Carly Fiorina: Raising the Minimum Wage Will Lead to ‘Less Opportunity’

It’s a claim that plays to Republican primary voters’ worst fears.

Republican presidential candidate Carly Fiorina looks at the Butter Cow while touring the Iowa State Fair on August 17, 2015 in Des Moines, Iowa.
Justin Sullivan/Getty Images
Aug. 17, 2015, 12:32 p.m.

Carly Fiorina didn’t want to give a speech on Monday when she took the stage at the Des Moines Register soapbox at the Iowa State Fair. Instead, she proceeded quickly to the question-and-answer portion, fielding questions on everything from abortion (“Planned Parenthood must be defunded”) to U.S. energy production (“a single nation acting alone will make no difference at all” on climate change).

The first question Fiorina fielded was about the minimum wage, and how she thinks raising the wage would affect the U.S. economy. Fiorina, a former CEO of Hewlett-Packard, answered as she had before, but included an interesting argument against raising the wage.

“First, I believe that minimum wage should be a state decision, not a federal decision. Why? Because it makes no sense to say that the minimum wage in New York City is the same as the minimum wage in Mason City, Iowa,” Fiorina said.

“Secondly, we have to remember that a lot of minimum-wage jobs are jobs where people start, and in those jobs they learn skills to move forward. So we need to be honest about the consequences of raising a minimum wage too high. One of the consequences is that young people who are trapped in poor neighborhoods will have less opportunities to learn skills and move forward.”

The idea that you can draw a line between higher minimum wage and fewer opportunities in poor neighborhoods is an alluring hypothesis for Republican primary voters, and one that is very hard to bear out in empirical research. Economists can’t even agree whether raising the wage would lead to job stagnation or not, much less the social capital affected by it.

Real job growth, Fiorina continued, is not created by the federal government mandating higher wages, but by allowing smaller businesses to thrive. Forcing smaller businesses to pay higher wages, Fiorina argued, would price them out of the market.

“We are crushing them under the weight, the complexity, the cost, the power of a federal government that frankly advantages the big, the powerful, the wealthy and the well-connected, and is crushing the small and the powerless,” she said. “Every time we destroy a small business or we destroy a community bank, we are destroying the opportunity for someone to get that first job, learn skills, and get a better job.”

So, is raising the minimum wage actually a job killer? It’s hard to say conclusively, and has led to some infighting among U.S. economists. A 2007 literature review from the Federal Reserve Board of Governors concluded that minimum-wage increases reduced employment. More recently, a study found little correlation between metro areas raising their minimum wages and their job-growth rate, suggesting that raising the minimum wage does not impact employment.

While raising the federal minimum wage to $15 an hour — an idea Sen. Bernie Sanders and former Maryland Gov. Martin O’Malley have backed — would definitely increase individual employee income, that could come at the cost of jobs. A 2014 report from the Congressional Budget Office projected that raising the minimum wage from $7.25 to $10.10 an hour would lead to a reduction in 500,000 jobs nationally, but roughly 16.5 million workers would see their weekly earnings increase.

With not enough research to definitively say which side is right, voters will have to decide which side they trust more. And on Monday in Iowa, Fiorina made a good sales pitch that she’s the person voters should trust.

What We're Following See More »
34 STATES MUST SIGN ON
Scott Walker to Lead Effort for Constitutional Convention
13 minutes ago
THE LATEST

"A national group says its campaign to convene an unprecedented U.S. constitutional convention to balance the federal budget has a new leader: former Republican Gov. Scott Walker. The Center for State-led National Debt Solutions on Monday announced Walker will serve as its national honorary chairman. It marks one of the first efforts by Walker to re-enter the political fray since his November election loss to Gov. Tony Evers. In 2017, Wisconsin became the 28th state to request an Article V convention — so named for the article of the U.S. Constitution that sanctions the process." Thirty-four states must sign on to trigger a convention.

Source:
WOULD ALSO LIMIT MONTHLY PAYMENTS
Administration Aims to Cap Student Borrowing
15 minutes ago
THE LATEST

"The Trump administration on Monday proposed placing limits on federal student borrowing programs as part of a series of initiatives to amend the Higher Education Act. ... A number of the proposals seek to change the borrowing and loan repayment process. A senior administration official said the White House wants to institute a limit on loans through the PLUS program, which graduate students and parents of undergraduates use to help pay for college or trade school."

The official did not say what the loan cap would be, but that it could vary by program rather than by institution.

The administration is also calling for Congress to simplify loan repayment programs, in part by condensing five income-driven repayment plans into one plan that would cap monthly payments at 12.5 percent of the borrower's discretionary income.

Source:
HE PLANNED TO LEAVE MID-MARCH
Rosenstein Not Leaving DOJ Yet
1 hours ago
THE LATEST
"HE HAS STAYED OUT OF A LOT OF PEOPLE'S WAY"
Mulvaney Likely to Become Trump's Permanent Chief of Staff
1 hours ago
THE DETAILS

The White House plans to drop the word 'acting' from Mick Mulvaney’s title, officially making him President Donald Trump’s third chief of staff, according to four current and former senior administration officials...'He has stayed out of a lot of people’s way,' said one senior administration official. No one is saying he is killing it but staying out of people’s way has helped.'"

Source:
MANAFORT STEERED HIM WORK IN UKRAINE
Prosecutors Weighing Whether to Charge Greg Craig
18 hours ago
THE LATEST

A long-running federal investigation into former Obama White House counsel Gregory Craig "is reaching a critical stage, presenting the Justice Department with a decision about whether to charge a prominent Democrat as part of a more aggressive crackdown on illegal foreign lobbying." Federal prosecutors in New York have transferred the case to Washington. ... The investigation centers on whether Mr. Craig should have disclosed work he did in 2012 — while he was a partner at Skadden, Arps, Slate, Meagher & Flom — on behalf of the Russia-aligned government of Viktor F. Yanukovych, then the president of Ukraine. The work was steered to Mr. Craig by Paul Manafort."

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login