roughly symbolize how far into the new year women might have to work to make up the so-called gender pay gap (real wage statistics aren’t released until fall). In fact, if one calculates the number of days based on the most recently available data, Equal Pay Day should fall around mid-March, not in April.

This deliberate miscalculation is a good symbol for this whole endeavor. Despite the hype, Equal Pay Day is, at best, a simplistic understanding of the factors that create wage differences. At worst, it’s an intentional misrepresentation of a phenomenon that almost completely ignores the choices, wishes, and motivations of women in the workplace.

Equal Pay Day uses the Department of Labor’s “median earnings of all full-time working women and all full-time working men” to determine the pay gap. It is not a comparison of women and men doing equal work in various jobs. The campaign and its message, echoed enthusiastically by most media, implies the gap is a product of discrimination. Wage discrimination certainly exists (Hi, Hollywood!), but it is not the pervasive and punitive 20-percent figure equal-pay advocates suggest when other factors are accounted for.

Robert Samuelson wrote in 2016 about a Cornell University study by two married economists:

[I]f women were paid a fifth less for doing the same work as men, there would be pervasive discrimination. That’s how the pay gap is interpreted by many. They demand ‘equal pay for equal work.’ But that’s not what the pay gap shows. It’s simply the ratio of women’s average hourly pay to men’s average hourly pay. The jobs in the comparison are not the same, and when these differences are taken into account, the ratio of women’s pay to men’s rises to almost 92 percent from 79 percent.

They’re not the only economists to concede the pay gap isn’t as simple as Equal Pay Day suggests. Obama’s own head of his Council of Economic Advisors, Betsey Stevenson, conceded as much when pressed about Equal Pay Day statistics on Equal Pay Day in 2014.

‘If I said 77 cents was equal pay for equal work, then I completely misspoke,’ Stevenson said. ‘So let me just apologize and say that I certainly wouldn’t have meant to say that… ‘There are a lot of things that go into that 77-cents figure, there are a lot of things that contribute and no one’s trying to say that it’s all about discrimination, but I don’t think there’s a better figure.’

Obama’s White House Press Secretary Jay Carney had to concede the same when, according to the standard used by Equal Pay Day advocates, the Obama White House was found guilty of heinous wage discrimination:

If that’s your standard — which is a joke of a standard, but let’s leave that aside — the White House suffers from a deeply alarming pay gap. And a pay gap that hasn’t gotten better since Obama took office.

We have two possible scenarios here. Either the White House — the headquarters of Mr. Equal Pay himself — suffers from a whopping pay gap of 13.3 percent, practicing unconscionable sexism by paying its female staffers an average of five figures ($10,100) less than the male staffers, or the White House is guilty of deception about pay gaps.

Spoiler alert: It’s the latter. I realize the news cycle is now anaphalactically allergic to nuance, but discussing this subject this way gets us no closer to making the workplace hospitable or less discriminatory for women.

That’s because making the workplace work for women requires listening to women about what they want in a workplace. Every time women are polled about this or their choices are taken into account, we find that they are more likely to make choices based on quality of life issues and flexibility, not pay. This tendency leads to women being paid less, according to the Department of Labor’s median calculation, because they are more represented in less dangerous, more flexible work with fewer hours, closer to home.

A 2016 Gallup survey found women are more exacting than men when choosing a job. They rank as their top three concerns “the ability to do what they do best, greater work-life balance and better personal well-being, and greater stability and job security.” The biggest sexes gap in the study was on work-life balance: 60 percent of women consider it “very important” versus 48 percent of men. Another standout was, wait for it, pay:

Across all the factors that go into deciding to take a new job, increased income is the only one that is more important to male employees than to female employees: 43% “very important” for men versus 39% “very important” for women.

These differing priorities understandably impact pay. Women are more likely to take a job that pays less to gain flexibility and work-life balance. I’ve done it myself many times.

Yet, as AEI’s Mark Perry points out, there is no widespread recognition of “Equal Occupational Fatality Day” to highlight men’s overrepresentation in very dangerous fields (coal mining, line work, and law enforcement among them), which often pay more to compensate for risk.

Based on the BLS data for 2016, the next ‘Equal Occupational Fatality Day’ will occur more than 10 years from now ­­– on May 30, 2028. That date symbolizes how far into the future women will be able to continue working before they experience the same loss of life that men experienced in 2016 from work-related deaths. Because women tend to work in safer occupations than men on average, they have the advantage of being able to work for more than a decade longer than men before they experience the same number of male occupational fatalities in a single year.

There is no big “Equal Commute Day,” to acknowledge the gender commute gap:

[T]he 31% ‘gender commute time gap’ in the US that reflects the longer daily commute time on average for men (25.3 minutes) vs. women (17.4 minutes), see table above for 26 Organization for Economic Co-operation and Development (OECD) countries including the US.

Male college graduates, on average, also entertain employment options further afield from their universities than do women, thereby opening up more and possibly higher-paying opportunities. They also work several hours more per week on average than women.

For women, a combination of protecting family life, prioritizing young children, and dealing with rising child-care costs cause them to leave the work force entirely for years at a time. A recent Census Bureau study found that women’s childbearing years and career-building years coincide from 25-35, resulting in a drop in pay relative to their male counterparts for women who have children during those years.

Women are more likely to reduce their work hours, take time off, turn down a promotion or quit their jobs to care for family. Even in families in which both parents work full time, women spend almost double the time on housework and child care. And when women work fewer hours, they are paid disproportionately less and become less likely to get raises or promotions.

‘This shows that the birth of a child is really when the gender earnings gap really grows,’ said Danielle H. Sandler, a senior economist at the Census Bureau and an author of the paper.

When women leave the workforce, especially for moms, their experience is better than it is for men, and they aren’t willing to jump back in without concessions to their home life.

But the experience of not working is also considerably more positive for women than men, the poll shows, which means that women are often not desperate to return to work. Women are more likely to say that not working has improved their romantic relationships, while men are more likely to say those relationships have suffered. Women who aren’t working spend more time exercising than they once did. Men spend less.

Still, many women also seem interested in working again — under the right conditions. And near the top of the list of those requirements is the flexibility to avoid upending their family life. Many fewer women than men said they would be willing to take a job with trade-offs that might significantly affect their lives: moving to a different city, commuting more than an hour each way, or working nontraditional hours. Notably, women with children at home account for many of the differences. Women without children often have attitudes about unemployment that are more similar to men’s, the poll shows.

Certainly, some of these differences could be caused by discrimination or social expectations. Perhaps women don’t work as many dangerous jobs because the jobs are male-dominated old boys’ clubs where women have had trouble breaking in. Maybe women opt for lower pay and more flexibility because societal expectations impose on them “almost double the time [spent] on housework and child care,” as the New York Times notes. Do women drop out of the workforce because the United States doesn’t offer generous taxpayer-funded child care or the mandates of Europe?

Sure, some of that is at play, but fundamentally, this is about trade-offs. Women are far more willing to give up higher pay for more comfortable work requirements. They often want to be around for their young children and are therefore more willing to give up career opportunities and time in the workforce to do so.

In countries where government subsidies attempt to even everything out, women’s choices and the trade-offs still rear their heads. In Europe, for instance: “The same policies that enable women to work in large numbers can also hold them back from reaching senior-level jobs. They become stuck in part-time work or fall behind during long leaves. Women are less likely to work in the United States, according to Ms. Blau’s research, but when they do, they tend to be more successful.”

In Denmark, where “new parents [get] an entire year of paid leave after the birth of a child” and “the government offers public nursery care for children under 3 at the equivalent of $737 a month,” the wage gap is the same as in the United States. As in the U.S. Census Bureau study, childbearing is where the salary trajectory changes for women, and the reasons are similar:

Much of Kleven’s paper is designed to untangle what exactly happens after women have children that leads to this wage gap. He finds that women start to gravitate toward different jobs after the birth of a child, ones with fewer hours and lower wages. Ten years after childbirth, women have a 10 percentage point higher probability of public sector employment than men. These are jobs that typically offer ‘flexible working hours, leave days when having sick children, and a favorable view on long parental leaves.

Men, however, see their careers go on largely unchanged, with dads and non-parents having roughly equal earnings over the next decades.’

Economics is the study of choice. You can’t credibly examine wage gaps without examining the choices of women, many of them designed to give up pay for other benefits, and made with open eyes and their own best interests at heart. Changes in hiring practices and attitudes about flexibility could change some of that in the future, but women’s choices will always matter and they should be respected, not ignored. Or, at least that’s what the feminists used to tell me.