When debating the minimum wage, the person who errs on the side of basic economics facetiously asks his opponent: Why not raise it to $50 an hour? $100? $500? If there are zero negative consequences to arbitrarily raising the wage floor, then you should shoot for the stars and ensure supermarket cashiers and fast-food cooks are bringing in what a Fortune 500 CEO earns each year.
Apparently, that sarcasm has backfired. It seems progressives have taken it seriously, at least according to a piece in The New York Times.
Facts don’t matter when you’re morally right.
Recently, The Gray Lady published a piece, titled “The $15 Minimum Wage Is Here. Why We Need $33 an Hour.” And, no, this is not something written in The Onion. The 900-word article argues that the newly-enacted $15 minimum wage is not enough to combat the affordability crisis, alleviate poverty, or ensure a four-person family can live comfortably in Brooklyn.
The author urges fellow leftists to not be complacent:
“In many, many cases, a $15 hourly wage will not bring a family, or even a single person, to an adequate living standard. That hardly means the fight was worthless; it just means the war is ongoing.”
One can only imagine a Times headline in the next decade: “The $33 Minimum Wage Is Here. Why We Need $75 an Hour.”
Fight for $33?
Unfortunately, public policymaking has metastasized into wanting and feeling, rather than thinking and reasoning. Political discourse is essentially what Representative Alexandria Ocasio-Cortez (D-NY) said in her 60 Minutes interview: Facts don’t matter when you’re morally right. And this is the only way you can succeed in politics these days – if it feels good do it; if you don’t like it, blame somebody else.
To anyone who understands economics – or just reality – this $33 proposal is absurd. Even the comments section at the left-leaning newspaper is split on the idea.
Why should there be opposition to such a feel-good policy? First, anyone who is starting out in the workforce is generally worth less than $33 per hour; state fiat does not instantly reverse it. Second, a few things would happen if such a wage were implemented tomorrow:
Small businesses would shut down.
Companies would halve their workforce or slash hours.
Automation efforts would accelerate.
Employees would take on more work for the same or slightly higher pay.
Experienced workers would gain the most at the expense of inexperienced laborers because of fewer opportunities (the newspaper conceded this point, alluding to a study).
Since someone just entering the workforce is either terminated from their position or unable to attain a job, it is virtually impossible to ever accrue human capital to sell your labor for that much money.
Then there’s a ripple effect. Higher wages lead to higher prices, which intensifies the cost of living, leaving low- and middle-income households in the same predicament as they are in now.
Progressive policies only deteriorate, not alleviate, the plight for low and middle-income households.
The Coffee Shop
If you ask a leftist what it means if their financial statements are covered in red ink, they’d respond that it’s time for a new printer cartridge.
Last summer, Rep. Ocasio-Cortez stopped by her old employer, The Coffee Shop, tweeting that she is “a normal, working person” who sought public office to create a better future. She thinks one way to achieve this paradise of tomorrow is to raise the minimum wage. She probably didn’t realize that her ex-employer was shutting its doors for exactly this reason.
Yes, that’s the sound of a palm smacking your forehead.
There is no doubt that the protests, the petitions, and the pleading in the Fight for $15 crowd was effective. They framed their argument much like neoconservatives did in the War on Terror: If you don’t support a living wage, then you side with the evil capitalists. It succeeded. State and local governments from coast to coast are phasing in this artificial wage, exacerbating automation efforts and leaving the young, unskilled, and uneducated unemployed and dependent on the government. If that was the main objective for labor activists, unions, and politicians, then they are getting their way.
Now they have set their sights on an even higher arbitrary figure. To $33 – and beyond!
