The $15 Minimum-Wage Debate Clarifies the Partisan Economic Divide

Republican “populists” are on the wrong side of this fight. Photo: J Scott Applewhite/AP/Shutterstock

For many left-wing pundits, America’s partisan divide in 2021 is defined by its lack of a strong material basis. After all, a voter’s income level tells you less about her political allegiances today than it has for most of our nation’s modern history. In 2020, some of the wealthiest Zip Codes in the United States backed the party of organized labor by a landslide margin, while some of the poorest broke overwhelmingly for the party of libertarian billionaires. The ties that bind blue America’s tech entrepreneurs to its nonwhite gig workers — or red America’s oil barons to its white rural poor — are those of culture, not economics. Democrats stand for a multiethnic conception of American identity, secularism, cosmopolitanism, racial justice, and gender equality; Republicans, for a normatively white and Christian America, the patriarchal family, and zero-sum nationalism. In geographic terms, these divisions cleave the nation less by region than by density: All across the country, navy-blue urban cores fade into baby-blue inner-ring suburbs, red-violet exurbs and deep-red countryside.

This “culture war trumps all” thesis elides many nuances. For one thing, the prominence of zero-sum nationalism in factory towns decimated by globalization surely cannot be attributed to culture alone. For another, a large segment of nonwhite Democrats espouse right-of-center views on immigration and gender, and thus, vote less on the basis of cultural attitudes than some combination of communal bonds, historical memory, and economic interest.

Nevertheless, if liberals’ culturalist account of America’s political divide has its flaws, the “populist” right’s efforts to cast the conflict between red and blue in strictly materialist terms — with Republicans representing the interests of blue-collar workers in the heartland, and Democrats of cosseted professionals in parasitic cities — is infinitely more strained.

Joel Kotkin serves up a version of this narrative in a recent essay titled “Economic Civil War.” In it, the conservative intellectual argues that America’s parties are divided less by race, ideology, or gender than by “two ways of making a living, one based in the incorporeal world of media and digital transactions, the other in the tangible world of making, growing, and using real things.” The “incorporeal” economy is concentrated in deep-blue urban centers, the “tangible” one, in the hardscrabble American heartland.

The speciousness of Kotkin’s argument is apparent by the end of his thesis statement: Do anti-Trump line cooks in the restaurants of Manhattan not earn their living by “making things”? Do pro-Biden nurses in Los Angeles perform “incorporeal” work when they tend to infirm human bodies? Kotkin conjures an urban economy in which “media” is a dominant employer, and care work is too marginal to warrant a mention, as though New York City were home to more talking heads than home health aides.

Kotkin proceeds to assert that the Biden administration’s early actions “have focused on policies that are more popular in Manhattan and Malibu than Midland,” such as “massive new transit investments” and “policies that force high-density housing and racial quotas on suburbs.” Kotkin writes:

[These policies] may please his base and the media, but are certain to arouse opposition throughout parts of the country where people work in factories, warehouses, farms, mines, and the energy sector, live in lower density neighborhoods, and value the notion of upward mobility for most Americans. 

The notion that federal investment in the New York subway system would “surely arouse opposition” from voters in non-urban areas is dubious but logically coherent. This is more than can be said of Kotkin’s remarks on housing issues. By “policies that force high-density housing” on suburbs, Kotkin means “repealing regulations that prevent developers from meeting consumer demand for affordable apartments.” His reference to racial quotas, meanwhile, refers to ramped up enforcement of the Fair Housing Act. It is difficult to comprehend how these issues could be said to pit the material interests of heartlanders who work in factories, warehouses, and mines against those of coastal urbanites. Why are factory workers “sure to oppose” expansions in the supply of housing that could lower their monthly rent payments, and/or efforts to curb residential discrimination? Is Kotkin unaware that factory workers are sometimes Black? The idea that inclusionary zoning is an issue that divides America along fault lines of regional economic interest is preposterous at every level. The affluent, coastal professionals whom Kotkin casts as foils for the GOP’s virtuous heartland proletarians very often share his fondness for de facto segregation (at least, if their local governments’ zoning policies are any guide).

Kotkin’s argument does get more plausible when he turns to the subject of climate policy. He posits a sharp economic tension between carbon-energy-producing regions (which are typically aligned with the GOP) and energy-consuming ones (which are typically aligned with the Democrats). And there is indeed a genuine tension between the immediate material interests of unionized coal and oil workers, and the long-term material interests of all human beings. Kotkin isn’t wrong to suggest that financially comfortable urban professionals have an easier time prioritizing the latter than do workers in regions where carbon energy is the only source of decent-paying, blue-collar employment. Nevertheless, the tension between fossil-fuel industry workers and environmentalists is reconcilable in principle. And the socialist left has more plausible answers than the Republican Party for how today’s coal miners can live in comfort tomorrow. Climate change does not cease to exist when we close our eyes; and neither do the market forces eroding coal employment.

All this said: I do think there are meaningful economic divisions between the major party coalitions — especially at the level of organized interest groups — and that these divisions do have a regional character. But to see where these fault lines really lie, one should pay less attention to reactionary academics’ grand theories of political sociology and more to Republican lawmakers’ arguments against the $15 minimum wage (which are poised to take on heightened salience now that the Senate parliamentarian has made it more difficult for Democrats to enact that policy on a party-line vote).

Earlier this week, Democratic congressman Ro Khanna spoke about his party’s push for a $15 federal wage floor in an interview with CNN. The network’s anchor agreed with Khanna that “large businesses like Amazon and McDonald’s” can afford to pay higher wages, but asked what his plan was for “small businesses, mom-and-pop businesses, who are just struggling to keep workers on the payroll right now?”

Khanna replied, “Well, they shouldn’t be doing it by paying people low wages. We don’t want low-wage businesses. I think most successful small businesses can pay a fair wage.”

The congressman went on to argue that we shouldn’t regard the existing wage structure of the U.S. economy as just or natural: Had American workers seen their own productivity gains reflected in their paystubs over the past four decades — as they did during the golden age of American capitalism — the minimum wage in the U.S. “would be up to $23.”

This argument is sound. Granted, during the past four decades of wage suppression, many enterprises may have built their business models around the presumption that labor would remain hyper-exploitable. And bringing workers’ wages into closer alignment with the value their efforts produce might threaten the solvency of some firms, including modest ones with sympathetic owners. But there are far more workers in the U.S. than small-business owners. Condemning a large swath of workers to economic precarity so that a much smaller strata can carry on mining profits from their powerlessness does not improve the American people’s general welfare. And this is especially true when one considers that increasing workers’ purchasing power may enable existing low-road small employers to offset higher labor costs with higher sales volumes. Notably, the Democrats’ proposed version of a $15 minimum wage is phased in gradually and would not take full effect until 2025, giving firms time to adjust to the new rules.

Nevertheless, the Republican National Committee swiftly advertised Khanna’s remarks as an expression of Democratic callousness for the little guy.

No Republican senators — not even those with populist pretensions — have endorsed the Democrats’ $15 minimum-wage proposal. This is despite the fact that the policy routinely commands supermajority support in opinion polls, and passed by an overwhelming margin in a ballot referendum in Florida last November.

Tom Cotton, who is less of a market fundamentalist than the median Senate Republican, has called for a $10 minimum wage that would be phased in over five years. This would guarantee that, by 2026, all American workers would enjoy the right to earn $1 dollar less an hour than all workers in Cotton’s own home state already make. Josh Hawley, perhaps the most heterodox of the Republican caucus, has endorsed a $15 minimum wage for large corporations but not for small ones. The vast majority of GOP lawmakers, meanwhile, have held all minimum-wage proposals at arm’s length.

The GOP’s eager defense of businesses that pay workers poorly — and its aversion to putting upward pressure on wages through a federal mandate — is difficult to reconcile with the notion that Republicans represent the interests of blue-collar workers in the heartland. After all, even if one makes the empirically baseless supposition that raising the minimum wage would cause large job losses, the GOP cannot plausibly claim to craft its economic agenda around the interests of the least employable segment of the workforce; the party’s own populists spend far more time championing the plight of “the American middle” than that of the working poor.

By contrast, the GOP’s response to the $15 minimum wage is quite consistent with the idea that it represents the interests of small-time capitalists with predatory business models.

One can put a populist spin on this allegiance by painting Democrats as the party of large corporations, and Republicans as that of “mom-and-pops.” Indeed, on the $15 minimum wage, Amazon sides with (most) Democrats, while the small-business lobby is aligned with the GOP. And this does reflect broader coalition dynamics. Since Democrats are the party of the union movement, they tend to derive their business support from firms that are (relatively) insensitive to increases in labor costs, which tend to be companies that are large, capital-intensive, and/or multinational; if you are a social-media company that relies on relatively little blue-collar labor, or a tech firm that maintains a white-collar headquarters in the U.S. but concentrates its manufacturing operations overseas, then suppressing working-class wages in the U.S. probably isn’t your top policy priority. Republicans, meanwhile, tend to dominate with firms that are highly sensitive to labor costs, which are often (though by no means exclusively) small businesses with tight profit margins.

Given that large multinational corporations tend to be headquartered in big cities — while small firms reliant on low wages are prevalent throughout the country — there is something to Kotkin’s argument that Republicans represent heartland interests while Democrats represent those of the urban elite. But this is a division among capitalists, not between middle-American proletarians and coastal professionals. And — as the debate over the $15 minimum wage makes clear — there is no unity of interest between the provincial business owners the GOP actually represents and the working people they claim to champion.

In the $15 Minimum-Wage Debate, GOP Populists Are for Bosses