Moderate Democratic Think Tank Criticizes Party Support of Base Wage

The ink is barely dry on the letterhead, the staff operates out of temporary quarters and several key positions remain unfilled, but the Progressive Policy Institute already is raising eyebrows around town.

The institute, the newest entry into the crowded world of Washington think tanks, is an offspring of the Democratic Leadership Council, which was organized in 1985 by moderate and conservative Democratic elected officials who thought that the national Democratic Party had become too liberal.

The council, once seen as a threat by the Democratic National Committee and some of the party’s liberal hierarchy, has grown respectable over the years. But with that respectability has come self-restraint, which is why Al From, its executive director, long has wanted to spin off a think tank.

Avoiding Restraints

“In four years at the (Democratic Leadership Council), we found there were constraints on an elected officials’ organization,” said Will Marshall, president of the institute. “If you’re going to do provocative work, you have to go outside of the elected officials’ group. We wanted to insulate the politicians from our proposals and be independent of the constraints.”

Marshall, who was policy director of the council, said that the independently funded institute hopes to challenge not only conservative Republicans but liberal Democrats as well.

“The (Democratic) party has developed an allergy to new thinking,” Marshall said. “So we’ve yielded the initiative time after time to the right.”

Marshall said there is “a striking opportunity to wrest the intellectual initiative from the right,” adding that to do so “means taking on some of the interest groups . . . that have a stranglehold” on Democratic thinking.

Think Tanks Changing

The opening of the Progressive Policy Institute (Marshall toyed with but rejected the idea of calling it The Liberal Institute as a way of going straight to the question of what liberalism means today) occurs at a time of change among Democratic think tanks.

The Roosevelt Center, based in Chicago with an office in Washington, is closing because its chief financial benefactor has decided to stop contributing. The Center for National Policy, which has staked out a wide turf as a supplier of liberal policy analyses, is looking for a president to succeed Kirk O’Donnell, who will join the law firm of Akin Gump.

The Progressive Policy Institute wasted no time in lobbing a grenade into the center of the party. Its first paper calls the minimum wage “regressive” and “anachronistic” and suggests that Democrats are making a mistake by investing so much energy in a fight with President Bush over how to raise it.

“The political notion of making (the minimum wage) the centerpiece of the Democratic Party is kind of ludicrous,” said Elaine Kamarck, a veteran of the presidential campaigns of former Vice President Walter F. Mondale and former Arizona Gov. Bruce Babbitt and now a senior fellow at the institute. “It is not terribly relevant to men and women working in today’s economy.”

Base Wage Called Regressive

Robert J. Shapiro, vice president of the institute and author of the paper, said that the minimum wage “actually hurts poor people. It’s classically regressive.”

Marshall said the minimum-wage debate this spring “was emblematic of the problem. The Democratic Party is mired in old ideology, and the Republicans fail to come to grips with the working poor.”

“It’s such a clear example of the failure of both ideologies,” said Shapiro, who was an issues adviser in the presidential campaign of Massachusetts Gov. Michael S. Dukakis last year.

Not all Democrats agree. Geoff Garin, a Democratic pollster, said the Democrats have much to gain politically by supporting a substantial increase in the minimum wage. “If you’re against it, you’re seen as . . . unfair to working people,” he said. “The politics are that the Democrats are right and the Republicans are wrong.”

Policies Seen as Outdated

But Marshall said that that kind of analysis will prevent the Democrats from assembling a coalition large enough to win back the White House. “The minimum-wage controversy shows the futility of trying to broaden the base (of the party) with outdated policies,” he said. “The constituency for those policies no longer exists.”

In the paper, Shapiro argues that the minimum wage is “not an efficient way to reduce working poverty because most of those affected are not poor but middle class.” He said that only about one in five people working for the minimum wage lives in a poor family. “The demographics of the low-wage work force make it clear that minimum-wage laws now target not the working poor but those working for low wages--poor, middle-class or rich--and most are middle class,” he wrote.

He said that raising the minimum wage means that many working poor families will not benefit but that all of them will be forced to pay the cost because employers will pass on the higher wages to consumers in the form of higher prices.

Waited Until After Veto

In part because of the criticism the paper received when it was circulated privately for comment, the institute waited to release it until after Bush had vetoed a Democratic bill that would have increased the minimum wage gradually to $4.55 an hour.

The institute said it hoped to refocus the minimum-wage debate around the proposition that “no American family with a full-time worker should have to live in poverty,” and it recommended a compromise: boost the minimum wage to $4.25 an hour, as Bush has said he would accept, and help the working poor by increasing the earned income tax credit.

Although some other Democrats agree with that notion, they take issue with Shapiro’s arguments on the minimum wage.

“It sounds like a rationale for accepting Bush’s low-ball estimate . . . . To the degree that they’re letting Bush off the hook, that’s too bad,” said Roger Hickey, vice president of the Economic Policy Institute, a more liberal organization.

Agrees With Proposal

Robert Greenstein, who heads the Center on Budget and Policy Priorities, said that, with Bush’s veto, he agrees “exactly” with the compromise proposal but disagrees with Shapiro’s analysis. “I didn’t agree that the minimum wage is, on balance, regressive . . . and that we should let it fade into history,” he said.

Critics say also that Shapiro’s paper doesn’t confront the cost of increasing the earned income tax credit.

Marshall, who hopes to move the institute into permanent quarters soon, said that the group will concentrate on a wide variety of issues--from the power of incumbency to the role of citizenship in America, as well as traditional areas of economics, national security and domestic policy.

Institute Has Two Models

He said two conservative think tanks serve as models: the Heritage Foundation, which he said has been successful at marketing its ideas, and the Cato Institute, a smaller organization.

“On the scale of things, we’ll be more comparable to Cato than Heritage,” Marshall said, referring to the $1-million budget of the new institute.