LYNN NEARY, HOST:
Ron Unz has both liberals and conservatives scratching their heads. He earned his credentials as a far-right Republican with his successful campaign to end bilingual education in California in 1998. He cemented that reputation as the publisher of the American Conservative magazine. Now, the Silicon Valley multimillionaire is sponsoring a ballot initiative to raise the state minimum wage to $12 - up from eight, a proposal that you'd really expect to hear from the other end of the political spectrum. We reached out to Ron Unz to discuss his minimum wage campaign, and I asked him to explain why he was pushing for a pay hike.
RON UNZ: Well, I think there are very strong liberal and conservative reasons for raising the minimum wage. Right now, $250 billion a year in social welfare spending goes to workers who can't survive on their paychecks. What we're talking about is a massive system of hidden government subsidies for these low-wage employers where they can shift the costs of the workforce over to the taxpayer. I think businesses should stand on their own two feet and have to pay their workers instead of forcing the taxpayers to make up the difference.
NEARY: Now, do you think that people who, let's say, they have two kids, maybe they're living in a city like Los Angeles, do you think that they won't still need some government help?
UNZ: Well, certainly in some cases in expensive cities still need some help but much less help. On a minimum wage of $12 an hour, a couple - two full-time minimum wage workers - would earn $50,000 a year. That certainly doesn't make you affluent, it doesn't make you rich, but you can get by reasonably well on $50,000 a year.
NEARY: And you don't think jobs will leave the state?
UNZ: Some jobs, but probably a lot fewer than most people think. There have actually been a lot of recent studies in the last five or 10 years that have turned around the economic sentiment on this issue. In most cases, in nearly all cases, the jobs we're talking about for these workers are in the low-wage service sector. They're non-tradable. They're not subject to foreign competition. They can't be outsourced. Those jobs are exactly the sort of jobs where the employers would simply pass along the extra costs to the consumer. They'd raise prices and keep their workers at a much higher paycheck. Furthermore, the price rises we're talking about are very much smaller than most people would realize. Wal-Mart is America's largest low-wage employer. Three hundred thousand Wal-Mart workers average about $9 an hour. All Wal-Mart would have to do to cover a $12 minimum wage is raise their prices by 1.1 percent one time. The average Wal-Mart shopper would pay only an extra $12.50 per year. People wouldn't even notice the price hike.
NEARY: Well, if the goal is to lift low-wage workers above the poverty level, is $12 an hour really enough?
UNZ: The figures I've seen are that probably for every extra $3 or 4 they earn in their paycheck, they'll lose probably about a dollar worth of government assistance. In this case, a $12 minimum wage, if it were nationwide, would boost the incomes of 40 percent of all the wage earners in the United States. The average rise for a full-time worker would be $5,000 a year, which is a life-changing amount of money. If their wages went up by $5,000 but they lost, say, $1,000 or $1,500 worth of government benefits, they'd still be far better off. And also they'd be keeping the money themselves, the money they earned. And I think most workers would rather earn their living rather than get it in government handouts or welfare programs.
NEARY: Ron Unz is chairman of the Higher Wages Alliance. Thanks so much for joining us.
UNZ: Great to be here.
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