Long After Pushing for Hikes, CNN Finds Downside to Minimum Wage Increase

CNN’s Christine Romans finally found the small business perspective on July 24, the day the minimum wage rose to $7.25.

Romans interviewed an owner of a New Jersey Shop Rite grocery story who was “very concerned” that the increase would lead to rising prices in his business and his suppliers’ businesses.

“All these companies all have thousands upon thousands of minimum-wage earners. Obviously their costs increase, it passes on to me and then passes on to the consumer,” Shop Rite owner Rafael Cuellar explained.

Romans also interviewed economist Peter Morici who warned that the increase would “cost lots of low-skilled jobs, simply employers won’t be able to hire more people. Some will get laid off.”

In a second “Minding Your Business” segment the same morning, Romans summarized the perspective of small businesses:

“Mostly, you know when we talk to the small business owners. Small business owners keep saying, I mean, this is the last time  – the last thing we need on our minds right now: raising the minimum wage. Thirty states are gonna raise this, 2.2 million people are gonna get a higher minimum wage. I mean these are workers who really need the extra dime, 15 cents an hour over the past few years. But the question is, is this gonna force some small business owners to have to lay people off, because they’re gonna have to raise their wages.”

But “American Morning” co-host Kiran Chetry acted as if the negative impact of the minimum wage increase was new information saying, “A lot’s changed since then (2007 when the increase was legislated), especially the economy. Now there’s a lot of financial minds warning this wage hike could lead to actually more job cuts, having the opposite effect unfortunately.”

In fact, experts warned that an increase in the minimum wage would lead to job loss even before Congress legislated the 3-year, 3-tiered increase in 2007.

Marc Freedman, director of labor law policy at the U.S. Chamber of Commerce told USA Today in July 2007 “the higher federal minimum wage could mean fewer hours for employees, fewer pay increases for other employees, benefits reductions, job losses and waning job creation.”

But at that time, CNN reporters including Romans promoted the wage increase. Romans pitted businesses against workers during a “Lou Dobbs Tonight” “War on the Middle Class” segment about the minimum wage.

Romans declared, “The business community has long opposed higher minimum wages, preferring instead low taxes and less regulation.”

The only defender of business opposition to minimum wage increases during that segment was The Heritage Foundation’s Bill Beach who said, “When you increase the minimum wage you increase the cost of doing business … that’s kinda tough.”

Romans immediately countered Beach’s claim saying, “Voters overwhelmingly disagreed.”

CNN Senior Business Correspondent Ali Velshi was a staunch defender of the wage increase, saying on Oct. 25, 2008 that “our minimum wage is, it’s insulting in this country.” Velshi also said on Jan. 2, 2007 that “it’s simply not fair that there has been a federal minimum wage of $5.15 an hour.”

When the wage increase took effect July 24, 2007, Velshi called it “unmitigated good news.”