Bernie Sanders inadvertently makes the case against a $15 minimum wage
This is why socialists are economic ignoramuses. Even while they promote their income redistribution schemes, they inevitably run afoul of basic economic laws that any freshman in college learns in Econ 101.
Forbes Tim Worstall shows how Senator Bernie Sanders actually proves the case against a $15 an hour minimum wage on his own webpage:
This isn’t, perhaps, quite what Bernie Sanders thinks he is saying over on his Senate page but it is indeed what he is saying. He’s providing us with the proof perfect that a rise in the minimum wage to $15 an hour will costs jobs. For he’s telling us that the rise in the minimum wage will be paid for by a combination of three things. Firstly, a rise in prices of goods made by minimum wage labour. This will reduce the volume of such goods purchased (no, really, demand curves do slope downwards) and thus lead to less minimum wage labour being employed. Part of it will be paid for by lower profits. And yes, demand curves really do slope downwards meaning that fewer people will be interested in the profits that can be earned by employing minimum wage labour: thus less minimum wage labour will be employed. Finally, he tells us that there will be a forced rise in the productivity with which labour is used: and a rise in productivity is the same thing as stating that less labour will be used.
The problem with socialist/Marxist economics has always been that they attempt to create an alternate universe where up is down, black is white, and because they mean so well, the normal laws of economics simply do not apply. Seattle, which began to phase in a $15 minimum wage in May, is already reaping the whirlwind.
Evidence is surfacing that some workers are asking their bosses for fewer hours as their wages rise – in a bid to keep overall income down so they don’t lose public subsidies for things like food, child care and rent.
Full Life Care, a home nursing nonprofit, told KIRO-TV in Seattle that several workers want to work less.
“If they cut down their hours to stay on those subsidies because the $15 per hour minimum wage didn’t actually help get them out of poverty, all you’ve done is put a burden on the business and given false hope to a lot of people,” said Jason Rantz, host of the Jason Rantz show on 97.3 KIRO-FM.
The twist is just one apparent side effect of the controversial -- yet trendsetting -- minimum wage law in Seattle, which is being copied in several other cities despite concerns over prices rising and businesses struggling to keep up.
The notion that employees are intentionally working less to preserve their welfare has been a hot topic on talk radio. While the claims are difficult to track, state stats indeed suggest few are moving off welfare programs under the new wage.
Despite a booming economy throughout western Washington, the state’s welfare caseload has dropped very little since the higher wage phase began in Seattle in April. In March 130,851 people were enrolled in the Basic Food program. In April, the caseload dropped to 130,376.
Prices are going up and those businesses most sensitive to labor costs are closing.
Looks like Bernie was right.