“My view is a federal minimum wage is a terrible idea ― terrible idea,” Larry Kudlow, director of the White House’s National Economic Council, said in an interview with Washington Post Live on Thursday.
The federal minimum wage has been on the books since the Great Depression to prevent employers from paying exploitative wages. It is currently set at $7.25 per hour, which translates into an annual salary of about $16,000 for a full-time worker. Polls show that voters on both sides of the aisle not only approve of the concept of a minimum wage, they wish Congress and the White House would raise it.
But the man leading the president’s economic team is no fan. Kudlow noted, correctly, that the cost of living varies widely from state to state, and that “Idaho is different than New York. Alabama is different than Nebraska.”
“That’s why the federal minimum wage doesn’t work for me,” he said.
But Kudlow did not endorse the idea of states or localities raising their own minimum wages as they see fit, in lieu of a federal mandate. As a supply-sider who doesn’t like regulations to interfere with the labor market, he did the opposite.
“I would argue against state and local [increases],” Kudlow said. “But that’s up to the states and localities.”
He said he applauded Amazon for voluntarily hiking its corporate wage floor to $15, but didn’t think employers should be required to pay anything higher than they currently are. “Particularly [with] small businesses, to force them to take a kind of payroll increase would be silly,” Kudlow said.
To be clear, the federal minimum prevails in any jurisdiction that does not mandate a higher one. As Congress has allowed the federal rate to remain stagnant for nearly a decade, more and more states have opted to raise their own wage floors instead ― including states dominated by Republican legislators. These days, 29 states have a higher wage floor than $7.25.
But if the federal minimum wage disappeared tomorrow, it would become legal for employers in seven states to pay less than that. In fact, five of those states ― Tennessee, Louisiana, Mississippi, Alabama and South Carolina ― have no state minimum wage at all, meaning employers could pay as little as the market would allow if not for federal law. (Wyoming and Georgia have state minimum wages but they are set at $5.15.)
Kudlow’s remarks serve as a reminder of how far apart the GOP elite is from regular voters on this particular issue. Sen. Lamar Alexander, the Tennessee Republican who heads the committee through which any federal minimum wage hike would go, is on the record saying the wage floor should be abolished.
Republican voters do not love the minimum wage quite as much as Democrats, but poll after poll shows it enjoys broad support across party lines. Minimum wage referendums have been passing, even in red states, by huge 2-1 margins.
Perhaps sensing the minimum wage’s popularity, Trump at least had the good sense to send characteristically mixed and confusing signals on where he stands on the issue. Back in 2016, he endorsed a higher federal minimum wage of at least $10, before contradicting himself and saying the matter should be left to the states.