Millionaires and the Minimum Wage


Cynicism is a human-borne disease that is caused by a variety of factors, one of which includes paying close attention to the actions of politicians in crafting laws.

If you were up and awake at 1:41 a.m. Saturday morning and watching the roll call vote in the House of Representatives on C-SPAN, your cynicism levels would no doubt have leaped alarmingly.

In that vote, the House attached a double-edged amendment to an overhaul of the nation’s pension policies. On the one hand, it included a $2.10-an-hour raise in the minimum wage, to be phased in over the next three years – a popular idea with the public, according to recent polls. On the other hand, it slashed the rate on estate taxes for multi-millionaires – an even more popular idea if your net worth exceeds $5 million.

The minimum wage boost was supported overwhelmingly by Democrats; the tax relief for millionaires was a Republican countermove. The combined package passed the House 230-180, mainly through the support of the Republican majority.

Its fate in the Senate is now in doubt, but the House vote gives political cover to Republicans who can now argue they supported an increase in the minimum wage.

Hypocrisy, of course, has always been a factor in Washington politics, but usually it takes a less obvious form. A tax break for millionaires is sanitized politically by tossing in a sop to the middle class. The message in this bill is that lower-income Americans can’t hope for any help at all from the current Congress unless a helping hand is extended at the same time to the very wealthiest Americans.

I’ve long thought, from years of tracking campaign contributions, that members of Congress – whatever their party – share a special affinity for millionaires. Without them their reelection coffers would be considerably less solvent.

Let’s face it, nobody earning minimum wage is going to make a $1,000 contribution to anybody’s reelection fund. And those big-ticket contributions are the meat and potatoes of virtually every reelection campaign on Capitol Hill.

We know from past studies that reelection funds are collected through three main sources: PACs (about 20% of the money in the Senate and 40% in the House); large individual contributions (more than half the money in the Senate, and just under half in the House); and small contributions, which typically add up to only about 10% of the average House campaign and around 15% in the Senate.

All of which means that if you’re a member of Congress seeking money for the next election, you’re going to spend a lot more time rubbing shoulders with millionaires than with constituents earning the minimum wage. Not all those $1,000 contributions come from millionaires, of course, but I’d wager that not a single one comes from people making $5.15 an hour.

Whether the bill passed early Saturday morning will survive the Senate remains to be seen. (Don’t bet on it.) But whatever happens, the middle-of-the-night exercise has accomplished one thing: providing an appalling image of the American dollarocracy at work.