American Magazine November 2013

syllabus
expert
GOVERNMENT 326
History of the Conservative
Movement: 1945–Present
What are conservatives—Reagan,
Ryan, Cheney, and Cruz—trying
to conserve?
That’s the question Christopher
Malagisi, SPA/BA ’03, poses to
budding political scientists in his
popular course that examines
the philosophical and political
underpinnings of the conservative
movement, which rose to
prominence after World War II.
“It’s no mystery that most AU
students lean left,” says Malagisi,
president and founder of the Young
Conservatives Coalition. “I like to
play devil’s advocate,” leading to
lively debates around William F.
Buckley, Phyllis Schlafly, Russell
Kirk, and other conservative minds.
“It’s important to understand
all sides of the political argument.”
Next on
the agenda
GOVERNMENT 531
Watergate: A Constitutional Crisis
Longtime White House reporter
Don Fulsom, who penned a 2012
book about Nixon’s presidency,
brings to life a crucial chapter in
history for students born decades
after the scandal rocked D.C.
HISTORY 288
Oliver Stone’s America
Peter Kuznick’s course, which
explores Kennedy, the Vietnam
War, Watergate, and 9/11, raises
questions about artistic license
and the shaping of popular
historical consciousness.
3 MINUTES ON . . . The Minimum Wage
David Kautter
Managing director, Kogod Tax Center and
executive in residence, Department of Accounting
and Taxation, Kogod School of Business
The minimum wage was enacted
in 1938 as part of the Fair Labor
Standards Act. It
was 25 cents.
Congress tried to
enact one once before, but it was
ruled unconstitutional in the
early ’30s.
Its primary
purpose was
to prevent
employers from taking
advantage of employees.
Over time, other arguments
have been made, including
fairness. Some say
it’s not fair for people
who work hard
to not get paid at
least a “reasonable amount” of
money. Another argument is
redistribution:
essentially, if the employees don’t
get the money it will go to the
business owners in the form
of higher
profits.
A critical question
has always been whether by
increasing the federal minimum
wage, which must be done by
Congress, you raise the cost
of labor,
so that
employers
can afford less labor. Therefore
businesses just don’t hire as
many people because they can’t
make enough money at the
higher rate.
The idea of a living
wage—a higher minimum
wage instituted by states,
counties, or cities—emerged as a
major issue in the late
’90s. The highest at the moment
is in San Francisco. The issue
there is that the minimum wage
is not what
most would
consider a
living wage,
and so while it sets
a floor on what employers can
pay, it’s not enough to live on.
One of the challenges
with the debate in Washington,
D.C., has been that
it has focused on a
particular segment
of employers—like Walmart—as
opposed to all employers. The key
challenge for cities in particular is
that businesses can move out to
the suburbs,
where they can
keep the same
customers and pay less in wages.
In the District, I think the
weakness in the debate was that
they picked out a piece in the
market, so-called “big box
retailers.” If it’s good
policy, isn’t it good for everybody?
If you can’t afford a wage of that
magnitude in your city, then
you’re probably better off not
having a living wage policy.
It’s estimated that only about
50 percent of people earning
minimum wage are part of
families that
make less
than
$40,000
a year. The
other half are
teenagers or spouses, people
who have other earners in the
household making well above
the minimum wage.
When the minimum wage goes
up, who pays? It can
either be the owner of the
business through smaller profits,
or it can be added to
the cost of the
service or the good.
The other issue
with raising the wage is that
people earning minimum wage
tend to consume almost
every dollar they make.
What that’s going to do is create
more demand in the market. You
just hope that it doesn’t get so
active that it
doesn’t have an
adverse impact on
inflation.
It’s a fascinating
issue on which
there are generally not a lot of
crystal clear answers. It comes
down more to philosophy than
hard economics.
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