Tom Steyer raises the ante, promising voters a $22/hour federal minimum wage

One of the concepts that most excites the Progressive base is government-mandated minimum wages.  As good Progressives, both Bernie Sanders and Elizabeth Warren have promised their supporters that if they are elected, they will raise the federal minimum wage to $15.00 per hour.

They've now got competition, because Tom Steyer, a billionaire desperate to save the world from climate change, has announced that if he becomes president, he'll instantly raise the minimum wage to $22.00 per hour.  On its face, this seems like a terrible idea, but there's probably some logic driving it.

Once upon a time, when it was still an actual newspaper, rather than a media organ for the Democrat Progressive party, the New York Times could be intelligent — and that was certainly the case in January 1987, when it challenged pressure from unions to raise the federal minimum wage, then set at $3.35 per hour.  In an article appropriately titled "The Right Minimum Wage: $0.00," the Times offered the following astute economic analysis:

[T]here's a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market. 

[snip]

An increase in the minimum wage to, say, $4.35 would restore the purchasing power of bottom-tier wages. It would also permit a minimum-wage breadwinner to earn almost enough to keep a family of three above the official poverty line. There are catches, however. It would increase employers' incentives to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.

[snip]

Those at greatest risk from a higher minimum would be young, poor workers, who already face formidable barriers to getting and keeping jobs.

Exactly.  Minimum wages are not helpful; they are destructive.

There are ways the government can provide incentives for higher wages.  The best way is what Trump chose to do: removing the government as much as possible from the marketplace.

Without the burden of onerous and unnecessary regulations or the constant economic drain of unreasonably high taxes, businesses can spread their wings and fly.  As they grow, not only do businesses need more employees, providing work for more people, but market pressures will eventually see businesses competing with each other for good employees, driving up wages.

What's important about that kind of natural wage growth is that it reflects an actual growth in wealth, creating less risk of inflation.  However, if the government simply mandates that more money enter the system without any actual wealth creation, it's essentially working with businesses to print money.  More money without more wealth is a recipe for painful inflation.

Steyer, a venture capitalist, banker, and MBA, surely understands all this.  His problem is that, as he told the other Democrat candidates at the New Hampshire debate, all of whom he lovingly embraced, the only way to win is by offering a better economic deal than Trump can.  After all, "it's the economy, stupid!"

The Democrats' problem is that Trump is exceeding Coolidge, Eisenhower, and Reagan when it comes to good economic times in America.  Worse, every one of the Democrats' plans imposes burdens on the economy that will drag down that growth.

Steyer knows this, and he worries that voters understand it, too.  He, therefore, reasons that if you can't win on the economy, all you can do is try to bribe as many voters as possible into throwing their votes your way.  Andrew Yang does it with another inflationary idea, which is to give everyone $1,000.  Steyer is opting instead for the super-duper-high minimum wage.

Both are terrible plans, and we can only hope American voters are smarter than the Venezuelans were back in 1999, when they believed Hugo Chávez's promises that the government would give them money and they'd all be rich.

One of the concepts that most excites the Progressive base is government-mandated minimum wages.  As good Progressives, both Bernie Sanders and Elizabeth Warren have promised their supporters that if they are elected, they will raise the federal minimum wage to $15.00 per hour.

They've now got competition, because Tom Steyer, a billionaire desperate to save the world from climate change, has announced that if he becomes president, he'll instantly raise the minimum wage to $22.00 per hour.  On its face, this seems like a terrible idea, but there's probably some logic driving it.

Once upon a time, when it was still an actual newspaper, rather than a media organ for the Democrat Progressive party, the New York Times could be intelligent — and that was certainly the case in January 1987, when it challenged pressure from unions to raise the federal minimum wage, then set at $3.35 per hour.  In an article appropriately titled "The Right Minimum Wage: $0.00," the Times offered the following astute economic analysis:

[T]here's a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market. 

[snip]

An increase in the minimum wage to, say, $4.35 would restore the purchasing power of bottom-tier wages. It would also permit a minimum-wage breadwinner to earn almost enough to keep a family of three above the official poverty line. There are catches, however. It would increase employers' incentives to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.

[snip]

Those at greatest risk from a higher minimum would be young, poor workers, who already face formidable barriers to getting and keeping jobs.

Exactly.  Minimum wages are not helpful; they are destructive.

There are ways the government can provide incentives for higher wages.  The best way is what Trump chose to do: removing the government as much as possible from the marketplace.

Without the burden of onerous and unnecessary regulations or the constant economic drain of unreasonably high taxes, businesses can spread their wings and fly.  As they grow, not only do businesses need more employees, providing work for more people, but market pressures will eventually see businesses competing with each other for good employees, driving up wages.

What's important about that kind of natural wage growth is that it reflects an actual growth in wealth, creating less risk of inflation.  However, if the government simply mandates that more money enter the system without any actual wealth creation, it's essentially working with businesses to print money.  More money without more wealth is a recipe for painful inflation.

Steyer, a venture capitalist, banker, and MBA, surely understands all this.  His problem is that, as he told the other Democrat candidates at the New Hampshire debate, all of whom he lovingly embraced, the only way to win is by offering a better economic deal than Trump can.  After all, "it's the economy, stupid!"

The Democrats' problem is that Trump is exceeding Coolidge, Eisenhower, and Reagan when it comes to good economic times in America.  Worse, every one of the Democrats' plans imposes burdens on the economy that will drag down that growth.

Steyer knows this, and he worries that voters understand it, too.  He, therefore, reasons that if you can't win on the economy, all you can do is try to bribe as many voters as possible into throwing their votes your way.  Andrew Yang does it with another inflationary idea, which is to give everyone $1,000.  Steyer is opting instead for the super-duper-high minimum wage.

Both are terrible plans, and we can only hope American voters are smarter than the Venezuelans were back in 1999, when they believed Hugo Chávez's promises that the government would give them money and they'd all be rich.