The Saxton Hearing

On Feb. 22, 1995, the congressional Joint Economic Committee held hearings on the minimum wage. What follows is a) the version in the original edition of Robert Reich's book Locked in the Cabinet and b) the version in the new edition. (Italics and ellipses are in the original.)

The Republican attack machine is gearing up, and I'm one of the targets. A "paranoid" is someone who thinks right-wing politicians are after him and who isn't known as a combative liberal cabinet member.

Today's hearing of the Joint Economic Committee: cameras, reporters, packed audience, a parade of witnesses claiming that raising the minimum wage will cause widespread loss of jobs. I begin to make the contrary case, when the Republican House chairman, James Saxton, a fleshy-faced former real-estate broker from New Jersey, interrupts:

"Where did you learn economics, Mr. Secretary?" He sits up straight and his eyes gleam. He's finally launched on the TV performance he's been waiting for. "Can you explain to those of us who are not versed in this new economic law how it is that an employer will hire more workers when the government forces him to pay more for them?"

"In fact, Congressman, there's evidence that when New Jersey raised its minimum wage, more jobs were created, because people entered the labor force who otherwise wouldn't have bothered ..."

"Evidence! Evidence!" Saxton jumps up and down in his chair like a schoolboy too eager to answer his teacher's question, and points to a large chart that's been placed on an easel, facing the cameras. "Look at this! This is what you're trying to prove! It can't be proven, because it's wrong!"

Along the bottom of the chart, starting on the left, are the numbers $4.25, $5.25, $6.25, and so on, continuing to $20.25. Along the side of the chart, starting from the bottom, are the numbers 10 million, 20 million, 30 million, and so on, up to 300 million. A bright red line rises from bottom left to upper right. Across the top of the chart, in bold letters: THE REICH CURVE.

Saxton looks toward the TV cameras. "I have a very difficult time understanding how an accepted law of economics doesn't apply! This man actually believes that the higher you raise the cost of labor, the more jobs you'll create! So why not raise the minimum wage to twenty dollars an hour? Look at all the new jobs that'll be created! Three hundred million! Why stop there? Why not raise it to a hundred dollars an hour? We'd find jobs for everyone in the world! Think of it! What a deal!"

The audience applauds. Saxton can't hide his delight.

There was a time not long ago when congressional hearings were designed to elicit information for members in order to help them draft legislation. Now they're attack ads.

Here is the quite different scene painted in the revised version. As indicated below, it is only excerpted here, because this version is considerably longer than its predecessor.

The Republican attack machine is gearing up, and I'm one of the targets. A "paranoid is someone who thinks right-wing politicians are after him" and who isn't known as a combative liberal cabinet member.

Today's hearing of the Joint Economic Committee: cameras, reporters, packed audience, a parade of witnesses claiming that raising the minimum wage will cause widespread loss of jobs.

The Republican House chairman of the committee, James Saxton, a fleshy-faced former real-estate broker from New Jersey, begins the proceedings. He says he wants to give the President's proposal a thorough airing. He then says he wonders how a president who is so smart can continually come up with so many destructive policies that threaten to harm the very people he aims to help. "First, it is pretty clear that some of the ideas put forth by this administration are never intended to become law, they are politically motivated, in my view, to score points with special interest constituencies such as labor unions and to embarrass the President's political opponents. The political motivation behind Clinton's minimum-wage proposals then are very clear to me." Saxton says that raising the minimum wage hurts poor people.

[Saxton is quoted in this vein for more than a page, while Reich interjects to himself: "When will I have a chance to answer these charges? You're not supposed to answer. They don't want you to answer."]

When, much later, I take my place at the witness table, Saxton grills me. "Can you explain to those of us who are not versed in this new concept of a law--that is, a law sometimes but not all the time--how this precisely works? Take me through an example at the level of job opportunities at the firm level, and explain how an employer has the ability to hire more workers when government forces him to pay more for that commodity, in this case, labor?"

I begin to answer when he interrupts. "I apologize, but I just have a very difficult time understanding how a generally accepted law of economics, or principle of economics, applies on some occasions and doesn't on others."

"Mr. Chairman, I was about to answer your question." I have no real chance of getting a hearing at this hearing.

"Well, I know you were going to give me an answer. I have no doubt about that." But he won't let me answer. He continues to talk about why employers won't pay employees a penny more than they're worth. "Let me harken back to an old-fashioned economic theory. ... Most economists I have talked to believe that the market sets wage rates on the basis of what a worker can produce."

We skirmish a bit longer, but it's futile. There was a time not long ago when congressional hearings were designed to elicit information for members in order to help them draft legislation. Now they're attack ads.