Trump’s minimum wage two-step confuses business groups, advisers
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By Peter Schroeder - 07/28/16 01:33 PM EDT
PHILADELPHIA — Donald Trump’s new call to raise the minimum wage has outside experts and even his closest advisers scratching their heads.
This week, Trump said the government should raise the federal minimum wage by roughly one-third, calling for a legal standard of $10 per hour. The federal minimum is currently $7.25 per hour.
At the Democratic National Convention this week in Philadelphia, Trump was hammered repeatedly by Democratic speakers for suggesting the minimum wage should be dropped.
But now that Trump is recommending a specific wage hike, it’s the right’s turn to gripe.
Trump’s latest position puts him at odds with conservative thinkers and most of the business community, which argues that a government-mandated wage hike would just mean fewer workers as businesses cut costs to meet the new requirement.
Even Trump’s own economic brain trust could not explain how the GOP nominee decided $10 per hour should be the new standard.
“I saw the statement that he made on TV, but I haven’t had the chance to talk to him in the last couple weeks about this,” Stephen Moore, an economist at the Heritage Foundation who is advising the Trump campaign on economic issues, told The Hill on Wednesday.
“I don’t know exactly what he was endorsing. The $10 minimum wage, that was the first I’d heard of that.”
Earlier Wednesday, Trump was insistent that the federal minimum wage needed to be raised.
“The minimum wage has to go up,” he told reporters in Florida. “I would like to raise it to at least $10.”
Conservatives and business experts were quick to disagree, arguing that if the government orders wages to go up, the end result will be employers hiring fewer or even firing existing workers.
“The minimum wage is something that will deter hiring low-skilled, inexperienced people,” said Douglas Holtz-Eakin, head of the conservative American Action Forum and economic adviser to Sen. John McCain’s (R-Ariz.) 2008 presidential campaign.
“Raising the minimum wage doesn’t create any new income; it’s just redistribution.”
The business community, often aligned with the GOP on matters like the minimum wage, also criticized Trump’s new policy position.
“Business owners that are required to pay a higher hourly wage will have to find other ways to offset that expenses. Sometimes that results in fewer jobs,” said Jack Mozloom, spokesman for the National Federation of Independent Businesses. “We disagree with the proposal no matter who’s making it. There’s no doubt about it.”
While Trump’s position does run counter to conservative orthodoxy, it squares nicely with the general populist tone of his campaign. And breaking with the party on the minimum wage is certainly not the first time Trump has split from traditional conservative principles.
Furthermore, Trump has some company in the Republican Party on the matter. Mitt Romney, the party’s 2012 presidential nominee, has also expressed support for raising the minimum wage through his political career. He frequently wanted to see it tied to inflation rates.
But given Trump’s scattershot approach to the issue, many are still trying to figure out how firm his new $10 stance really is. At a GOP debate last fall, Trump responded to a question on the minimum wage by saying wages were already “too high.”
“Sometimes he says one thing, and sometimes he says another about this, so I’m not exactly sure where he’s at on this,” said Moore.
“The question of whether Mr. Trump wins and he then pursues that … we’ll deal with that if the time comes,” said Mozloom.
The reaction from the left has been extremely cautious optimism, given Trump’s tendency to not stick to many hard policy points.
“I haven’t heard a coherent position from Donald Trump on the minimum wage,” said David Cooper of the left-leaning Economic Policy Institute. “But it is nice to hear both sides recognize this.”
Beyond Trump, Cooper also rebutted the pro-business argument that a wage increase would cost jobs, saying studies have shown that, overall, low-wage workers come out in better shape after a minimum wage increase.
Meanwhile, Democrats took to the convention stage Wednesday aiming to undercut any notion that Trump has the interests of the working class at heart.
“He’s trying to tell us he cares about the middle class? Give me a break. That’s a bunch of malarkey,” Vice President Biden said to major applause.
Beyond setting a $10 federal minimum wage, Trump has also said states should set a wage floor that’s best for their circumstances — something many already do under current law.
“I think that states should really call the shot,” he said. “As an example, I live in New York. It's very expensive in New York. You can't buy a hot dog for the money you're talking about.”
Moore said the two had briefly touched on that particular topic at an earlier meeting but had yet to discuss the minimum wage in great detail.
“At one of the meetings, I just said I agreed with him on letting the states do it, and he kind of nodded and said, ‘Yeah,’ ” he said. “We haven’t had an extensive conservation on it. I’ve been meaning to talk to him about it and just haven’t had the opportunity to do it yet.”
Moore said he would be meeting soon with Trump to discuss policy and planned to further discuss his plans on what he would encourage as president.
Among the ideas Moore plans to push would include a lower minimum wage for teenage workers of $5 or $6 an hour. And he will encourage an extremely slow phase-in period for any minimum wage increase of five or six years to help businesses adjust.
“There are ways you can do the minimum wage that are less damaging to employers than others,” he said. “Let’s do it in the ways that do the least amount of harm.”
The Trump campaign did not respond to questions about whom he consulted in crafting his minimum wage policy. But even Trump himself seemed to acknowledge he was breaking with his party on this particular issue.
“You need to help people. I know it’s not very Republican to say,” he told Fox News’s Bill O’Reilly on Tuesday as he argued for a wage increase.
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