Watching the Democrat debate (I know right) tonight and surfing Twitter, and ran across the tweets below. This won’t be the “news” of the debate, but something I wanted to comment on. Because I’m thinking most people (about 68% of people including 92% of Democrats) really don’t know anything about macro economics.
68 percent of Americans are in favor of raising the minimum wage. That includes 92 percent of Democrats: https://t.co/XH3KcSfZfS #DemDebate
— FiveThirtyEight (@FiveThirtyEight) December 20, 2015
If @HillaryClinton wants higher wages, why does she support anti-investment taxation? https://t.co/2O2xzcjwpn #Cato2016 #DemDebate
— Dan Mitchell (@danieljmitchell) December 20, 2015
Look, just like you, I’d love for everyone to earn a good wage; however, there are a lot of caveats that go along with that remark, primarily the definition of what a “good wage” is in this country. Flipping burgers was never meant to be a career that sustains a family. Those jobs, minimum wage jobs, used to be mostly filled by young people who needed a job to earn a few bucks in spending money and get their foot in the door. They are low skilled jobs, and thus have low wages. Unfortunately we’ve exported millions of “next-step” jobs overseas, the ones you move on to when you’re tired of flipping burgers or get beyond a high school education. Because of the exporting of those jobs, our Government and Business Class has gutted America’s middle class, and has created a permanent service sector underclass that is totally reliant on a minimum wage.
You can be sure that most Americans don’t really understand the systemic effects of minimum wage increases. Even the Congressional Budget Office predicts job losses on the order of 1,000,000 jobs with an increase of the minimum wage to just $10.10. Our Democrat candidates want to push that to $15.00. Read for yourself what our own government says the effects of raising the minimum wage are. Raising the minimum wage is a band aid. To be sure it will benefit some wage earners, but it will slowly suck the life out the economy through inflationary effects and increased automation and self-service. Leading to fewer jobs at the low end of the market, and increased competition for those with low levels of education and skills.
The solution to “a living wage” is not going to be found by continued Government intervention in the labor market by setting wage floors. Policies that promote growth, investment, and culling unnecessary regulations on the business side and education (but not free tuition) need to be the primary focus if we want to see jobs created and wages increase in the USA. From what I’m hearing at the Democrat debate tonight, all we’re going to get is more government subsidization, and thus ever increasing debt.