Raise the Minimum Wage in Return for Approving Keystone XL? A Bad Deal

John Thune on 'Morning Joe' two weeks ago tossed around the possible idea (with other guests, errr......political poltroons) of having a "deal" in which a raise in the minimum wage (to $10.15 an hour) might be effected in return for the Dems allowing the Keystone XL pipeline to go through. (Let's forget for the moment the hike in the minimum wage DID technically pass at the last Senate vote by 54-46, but the Reepos phoned in a "filibuster" because the 60 majority wasn't attained.)

Thune, in his monologue, insisted that unless the economy is expanding we can't afford a minimum wage hike. The Keystone - by providing some 50,000 odd jobs- would presumably allow such expansion, which is why this compromise deal is being knocked around by the pols. Thune added that we can't simply raise the minimum wage by itself if the jobs aren't there and companies aren't experiencing demand for their goods.

What he doesn't get is that there is little demand because people aren't being paid the income that allows them to spend, given their other obligations (mortgages, rents, utilities, groceries etc). Even now, 6 years after the financial collapse, 14.5 percent of families are food-challenged. They are having difficulty paying for food in the richest nation on Earth..  Hence, merely approving the Keystone will not in itself be adequate to generate aggregate demand across the board to expand the economy.

Beyond all that, approval of the Keystone would add monumental extra costs to the health and environment: more cancers, more illnesses from polluted air- water. In addition, the added carbon deposition - especially from tar sands oil - would be too much to halt the worst effects of global warming,

Bill McKibben in an appearance on Chris Hayes’ UP in 2011, noted the major contributor to push us into this hothouse hell is none other than implementation of the Keystone XL pipeline because of the concentrated carbon it will unleash over years. To remind readers, this pipeline will deliver tar sands oil from Alberta, Canada to Gulf Coast refineries for export to an international market. The pipeline would have an initial capacity of 830,000 barrels per day and would leave a carbon footprint equivalent to building more than seven new coal-fired plants. By the time it reaches full capacity the enhanced carbon deposition will be nearly 3 gT/yr. In other words accelerating the timeline to reach the 550 gT maximum carbon load the planet can bear.

All of this discloses that no deal should be made and the minimum wage ought to be increased based on its own value of increasing aggregate demand.  It makes no sense to approve Keystone and get 50,000 more jobs but then impose recurring costs that effectively are fifty times higher than any economic benefits.

Despite misleading claims of “benefits” by TransCanada, the downsides of this ill-conceived project remain the same and include:

1)  Building a future of dirty energy,  hastening our pace toward an uninhabitable world. The fact is the Keystone XL is a massively detrimental dirty energy project that would open a major export artery for toxic tar sands oil across the U.S. for at least 50 years. In that interval, massive spills and contamination of our water supply (already threatened by fracking) will accelerate cancers and other endemic health problems.

2)  It’s an unnecessary risk. The U.S. itself doesn’t need this crap oil especially since we’ve reduced our oil consumption by nearly two billion barrels per day over the past five years. This stat will continue to improve with the growing number of electric and hybrid cars.

3) Water pollution: A planned Keystone XL pipeline would pass through Nebraska’s Sandhills region, endangering the Ogallala Aquifer, which forms the drinking water for millions as well the water source for one third of American agriculture. In other words, a massive tar sands oil spill could pollute not only the water but crops used for food consumption. During the tar sands oil extraction process, vast amounts of water are needed to separate the extracted product, bitumesidesumaen, from sand, silt, and clay. It takes three barrels of water to extract each single barrel of oil. At this rate, tar sands operations use roughly 400 million gallons of water a day.

Higher gas and food prices: TransCanada has admitted one of its goals is to raise oil prices in 12 midwestern U.S. states thereby increasing revenue to the Canadian oil industry by $2b to $4b. Meanwhile, U.S. farmers, who’ve already spent $12.4 b on fuel (in 2009) could see expenses rise to $15b  if the pipeline goes through,  a cost which will surely be passed on to Americans as higher food prices.

5) Increased respiratory disease and cancer: The pollutants released by mining and refining tar sands will incept acid rain, smog and haze as well as other effects associated with lung disease and cancer. The solid or semi-solid waste, embedded in the toxic sludge, will unleash astronomic rates of kidney, breast, colon, pancreatic and liver cancers by the ingestion of the water soiled by the tailing ponds.

6) Climate disaster: Any future tar sands development – say via Keystone XL- will mean “game over” for the planet according to NASA climate scientist James Hanson. I already noted earlier how much extra load of carbon will be added and how it impinges the 550 gT critical threshold.


There should be no connection at all between raising the minimum wage and the Keystone XL pipeline. The latter is a horrific idea that neither the planet or the nation can afford while the former is long past due and would spark an increase in aggregate demand because it would give millions of workers the income to spend - which is what our GDP and economy is all about.  All the research done regarding effects of raising the minimum wage - except those coming from right wing think tanks - show it to be a boon for the economy - and with only minimal cost effects for most employers.

It is the right thing to do and the human thing. And besides, if we refuse to provide this increase in income we can't complain as ever more families have to go on food stamps to survive! It's either more food stamp beneficiaries or higher minimum wage. Take your pick!