Friday, May 18, 2012

The Two Faces of Dean Skelos: Dean Skelos and the Minimum Wage




A few days back, Senate Majority Leader Dean Skelos had the following to say about a possible increase in New York State's minimum wage:

“I’m just telling you that we will not pass the speaker’s bill,” Skelos told reporters -- without getting more specific -- when asked whether he was ruling out any increase in the wage.

Skelos, though, said the GOP-controlled Senate’s focus was on creating jobs and he rejected Silver’s argument that an increase in the minimum wage was a “moral issue.”

“Our focus in terms of moral imperative is about creating jobs,” said Skelos, who's argued raising the minimum wage would cost the state jobs.

“To me the moral imperative is to have as many people working as possible,” Skelos added.

And thus we have the 2012 face of Dean Skelos: The minimum wage, in Skelos' estimation, costs jobs. Dean Skelos' 2012 face is that of a disciple of conservative Economists.

That the minimum wage (not just a particular instance of the wage's being raised, but the fact of the minimum wage itself) destroys jobs is pretty much an article of faith for conservative Economists and the conservative politicians whose policies they inform. You don't have to take my word for it, you can take that of Alan Greenspan, former Chairman of the Federal Reserve. Note the following exchange between Greenspan and then-Representative, now-Senator Bernie Sanders, and note how close Greenspasn's remarks are to Skelos'.

Greenspan: ... With respect to the minimum wage, the reason I object to the minimum wage is I think it destroys jobs. And I think the evidence on that, in my judgment, is overwhelming. Consequently, I am not in favor of cutting anybody's earnings or preventing them from rising, but I am against them losing their jobs because of artificial government intervention, which is essentially what the minimum wage is. So it is not an issue of whether, in fact, I'm for or against people getting more money. I am strongly in favor of real incomes rising, and, indeed, that's the central focus of where I would come out.

Sanders: Are you for abolishing the minimum wage?

Greenspan: I would say that if I had my choice, the answer is, of course.

Sanders: You would abolish the minimum wage?

Greenspan: Well, I would, yes. Because if what I say is accurate, then the minimum wage does no good to the level of ...

Sanders: And you would allow employers to pay workers today $2 an hour if the circumstances provided that?

Greenspan: The problem is that they will not be paying $2 an hour because they won't be able to get people.

Anyone who's worked, or tried to, in a difficult economy knows just how far off the mark Greenspan was, but that's neither here nor there. What's important for now is that Skelos' statements appear to echo those of Greenspan and economists of similar ilk.

It should first be noted that the evidence that the minimum wage costs jobs is, at best, questionable.

A great controversy in academic circles was caused by book Myth and Measurement,by Economists David Card and Alan Krueger.  In that book, the authors challenged their profession's faith regarding the minimum wage and very nearly found themselves excommunicated from their profession for it. (The really funny thing is that they didn't actually question the underlying economic logic. As I recall they agreed that a minimum wage law could cost jobs, but not at the paltry minimum wage levels typically found in the United States. The underlying economic logic of a minimum wage costing jobs, they argued, could kick in at much higher minimum wage levels.)

The controversy over that book, waged in the pages of Economists' professional journals, found the authors' fellow Economists contort themselves into econometric pretzels of increasingly complex shapes in order to prove their faith that the minimum wage always costs jobs.

But if Leader Skelos agrees with Greenspan, as his language suggests he does, then why not champion dumping the minimum wage in its entirety? Even more telling, if Leader Skelos feels this way about the minimum wage, why did he vote for New York State's 2004 minimum wage increase (NYS Laws of 2004, Chapter 747, override of Veto 10 of 2004). And why was his name proudly listed as a co-sponsor on the Senate's version of that bill, listed alphabetically between Senators Robach and Spano?

To vote for legislation is one thing; to co-sponsor it is quite another. The former can suggest mere agreement. The latter suggests true belief.

And thus we have the second face of Dean Skelos, the 2004 face, that of minimum wage supporter. I assume that Leader Skelos would not have co-sponsored the minimum wage increase in 2004 if he really thought it would cost jobs.

It may well be the case that Leader Skelos thinks 2012 is a different situation than 2004, and/or it may well be the case that Leader Skelos thinks something about Silver's bill in particular will cost jobs (perhaps the linking of the minimum wage to inflation?), whereas other potential increases won't cost jobs. But nothing in Skelos' words suggests either, at least so far. His language seems to be aimed at the very idea of a minimum wage. His actions in 2004, however, undermine that.

It could also be that Leader Skelos has just changed his mind. If so that's regretful, because he was correct in 2004, and is wrong now.

What will happen, I suspect, is that, either next year or the year after, an increase will be approved, but it won't be tied to the rate of inflation. And that's fine with me, at least for now, and judging by polls it'd also be fine with many other New Yorkers.

It pleases me that Leader Skelos left the door open to allowing a minimum wage increase, is letting is 2004 face show through. It's the right thing to do from a policy perspective, from a moral perspective, and at the end of the day even from a political perspective too. And I'm curious to see if Leader Skelos will vote for a minimum wage increase, or even co-sponsor it again, when it finally comes up, rather than merely allow it to the floor. Or perhaps he will allow it to come to the floor, then vote against it? Many outcomes are possible, depending upon which face Leader Skelos shows.

And, most of all, I'm curious to have a glimpse into what Leader Skelos really thinks about the minimum wage. I am not opposed to politicians going against their beliefs when practicality requires it. But I am opposed to politicians seeming curiously ambivalent about their own records.

On this issue, at least, Dean Skelos appears to have two faces. If he disagrees, I'd be curious to hear his reasoning.

Either way, I hope he shows his 2004 face when it really counts.

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