[caption id=”attachment_145199″ align=”aligncenter” width=”1024″] Republican presidential candidate Carly Fiorina talks with four-year old Will Metz, of Mitchellville, Iowa, left, and his seven-year old sister Selma during a visit to the Iowa State Fair, Monday, Aug. 17, 2015, in Des Moines, Iowa. (AP Photo/Charlie Neibergall)
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During a question-and-answer session at the Iowa State Fair on Monday, Republican presidential candidate hopeful Carly Fiorina stated her opposition to the minimum wage due to its limiting effect on opportunity.
To account for state variations in the cost of living, Fiorina opposes a federal minimum wage, favoring state decisions for the price floor for wages.
“We have to remember that a lot of minimum-wage jobs are jobs where people start … So we need to be honest about the consequences of raising a minimum wage too high. One of the consequences is that young people who are trapped in poor neighborhoods will have less opportunities to learn skills and move forward,” Fiorina said.
The argument has some intuitive sense, and many conservatives raise the “opportunity” argument instead of the “job losses” argument.
Thomas Sowell, a senior fellow at the Hoover Institution, mentions “the last year when the black unemployment rate was lower than the white unemployment rate was 1930, the last year before there was a federal minimum-wage law,” to boost the “opportunity” argument.
The argument is tricky to show empirically, as the National Journal notes.
The nature of empirical economic research is to demonstrate seen effects, such as how many workers have higher wages after a minimum-wage increase occurs, or how many workers lost their jobs after a minimum-wage increase. However, measuring opportunity is more difficult because it is unseen. The young workers who would have gotten a job, but now cannot because of higher mandatory wages, exist, but they are a “dark number,” a statistic that can’t be measured.
If Fiorina can persuade people with the “opportunity” argument, she could add nuance to the minimum-wage debate, and possibly save some jobs, though it’d be impossible to measure.
Some increases in the minimum wage, such as the recent increase for hotel workers in Los Angeles, might signal a harmful effect. Economist Adam Ozimek cautiously suggests 1,000 jobs might have been lost.
The wishy-washiness of the empirical evidence, and its varying effects across cities, states, and regions, could give Fiorina’s argument an upper hand. If voters punt on deciphering the evidence, a convincing story will win out.
