Category Archives: Minimum Wage

Leggett Backs Away from Junk Science Study

By Adam Pagnucco.

County Executive Ike Leggett, who commissioned a county-financed study on the impact of a minimum wage increase blasted by the Economic Policy Institute as “absurd junk science,” is backing away from its results.  Leggett asked in a letter to the study’s authors that they review the methodology and findings in their report.  He also revealed that his administration had “received word from your firm that there might be a problem with the methodology and calculation of fiscal impact and resulting job impacts.  You have indicated that the job losses might be less than what is expressed in the report.”

Let’s recall that this very same firm prepared a study recommending retention of MoCo’s liquor monopoly – a study that did not include review of your author’s proposal to replace its revenue.  If the minimum wage study is so flawed that the Executive is retreating from it, what does that say about this same company’s work on the liquor monopoly?

It’s worth noting that the Executive’s letter to the study’s authors comes at the exact same time that the County Council is sending him an exhaustive list of questions about the study’s methodology.  The council is set to review the study in public next month.  One line of questioning examines the minimum wage bill’s impact on county labor costs, which could range into the tens of millions of dollars.  That issue is sure to become more prominent in time.

We reproduce the Executive’s letter below.

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Conservatives Spread MoCo Junk Science Far and Wide

By Adam Pagnucco.

Discussion of Montgomery County’s minimum wage study, branded “absurd junk science” by the Economic Policy Institute (EPI), is spreading like wildfire through online conservative outlets.  It is now fortifying right-wing arguments against minimum wage hikes all over the United States.

The study, exposed by EPI, Seventh State and economists interviewed by Bethesda Magazine as possessing numerous crippling methodological problems, has nevertheless been embraced by right-wing online media.  That includes articles by Fox News, Breitbart, Townhall.com, Young Conservatives, the New Right News, the Heritage Foundation’s Daily Signal, Glenn Beck’s The Blaze, Ben Shapiro’s The Daily Wire, L. Brent Bozell’s CNSNews, the Job Creators Network’s Information Station, the Washington Free Beacon, a Washington Examiner columnist, a Forbes Magazine columnist, the Competitive Enterprise Institute and Economic Collapse News. Because the conservative echo chamber cross-pollinates its content, it’s probably just a matter of time before the study makes its way to Rush Limbaugh, Sean Hannity and other big-time right-wing hosts.

It’s worth noting what a few of these outlets are saying.

Forbes Magazine columnist Tim Worstall:

The study’s findings are pretty bleak:

The county’s current minimum wage is $11.50. The study concluded that an $11 hourly wage was the local market rate needed to attract and retain employees. It found that increasing the wage would cost the county an additional $10 million per year to increase county employee wages.

The report found there are about 88,000 “low-wage jobs” in the county, in which employees make $1,250 or less per month that could be affected by the minimum-wage increase.

Economic Collapse News:

Study after study, report after report, common sense continually highlight a crucial fact: a $15 minimum wage results in lost jobs, lower pay, less work for workers and jobs that are not being created.

The Daily Wire:

In all, raising the minimum wage to $15 would result in the loss of $396.5 million of income in the county by 2022.  And even Democrats — or smart ones — know what a $15 minimum wage would do to low-income workers.

Washington Examiner Columnist Ron Meyer:

A county considering raising the minimum wage to $15 per hour commissioned a study on the impacts of the hike, and the results are staggering. It should serve as a wake-up call to other localities considering large increases…

For those who care about empowering low-income Americans and lifting workers out of poverty, the mounting evidence and data show raising the minimum wage to $15 isn’t compassionate, just, or charitable. It kills opportunity and creates more poverty, especially for young Americans trying to build their skill sets and make ends meet.

Those still doing #FightFor15 have important questions to answer: Why are you ignoring evidence that hurts low-wage workers? If you don’t care that it hurts low-wage workers, what are your real motives? Aren’t there other anti-poverty policy measures you can fight for that would be more productive?

None of these right-wing publications question the study’s methodology.  They embrace it uncritically because it agrees with their worldview.  And as other governments consider their minimum wage policies, the study will be used to discourage increases.  State Senator Rich Madaleno (D-18), lead sponsor of a $15 state minimum wage bill last year, debunked the study on WBAL radio but it will surely come up again.

We do not criticize County Executive Ike Leggett for being concerned about the employment effects of the minimum wage bill.  At some point, an excessively high minimum wage will lead to employment losses and business shutdowns that outweigh the positive benefits for workers who keep their jobs.  At present, no one knows what level of minimum wage that is.  But the MoCo junk science study, which cost the county $149,600, does not help us determine that wage level one bit.  What it does is give aid and comfort to right-wing ideologues who are willing to use any “information,” however flawed, to push their agenda.

Is that a worthy purpose for your tax dollars?

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MoCo’s Dubious Minimum Wage Survey

By Adam Pagnucco.

The Executive Branch has released its long-awaited study of the impact of MoCo’s $15 minimum wage bill and it is taking fire.  The primary objection from bill supporters is that much of the study, including the assumptions for its economic modeling, is based on an unscientific, self-selected sample of business owners who were asked to predict what they would do if the minimum wage were raised.  A senior economic analyst with the Economic Policy Institute labeled it “absurd junk science” and wrote:

The closest analogy I can think of would be if the FDA was considering approval of a new drug and instead of reviewing any studies or trials, they instead simply asked the drug company “what percentage of patients do you think this drug will harm versus help?”

Your author agrees with these criticisms.  Want to know why?  Because your author was asked to fill out the minimum wage survey!

On May 12, the county sent me the email below asking for participation in the minimum wage survey.  Note that the email says, “All responses will be anonymous, and the project team will be unable to link responses to specific businesses. Your responses will be used to inform our analysis around wage compression, job loss, and other relevant issues.”

Now, I am self-employed, but I do not own an incorporated business or employ other people.  Just out of curiosity, I clicked on the Survey Monkey link right after receiving the email.  Yes, the link worked and the survey was ready to accept responses.  If I had filled it out (and I didn’t!), by its own admission above, the survey administrator would have had no way to filter out my responses or flag them as fraudulent.

Lord knows who else got the email and exactly who filled out the survey!

Your author does not express an opinion on the policy merits of the $15 minimum wage bill.  That’s a topic for a future post.  But the minimum wage business survey is a different matter.  It was obviously subject to self-selection bias and even potential manipulation.  The fact that it was administered in flagrant violation of all known scientific surveying techniques disqualifies it from being used as a tool to evaluate public policy.

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Leventhal Lurches Left on the Minimum Wage

As he prepares to run for County Executive, Montgomery County Councilmember George Leventhal (D-At Large) is taking a no-one-to-my-left approach on the minimum wage. He has heartily embraced the legislation by fellow Councilmember Marc Elrich (D-At Large) to raise the county’s minimum wage to $15/hour.

The legislation, recently vetoed by County Executive Ike Leggett after passing the Council by 5-4, would have indexed the minimum wage. Consistent with his position, Leventhal came out strongly on Facebook against a proposal by Del. Dereck Davis (D-Prince George’s) to limit the abilities of local jurisdictions to legislate on the minimum wage, and pointed out that the County’s current minimum wage law is not indexed for inflation:

His campaign consultant, Karen Murphy, then posted the first comment applauding Leventhal and attacking both Davis and Councilmember Roger Berliner (D-1), who voted against the legislation to increase the wage:

Berliner is a likely rival to Leventhal for the open county executive post in 2018.

At this point, my fellow blogger Adam Pagnucco, who formerly worked for the Council, pointed out that Leventhal had voted for an amendment sponsored by Berliner to strip indexing from the county’s minimum wage in 2013:

(Here is the link to the meeting in the screenshot of Adam’s post.)

George agreed that Adam is correct but then noted that Adam has done work for Berliner as a campaign consultant. Irrelevant but fair enough. On the other hand, it was only at this point that it was revealed that Karen Murphy, who earlier posted the SHAME on Berliner comment, works for Leventhal.

Can we look forward to Karen Murphy revealing her employer and pay in future political posts? (Note: Adam says he was paid less but the debate over the amount is not important here.)

George later explained his evolution on the issue:

The proposed new minimum wage of $15.00 is a 30 percent increase over $11.50. Councilmembers who voted no expressed concerns that a minimum wage set above a certain point could crimp the county’s economy. Councilmember Leventhal argued this point passionately during the 2013 debate. So this new lack of caution is a real shift.

The politics of this debate are interesting. The county’s Democratic Party continues to shift left, so taking a vocal, hardline pro-minimum wage stance may be politically advantageous. This should benefit Elrich, yet another candidate for county executive, and Leventhal would hope he too would reap the benefits, or at least mend relations with unions who didn’t endorse him 2014.

In theory, this leaves business oriented Democrats open for Berliner, or another potential candidate like David Trone. However, Leventhal has had strong developer and business support in the past and would likely try to win their support again, if only as clearly preferable to Elrich from their point of view.

(Note: I am not a consultant to any campaign or a supporter of anyone for county executive at this time. I have actively supported both Elrich and Berliner in some of their past Council races.)

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