The Murkiness of the Minimum Wage Debate

Last weekend, the Democrats running for the presidential nomination gathered in Des Moines, Iowa for the second Democratic debate of this presidential election cycle. The field was notably smaller, with Lincoln Chafee and Jim Webb dropping out between the first and the second debate. The debate was fairly uneventful, with most analysts agreeing that the debate will do very little to change the direction of the contest. However, there was at least one important exchange during the debate on the topic of raising the minimum wage. Although all three candidates agreed that it needed to go up, Bernie Sanders and Martin O’Malley want to raise it to $15 an hour, while Hillary Clinton only wants to raise it to $12 an hour. When asked about the potential consequences of a $15 minimum wage, Sanders responded:

Real inflation accounted for wages has declined precipitously over the years. So I believe that in fact this country needs to move toward a living wage. … So I believe that over the next few years, not tomorrow, that over the next few years we have got to move the minimum wage to a living wage $15.00 bucks an hour. And I apologize to nobody.

O’Malley then chimed in with support for a $15 minimum wage and then said that while he was governor of Marlyand, the state raised the minimum wage:

$10.10 was all I could get the state to do by the time I left in my last year. But two of our counties actually went to $12.80. And their county executives if they were here tonight would also tell you that it works.

Clinton defended her proposal for a raise to $12 an hour, explaining:

That is why I support a $12.00 national federal minimum wage. That is what the Democrats in the Senate have put forward as a proposal. But I do believe that is a minimum. And places like Seattle, like Los Angeles, like New York City, they can go higher. It’s what happened in– Governor O’Malley’s state. There was a minimum wage at the state level. And some places went higher. I think that is the smartest way to be able to move forward because if you go to $12.00 it would be the highest historical average we’ve ever had.

It makes sense that all Democratic candidates want to stress their plans to raise the federal minimum wage, which is currently at $7.25 an hour. Roughly 70% of Americans support raising the federal minimum wage, and just over 90% of Democrats are in favor of a minimum wage hike. The problem is, no one is really sure how much.

The motivation behind the moderator’s question in the debate was a recent New York Times opinion piece by Alan Krueger, a Princeton University economist and the former chairman of President Obama’s Council of Economic Advisors, which suggested that a minimum wage greater than $12 would set the country in uncharted territory and could be potentially runious for the economy. However, Alan Krueger’s view is far from the consensus among economists. The Initiative on Global Markets at the Chicago Booth School of Business surveyed 42 prominent economists and found that most economists remain uncertain about the effect of a $15 minimum wage while the rest are pretty evenly split. In spite of the uncertainty of economists in how to raise the minimum wage, the Democratic candidates all came out on Saturday staunch in their policy positions. Only Hillary Clinton acknowledged some level of nuance by admitting that different states have different levels and that may be the best way to do things.

Part of the reason that the minimum wage debate is so complex is because the cost of living is drastically different across the country. Take, for example, my home county of DuPage County, Ill. According to The Living Wage Calculator, a project of Amy Glasmeier of MIT, the living wage1 for a single person is $11.66 an hour. Travel just an hour and a half southwest to La Salle County, Ill. and the living wage is just $9.84 an hour. And yet in both counties, the Illinois minimum wage is $8.25 an hour.

The anecdotal evidence is one thing, but this trend is prevalent across the entire country. In that vein, I have created a series of maps2 to demonstrate the variance in wages across the country. First, we can take a look at the current minimum wage in each state.3
Minimum Wage in Every State
We can compare this to a map of the living wage in every state:
Living Wage in Every County
What is immediately apparent, just by comparing the two maps (which are on the same color scale), is that in most counties, the minimum wage is not nearly as high as the living wage. The exception seems to be some parts of eastern Washington, where the minimum wage is the highest in the country and the living wage is not too high. To get a fuller picture, we can take the difference between the living wage minus the minimum wage to get the following map:
Living Minus Minimum Wage in Every County
There is clearly a lot of variation from county to county in this difference. The county where the living wage most exceeds the minimum wage is Honolulu County, Haiwaii, where the minimum wage is $7.25 and the living wage is $14.66, a difference of $7.41. On the other hand, 21 of the 3143 counties have a minimum wage greater than the living wage, with the largest difference in Pend Oreille County, Washington, where the minimum wage of $9.32 is $0.65 greater than the $8.67 living wage. The mean difference was $2.45, which is fairly clear from the prevalence of green counties in the map.

The point is not to offer any concrete policy prescriptions for how to deal with the minimum wage, although this map shows that by and large, it needs to be raised in order to keep up with the living wage, but rather to suggest that this issue is a lot more nuanced than most politicians are willing to admit. While I can hardly blame Sanders, Clinton or O’Malley for really wanting to get into the messiness of this policy debate when they are only granted 90 seconds to speak, it is important to recognize the complexity of the issue. An additional layer of complexity, which I did not even address in this post, but which is included in Glasmeier’s data, is that the living wage also depends on your marital status and whether or not you have children. The data used in my maps is only for a single person without children, but the minimum wage is the same across the board regardless of if that is the case.

Although last weekend’s debate was fairly clear cut as $12 versus $15, in order to have a productive conversation about this issue on the national level, more nuance and murkiness must enter the conversation. It is hard to say that, across the board, $15 is a living wage or that $12 is a living wage, when really it depends on where you are. Although little will likely change about the rhetoric of the Democratic candidates, we can at least hope that when actual policy is hammered out, lawmakers take advantage of the data available, such as Glasmeier’s, in order to make more informed policy.

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Just How Important is the House Freedom Caucus?

The House Freedom Caucus has been huge in the news recently. They brought down Speaker John Boehner, ended Rep. Kevin McCarthy’s bid to replace Boehner, and their blessing was the final step for Rep. Paul Ryan to go ahead with his bid for the speaker’s gavel. But given all of the press surrounding the HFC, just how influential are they?

Because we are statistics junkies here at Electoral Statistics, we of course are going to turn to numbers to answer this question. For now, we are going to put aside their influence in the Speaker’s race (which was visibly large) and consider whether they are all that influential legislatively. When talking about the House, most activity goes on behind closed doors, so the public is only able to understand a certain amount of the influence of any one legislator. However, one of the primary points of influence for the HFC is their supposed position as obstructionists. For this, we can look at roll call data1 to find when certain legislators voted against their party leaders. Because we are looking at the HFC, we will focus on Republican leaders (although I may apply this same technique later to Democrats). “The leadership” is a broad, nebulous term, but in this case we looked at the two main GOP House leaders: Majority Leader Kevin McCarthy and Majority Whip Steven Scalise.2 It turns out that this year, Scalise and McCarthy voted together all but one time on the final passage of bills. That one time, Scalise did not vote, so it can be ignored.3 Because of the similarity in the voting records of Scalise and McCarthy, we choose McCarthy’s voting record to be the main point of reference to represent the GOP House Leadership. The most simplistic analysis is to look at how often legislators vote against McCarthy.4 By this metric, the top five dissenters are:

Legislator (District) Percent of Dissenting Votes
Jones (NC 3) 34%
Amash (MI 3) 25%
Gibson (NY 19) 25%
Massie (KY 4) 21%
Dold (IL 10) 21%

Amash (bolded) is the only member of the HFC in the top five. However, many of these votes are simple procedural ones or votes on amendments. The more powerful vote a representative has is on the final passage of bills, so we can narrow it down to just these votes and find the following:

Legislator (District) Percent of Dissenting Votes on Bills
Jones (NC 3) 47%
Amash (MI 3) 34%
Massie (KY 4) 28%
Sanford (SC 1) 22%
Gibson (NY 19) 21%

By this more specific metric, only Amash and Sanford (again bolded) are HFC members. So clearly, HFC members are not the most contrarian Republicans, but they still occupy some of the top seats. In total, the average HFC member votes against the leadership 10% of the time, while the average Republican only does so 7% of the time. The difference becomes starker when again restricting to just votes on the final passage of bills, where the average Republican dissented only 5% of the time while the average HFC member did so 10% of the time. Furthermore, of all the votes cast against the leadership, 20% came from HFC members, who only make up 14% of the Republican House Caucus.5 Again restricting to votes only on the final passage of a bill, HFC members cast 33% of votes against the leadership, which is double the portion of the House GOP members in the HFC. Clearly, although HFC members are not much more contrarian than your average Republican in the House when looking at all votes, they are significantly more willing to vote against the leadership on a bill.

However, this simplistic analysis ignores a key fact: not all votes are created equal. For example, votes taken on the big budget deal that just passed the House is of significantly more importance than, say HR 623 which established a “Social Media Working Group” in the Department of Homeland Security. As such, a dissenting vote on the budget was probably a bigger deal than HR 623, but such judgements of the importance of bills (or amendments or any other business that the House votes on) is rather subjective. Moreover, the House has had about 580 roll call votes to date, and just under 80 were on the final passage of bills. Indexing the importance of these bills individually is therefore not very feasible. However, we are not just interested in how important a singular vote is, but specifically how important a dissenting vote is. For example, if a bill passes by just one vote, every dissenting vote is a lot more meaningful than a bill that passes with 217 votes to spare, meaning that the dissenting vote was the only dissenter. From this idea, we have created something called the Dissent Importance Index (DII). This is a simple, linear model that maps how important any singular dissenting vote is. If for a particular vote, a representative votes on the same side as the leadership, their DII for that vote is a 0. If they vote against the leadership, their DII falls between 0 and 100, where 100 means that that representative was the deciding vote and 0 meaning that the only impact of that dissenter was to rob the leadership from a unanimous vote. We treat the relationship between the margin of victory6 and DII as affine.7 In this way, we assign each legislator a DII for each vote, which we can then sum or average over all votes in order to draw some conclusions about how often representatives vote against leadership in important votes.

The HFC member has a DII average of 7.06 across all votes, while the average Republican has a DII average of 5.67 across all votes. Restricting to just bills, HFC members average a DII average of 6.56 across votes on the final passage of a bill, compared to 3.04 for all Republicans. Although when considering all votes, HFC members only have a slightly higher DII average than an average Republican representative, their record of voting against the leadership remains much more steady on the final passage of bills than the average Republican. We can also give each representative a DII sum, meaning their DII from each vote added together. While this is not entirely informative in the abstract, we can use it to find how much of the total DII of the House GOP the HFC makes up. This is still a bit abstract, but it gives us insight into how impact the HFC is as a whole body. On all votes, the HFC makes up 18% of the total GOP DII, which is not much more than the 14% of the House Republican Caucus that makes up the HFC. However, on just the final passage of bills, the HFC makes up 32% of total GOP DII, double its membership portion. Using the DII confirms the story told by just the raw percentages, which is that the HFC is definitely slightly more willing to vote against the leadership than the average Republican, but when it comes to the final passage of bills, they are much more likely to vote against the leadership.

In the end, the House Freedom Caucus is clearly a body which is hostile to the leadership of the House GOP Caucus. At a macro level, they appear to be no more hostile than any other Republican group.  However their influence clearly stems from their willingness to disobey the leadership on key votes concerning the final passage of bills. While many Republicans are willing to diverge from the leadership on procedural votes or amendments, when it comes to the final vote for a bill, they tend to fall in line. The HFC does not follow this same pattern, and in their willingness to compromise on the passage of bills, they find their power.

Edit (November 13, 2015): You can now check out our data and the code we used to scrape the data on our GitHub.

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