Is Now the Right Time To Talk About Raising the Minimum Wage? (hint, the answer is no)

In a pretty nonsensical Op-Ed today, Professor Paul Osterman of the MIT Business School, wrote that many of the jobs created in Texas were low wage and what we need is higher quality jobs that pay more. By titling the piece, "Yes, We Need Jobs, But What Kind?",  he seems to be saying that we just don't want certain kinds of jobs.  He goes on for much of the piece talking about how it sucks to be poor (duh!):

To understand the impact of low wages, in the Valley and elsewhere, we interviewed a wide range of people, including two directors of public health clinics, three priests, a school principal and four focus groups of residents. Everyone described a life of constantly trying to scrape by. One month they might pay for the phone, another, for utilities. Everyone knew how long each company would carry unpaid bills before cutting service. People spoke not only of their fear of an unexpected crisis — an illness, a broken car — but also of the challenge of paying for basic needs like school supplies. Many used the phrase "one paycheck away from homelessness."

Versus the people who have no jobs who I guess are technically zero paychecks away from homelessness. The esteemed professor then goes on to prove that he is locked in an ivory tower and has no idea about what is going on outside the world of academia.  He starts talking about raising minimum wages to levels called "living wages".  He claims they don't have many negatives:

We have solid evidence that when employees are paid better and given more opportunities within a company, the gains outweigh the costs. For example, after a living wage ordinance took effect for employees at the San Francisco International Airport, in 1999, turnover fell and productivity rose.

I love how he answers a question that nobody is asking.  Because with high unemployment nobody really cares if employees leave.  Note he makes no mention about the number of jobs created versus the number that would have been created without the ordinance, which is really the important question with regards to living wages, not whether people are less likely to leave a higher paying job.  Also, given the fact this study was published in March 2003, and SF unemployment went from 3.1% in 1999 to 7% in March 2003, the fact that fewer people willingly left their jobs is particularly uninteresting.

In fact, nowhere in the entire 900 word op-ed does he provide any reassuring statistics related to living wage ordinances and job growth.  All he says is "research shows this will not hurt job growth."  What research is he talking about?  The thoroughly debunked NJ-PA fast food industry study that used faulty methodology that lead to completely inaccurate results?  My guess is that there probably aren't any convincing large scale studies that will show living wages actually don't hurt employment.  I'm sure there can be some cherry picked highly localized pieces of research like the above SFO employment study but I can't imagine it can be true on a big scale.  How can it?  If you have $1 million to spend on employee salaries and the average salary was just forced up by an ordinance, how can you not let some people go, or at least alter your future hiring plans?

Just take a look at what happened in SF, aka the Progressive Capital of the World, which has the highest minimum wage in the country, just under $10 per hour.  From January 2000 to July 2011, the number of jobs in San Francisco actually fell by 7.4%!  In Houston, TX, on the other hand, the number of jobs in the city itself grew by 10.6%.  Living wages are good for those that already have jobs, but what about all of those people who aren't in the labor force yet?  What about them? 

The esteemed professor wants the question to be, would you rather have a high paying job or a low paying job, which is clearly not the right question.  It is, would you rather have a job or not have a job?  I think you don't need focus groups to answer that question.