Presidential Candidate Kamala Harris’s Minimum Wage And Education Policies Will Reduce Economic Opportunities

Tuesday, January 29, 2019
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US senator Kamala Harris, who announced her candidacy for president last week, immediately moves to the top of the Democratic party’s list for the 2020 election. Her background—a UC Berkeley law school graduate, a former California attorney general, the author of a children’s book, and a prominent US senator who serves on the Judiciary Committee—appeals widely to those in the party.

The fact that she is biracial (her mother is Indian, her father is Jamaican) makes it very difficult for the Democratic party to find a candidate with a stronger “diversity background.” And she will benefit enormously from the California primary being moved up from June to March in 2020.

Among those who have declared their candidacy, I don’t see anyone coming close to Senator Harris. Among those who have not, there is former vice president Joe Biden. But Biden must cross the increasingly wide chasm that now confronts any candidate within the Democratic party who has relatively moderate policy positions.

Harris’s economic positions dovetail with a Democratic party that is moving rapidly to the political left.  As a US senator, Harris’s voting record on labor, minimum wage, taxes, health care, housing, the environment, and other issues has been evaluated as being nearly 100 percent politically progressive.

Her campaign slogan is “For the People,” but her economic positions will harm many of those whom she wants to help. One policy position is the minimum wage, in which Senator Harris supports increasing the federal minimum wage to $15 per hour.

Many who support a substantially higher minimum wage argue that it is needed to help workers earn a decent living. But this argument is misleading. Minimum-wage workers are primarily very young people who live in households well above the poverty line. Moreover, 80 percent of these individuals work part time, and they will earn far more as they complete their education and gain additional experience and skills. In contrast, less than 0.4 percent of workers over the age of 25 are full-time workers earning the minimum wage. And most households at the poverty level receive considerable government welfare support. Consumption expenditure survey data show that less than 3 percent of US households are living in poverty, based on inflation-adjusted 1980 poverty levels, down from 16 percent in the early 1970s.

Raising the minimum wage to $15 will make the least-skilled workers unemployable. This will affect not only young people, but anyone who has not yet acquired the necessary skills to support a $15 wage. Not surprisingly, unions strongly support higher minimum wages, and not just because it raises the price of non-union labor. Living-wage legislation across the country sometimes includes exemptions for union workers. This fact is rarely reported within the media.  

There is a mistaken view within the Democratic party that a higher minimum wage will not depress economic opportunities. Former President Obama stated, “There is no solid evidence that a higher minimum wage costs jobs.” This is wrong. David Neumark, a University of California economist who has been analyzing minimum-wage effects for over 20 years, notes: “Economists have written scores of papers on the topic dating back 100 years, and the vast majority of these studies point to job losses for the least-skilled.”

Some studies arguing that minimum wages do not depress employment have been shown by Neumark and other economists to be significantly flawed, yet year after year, these very same studies are cited by those who want to raise the minimum wage.

Recent studies of the minimum wage have focused on distinguishing between the immediate effects of an increased wage and the longer-run effects when employers have had time to take the minimum wage into consideration when designing their long-range business strategy plans. Once businesses have the time to make these adjustments, the job-destroying effect of the minimum wage becomes much larger than its apparent initial impact. How much bigger? More than 100 times bigger.

There are much better ways to promote higher employment and earnings for the least-skilled workers. The earned income tax credit, which is largely due to Milton Friedman, and enterprise zones, championed by former congressman Jack Kemp, are policies that perform exactly opposite from the minimum wage. The EITC and enterprise zones incentivize employers to hire the least-skilled workers while the minimum wage encourages employers to replace workers with automation or move those jobs to countries where workers are cheaper. And the EITC leads to more low-income families earning their way out of poverty than the minimum wage does.

In the past, both major parties strongly agreed that the EITC was an excellent policy tool to help low-wage workers, and it was a key policy component in both of Bill Clinton’s presidential terms. But today, expanding the EITC appears to be much less popular among Democratic candidates than increasing the minimum wage, even though the EITC is much better at helping those who are struggling the most.

From the perspective of economic opportunity, one of the biggest economic policy mistakes of many in the Democratic party is the continued support of a broken US K–12 education system that fails many children, particularly those from low-income families. Compared to students of other economically developed countries, US student test scores are below average, placing 30th out of 35 countries in math achievement, and 19th out of 35 in science in the most recent international comparison.

In California, this education failure is considerably deeper because the state’s learning outcomes are among the worst in the United States. A few years ago, a group of California schoolchildren brought a lawsuit against the state (Vergara vs. California) that argued that many schools across the state, particularly those in poor neighborhoods, had so many ineffective teachers that those students were being deprived of a decent education. The lawsuit, which was based on the constitutional principle of equal protection, argued that various statutes, including teacher tenure and seniority-based layoff policies, protected the jobs of ineffective teachers, which in turn led to deficient learning outcomes.

Kamala Harris, who was the state’s attorney general at that time, joined teachers’ unions in fighting the lawsuit, claiming that educators were being used as scapegoats for poor learning outcomes. But even the state’s expert witnesses agreed that there were perhaps thousands of ineffective teachers in California schools, and that they were depressing learning outcomes.

Judge Rolf Treu ruled in favor of the schoolchildren. In his opinion, he wrote that “the effect of grossly ineffective teachers on students is compelling. Indeed, it shocks the conscience.”  Attorney general Kamala Harris filed an appeal on the day after Judge Treu’s ruling. The state’s appellate court ruled against the schoolchildren in a 3-2 vote, arguing that the lawsuit was not a legitimate equal-protection case, despite the fact that ineffective teachers were concentrated in schools in the poorest neighborhoods.  

Harris, along with teachers’ unions, also endorsed Tony Thurmond in last year’s race for California school superintendent. Thurmond’s opposition was Democratic candidate Marshall Tuck, who has a strong record of improving school performance in some of the worst schools in Los Angeles, and who promised an agenda of strong school reforms. Tuck was by far the candidate with the best chance for increasing state learning outcomes and improving schools in poor neighborhoods, but Tuck lost to Thurmond in last November’s election.

Many in the Democratic party, including presidential candidate Kamala Harris, support policies that will deprive some workers of the opportunity of working, and that deprive some children of a good education. This is a reflection of a Democratic party that seemingly condemns the principle that a free marketplace is the key to economic opportunity and success.