JAM Views exposes business and economic policies which consistently hurt the very beneficiaries the politicians are claiming to help. Injecting artificial minimum wages into free markets is high up on the bad policies list, and soon you are going to be hearing about it constantly in the news, again.
Anyone who makes it past Econ 101 knows that minimum wage laws drastically harm poor people, the middle class, and the overall GDP growth of the country. Unfortunately, less than 1% of the country takes the Econ 101 class (because "they" don't want us to take it - "Money Illiteracy By Design" Post 4/21/18). Also, at least prior to the current Presidential Administration, everyone has been afraid to honestly discuss how these policies destroy jobs. Now, Representative Bobby Scott, a long-term Congressman from Hampton Roads, Virginia, and the upcoming Chair of the House Education and Workforce Committee, is the latest politician to manipulate his own constituency into fighting for the $15 minimum wage. He and Nancy say that this is on the agenda for the first 100 hours of the new Congress. Do they believe that we are not educated enough to understand how this hurts us, or are they not educated enough, themselves, to understand the math? I constantly struggle with this question.
Michael Saltsman, Managing Director at the Employment Policies Institute, recently released some minimum wage history and discussion of how we even came up with the current $15. In 2013, President Obama declared that a $9 federal minimum wage was ideal. In 2014, Democrats decided $10 was the correct wage. Then in 2015, Rep. Bobby Scott declared $12 was the right price! (Almost sounds like fraudulently inflating a stock price in a hedge fund, but I digress). Then in 2017, Bernie Sanders introduced the $15 Raise the Wage Act. So, why would anyone believe that there is any economic analysis or validity behind this number, or that there is a beneficial impact to a mandated minimum wage to begin with? Have you ever heard the story of how President Trump, off the cuff, mentioned a border wall during an early campaign speech, the crowd went nuts, and then it became the foundation of his Presidential run? This is how the world works.
If you adjust for inflation, the previously-implemented minimum wage has fluctuated from $4 to $11 in today's dollars, with the average wage minimum being $7.50. Therefore, the current $15 policy is double our nation's historic average.
Studies by Miami and Trinity Universities show that by 2020 over 40% of the hourly workforce would be covered by a $15 minimum wage, but 2.3 million jobs would likely be eliminated. A Harvard and Mathematical Policy Research study determined that in San Francisco each $1 increase in mandated minimum wage created a 14% increase in restaurant closures. In JAM Views we have previously covered how the wait staff and bartenders, themselves, have violently opposed a $15 minimum wage law in Washington, D.C. Bartender Valerie Graham told the D.C. Council, "We chose these jobs because we make far more than minimum wage!"
The University of Washington released a study last year claiming that Seattle's minimum wage, raised in 2016 to $13 and next year to be $16, has caused a nearly 10% drop in hours worked. This has a net result of $75 to $125 less in the monthly paychecks of low-wage earners. No politics, no good intentions, and no Marxist policies can repeal the fundamental laws of economics. We consume less of what costs more.
What does not get any press is the fact that thousands of employers today, to include Amazon, McDonalds and Wal-Mart are actually implementing base pays as high as $15, but because of low unemployment and lower taxes - not government mandates. Private equity investor Andy Kessler summed it up as, "In February 1962 U.S. non-farm payroll stood at 55.2 million. Fifty-six years and several major tax cuts later, jobs stand at 149.5 million. Call it basic and universal capitalism. Let's stick with that, shall we?"
Since everything, everyday comes down to money, and all the rest is noise, why don't we demand that every politician pass an economics competency exam? "They" love to use licensing to control our free markets ("Licensing is a Scheme to Stop Competition" Post 10/7/18), so why don't we require them to have a license in basic economics and the principles of capitalism which built this country? Doesn't that make sense?
"It is sometimes easier to make the world a better place than to prove you have made the world a better place." - Michael Lewis.