Opinion

Why would a millionaire Republican demand a huge minimum-wage hike?

Conservative businessman Ron Unz's case for $12 an hour

January 21, 2014 10:30AM ET
Fast food workers and their supporters picket outside a Burger King restaurant in Los Angeles on August 29, 2013.
Robyn Beck/AFP/Getty Images

By the time California Gov. Jerry Brown signed a bill that will raise the state’s minimum wage to $10 an hour by 2016, a ballot measure to raise it to $12 was in the works. The ballot measure isn’t being driven by organized labor, the traditional champion of low-wage workers. Instead, the proposed raise has come from a staunch conservative, Silicon Valley millionaire Republican Ron Unz.

It is clear by now that Unz is not looking out for the best interests of those working at the bottom end of the wage scale. The millionaire has a history of promoting measures designed to bust unions and discriminate against immigrants. In 1998, for instance, Unz spent $1.2 million — over half of that from his own fortune — sponsoring and campaigning for a successful ballot measure to gut California’s bilingual-education program and punish teachers who refused to teach solely in English. He went on to back similar initiatives in Arizona and Massachusetts.

With his minimum-wage proposal, Unz is once again displaying ignoble motives. He believes a bill that raises wages will help drive out immigrant workers. Here’s how that works: Unz takes as gospel the traditional conservative belief that raising the minimum wage will destroy jobs. The low-paying jobs eliminated by the increase, he argues, will be disproportionately those held by immigrants. Unemployed and without private-sector job creation, Unz believes, they will then leave the country, prompting fewer of their compatriots to come over at all.

Beyond being mean-spirited, Unz’s anti-immigrant stance does not hold up to serious scrutiny. Studies by economists routinely dispel the notion that raising the minimum wage destroys jobs. Economists Jared Bernstein and John Schmitt convincingly showed that the 1996–97 national minimum wage increase did not result in substantial job losses. Likewise, researchers in 2007 took a look at San Francisco’s decision to increase the city’s minimum wage and index it to inflation and also found no negative influence on employment rates. David Card and Alan Krueger studied a New Jersey minimum-wage hike by surveying restaurants in that state and bordering eastern Pennsylvania before the increase and eight months later. Employment in New Jersey, even in this low-skill industry, was unaffected. Numerous other studies have looked at cities, counties and states (and the United Kingdom after it enacted its first minimum wage). All reached similar conclusions. 

Right answers, wrong reasons

Unz’s logic for raising wages to attack immigrant workers is specious. But other arguments he makes in favor of a minimum-wage hike are more compelling — and they’re worth taking seriously, from both a liberal and a conservative perspective.

Unz’s second reason for pushing the ballot is that businesses should not be able to rely on the government to subsidize their paying poverty-level wages — a classic conservative response. He argues that raising the wage floor would reduce the burden on large state and federal entitlement programs, which pay out billions of dollars to low-wage employees who aren’t getting by on full-time salaries. Here, at least, the evidence backs him up: A 2013 University of California at Berkeley study, which was sponsored in part by unions but is cited by conservatives too, found that the low wages paid by many employers force their workers to rely on roughly $7 billion in public support annually. 

One need not endorse all of Unz’s views to see that he is right in denouncing corporate welfare that supports businesses that don’t pay their employees enough to afford basic necessities.

“There are so many very-low-wage workers, and we pay for huge social-welfare programs for them,” Unz recently told The New York Times. “Doesn’t it make more sense for employers to pay their workers than the government?”

Polls have repeatedly shown that rank-and-file Republican support minimum-wage increases by a substantial majority, but Big Business’ near total influence over party elites — and over campaign finances — counteracts the preferences of ordinary voters. The Chamber of Commerce reflexively labels any such effort a job killer. The state of play could change, however, if other conservative power players and intellectuals begin to object to businesses’ reliance on taxpayers to subsidize low wages.

Unholy alliance

It remains to be seen how significant California’s minimum-wage hikes will be for the national debate and whether Unz is a gadfly without much support or a conservative trailblazer. His eccentric personality and history of go-it-alone initiatives suggest the latter, but the right-wing Daily Caller’s recent lengthy (and favorable) profile of him and his minimum-wage campaign — which cites other conservative supporters of the idea — indicates that his position isn’t entirely implausible.

Whether labor and other progressive groups will get behind Unz’s proposal is another question entirely. They have many reasons to be skeptical of such an alliance. His past politics and stated anti-immigrant biases have proved him clearly untrustworthy to those who support the rights of all workers, including those newly arrived in the country. Moreover, his proposal does not include indexing the minimum wage to inflation — something progressives advocate.

But there are arguments in favor of an alliance. What is politics if not a temporary aligning of interests among different groups? One need not endorse all of Unz’s views to see that he is right in denouncing corporate welfare that supports businesses that don’t pay their employees enough for them to afford health care and other necessities. Moreover, the fact that he is transparent about his motives makes the situation preferable to dealing with a political rival who possesses a hidden agenda. And since support from unions and community groups will likely be essential in passing a ballot measure, these groups have leverage to bargain for an improved proposal, like one that takes inflation into account.

Regardless of whether Unz’s ballot measure ultimately prevails, the fact that both liberals and conservatives in California agree on a central rationale for increasing the minimum wage presents politicians with an opportunity to advance the initiative in other places, including states where bipartisan support among policymakers and business leaders has been lacking. Supporters of the Democratic and Republican parties see the logic of a minimum-wage hike. It’s now time for the party leaders to catch up.

Amy B. Dean is a fellow of the Century Foundation and principal of ABD Ventures, LLC, a consulting firm that works to develop new and innovative strategies for organizations devoted to social change. Dean is co-author, with David Reynolds, of "A New New Deal: How Regional Activism Will Reshape the American Labor Movement."

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera America's editorial policy.

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