Romney’s minimum wage proposal sparks conservative backlash — Steve Forbes: ‘He’s still very defensive about his own wealth’

Mitt Romney's position on the minimum wage has some on the right sounding the alarm about his candidacy--and it could expose a dangerous fault line between Romney and some of the Republican Party's most reliable backers.

Romney said last week that he supports regular increases in the minimum wage to keep pace with inflation, a position he took as a candidate for president in 2008. Six years before that, as a candidate for Massachusetts governor, Romney supported linking automatic increases in the state's minimum wage to inflation. "I haven't changed my thoughts on that," he told reporters.

Indexing the minimum wage to inflation is a goal of many labor-backed groups and liberal Democrats, who say it would help millions of working people. In recent years, Republicans, backed by their allies in the business community, have opposed such efforts, arguing that raising the minimum wage would reduce employment. Some on the right have come out against the very concept of a minimum wage.

Romney's comments have caused concern among conservatives inside and outside the party.

"It goes to show he's still very defensive about his own wealth," Steve Forbes, the publishing magnate who made his own bids for the presidency in 1996 and 2000, told Yahoo News. "All it does is give the base another reason to be unenthusiastic about him."

Forbes, a free-market advocate who advised Rick Perry's campaign before the Texas governor quit the race last month, said the minimum wage lowers employment among young people who need to build job skills. "So in the name of showing his compassion, he hurts the opportunities for those who need it the most," Forbes said of Romney.

Dick Armey, the former Republican House Majority Leader who leads the influential small-government advocacy group FreedomWorks, told Yahoo News that Romney was "wrong" on the issue. "The fact of the matter is, when you look at the economic truths surrounding the minimum wage, higher mandated wages ultimately lead to job loss," Armey said.

And Newt Gingrich, Romney's leading rival for the nomination, said Sunday on Meet the Press that "virtually every economist in the country believes that [indexing the minimum wage to inflation] further makes it difficult for young people to get a job."

The federal minimum wage, first enacted in 1938, was last raised in 2007, when Democrats controlled Congress. In July 2009, it reached $7.25 an hour, although some states have set their own minimum wages higher.

Some experts argue that raising the wage costs jobs, but others disagree. A 1993 study by the economists Alan Krueger--now President Obama's top economic adviser--and David Card found no such effect.

The Club for Growth, an influential conservative group that advocates lowering taxes and shrinking government, was harsher than Gingrich. "Indexing the minimum wage would be an absolute job killer," Chris Chocola, the group's president, said in a statement. "Mitt Romney's proposal is anti-growth and would harm our economy. It's disappointing to hear that the leading candidate for the Republican nomination believes that the government can set the price of labor better than the free market."

Jim DeMint, the Republican senator from South Carolina and a Tea Party favorite, also offered a thumbs-down.

"Senator DeMint opposes the minimum wage because it hurts the poor and destroys desperately needed jobs," DeMint's spokesman, Wesley Denton, told Yahoo News. "Wage mandates prevent people from getting jobs and the skills they need to climb the economic ladder."

The Detroit News--a right-leaning paper in a swing state where Romney might hope to mount a challenge in November (he was born in Detroit and his father was once Michigan's governor)--said in an editorial Sunday that it was "once again left questioning Romney's free-market chops" and called the idea of raising the minimum wage "a conservative's nightmare."

And an article by the writer Andrew McCarthy on the website of National Review, a leading conservative opinion journal, accused Romney of "class warfare" and "pandering."

Speaker of the House John Boehner has opposed an increase in the past, but declined to weigh in on Romney's position.

Boehner "has not been commenting on the individual candidates' specific proposals," Michael Steel, a spokesman for Boehner, told Yahoo News. A spokesman for Mitch McConnell, the Republican Senate leader, did not respond to a request for comment.

One of Romney's rivals for the nomination, Ron Paul, said at a Republican debate in September that abolishing the minimum wage would be "very beneficial."

And Michele Bachmann, who quit the presidential race last month, has said that scrapping the minimum wage could "potentially virtually wipe out unemployment completely, because we would be able to offer jobs at whatever level."

Both the U.S. Chamber of Commerce, which in 2010 spent big in support of Republican candidates, and the National Federation of Independent Businesses, a key small-business advocate, oppose a minimum-wage increase.

"A higher federal minimum wage restricts the ability of small businesses to create jobs--that's not good for job seekers, business owners, or the communities they both enrich," NFIB spokeswoman Cynthia Magnuson told Yahoo News in a statement.

Romney's position could undermine his efforts to generate enthusiasm among conservatives this fall. But it could also give him some appeal among blue-collar workers hit hard by the sluggish economy. When he ran unsuccessfully for the 2008 Republican nomination, he spun the idea as a conservative one.

"I do like the idea of getting the political debate out and I like the idea of not having the huge jumps as we do now," he told a crowd at an event in South Carolina in 2007.

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