At a Q&A at the Iowa State Fair on Sunday, Republican presidential candidate Carly Fiorina staked out one of the more extreme positions on minimum wage articulated thus far in the 2016 race. “I believe that the minimum wage should be a state decision, not a federal decision,” she said, according to the National Journal.
“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,” she explained.
The cost of living is certainly higher in New York City than in Mason City. Median income in New York is about $52,000, compared to about $41,000 in Mason City. But the federal government set a minimum wage floor for the entire country through the Fair Labor Standards Act in 1938, and states and cities can go above that if they feel their own circumstances warrant it. And many have: the majority of states have now set their wages higher than the $7.25 floor and many more cities have done the same. Some cities are starting to go as far as the $15 minimum wage that’s been called for by fast food workers.
Even accounting for cost differences between living in New York and in Mason City, the current federal minimum wage still falls short in most places. It’s now impossible to afford rent anywhere in the country for people working a 40-hour minimum wage job. The cost of living in most places is far out of reach for households making the federal minimum wage.
And if the minimum wage were left entirely to the states, many more workers would fare much more poorly. Five have no minimum at all, while two states have set theirs lower than the federal floor.
Fiorina is not the first Republican to question the existence of the minimum wage, not just the need to increase it. One of her rivals, Jeb Bush, said in March, “I think state minimum wages are fine. The federal government shouldn’t be doing this,” although later said he doesn’t oppose the existing minimum wage. Republican senators and congressmen have also called for scrapping the wage floor entirely.
Fiorina also justified her opposition to a higher minimum wage by arguing that it will hurt young, poor workers. “We need to be honest about the consequences of raising a minimum wage too high,” she said. “One of the consequences is that young people who are trapped in poor neighborhoods will have less opportunities to learn skills and move forward.”
Critics of increasing the minimum wage often cite concerns that it will cost jobs, particularly for those in low-wage work. But there’s plenty of evidence to suggest that wouldn’t be the case. In a review of 64 studies on this topic, economists found that the impact on jobs of higher minimum wages was close to zero, with the most precise studies being those most likely to find no impact. An analysis of minimum wage increases at the state level over two decades found no evidence of an impact on job creation. Companies can avoid laying off workers by reaping the benefits of reduced turnover, higher prices, and greater economic growth that often comes with higher wages.