Minimum Wage

What Bernie Sanders Gets Wrong About the Minimum Wage

Politicians can’t repeal the laws of supply and demand.

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Sen. Bernie Sanders' presidential campaign was just disrupted by campaign workers demanding the same $15 per hour Sanders demands government force all employers to pay.

It serves him right.

Years ago, the activist group ACORN faced the same problem. After fighting for a higher minimum wage, they tried to convince a judge they should be granted an exception when paying their own workers, since they were involved in such important and productive work.

Government telling employers what to pay people creates nasty side effects.

Five years ago, Seattle won fame by becoming the first American city to mandate a $15 per hour minimum.

"Fifteen in Seattle is just a beginning. We have an entire world to win! Solidarity!" vowed City Councilmember Kshama Sawant.

New York state and many cities followed in Seattle's footsteps.

But now the results from Seattle are in.

Some people who already had jobs are being paid more. They're the winners under the new law.

But the losers are needier people: people who are looking for jobs.

After Seattle raised its minimum wage to $15, entry-level job growth stalled. Job growth continued in the rest of Washington state but not in Seattle.

The $15 minimum helped some people while hurting even poorer people.

"It's presented by minimum wage advocates as a win-win…no negatives," complains a skeptical Erin Shannon of the Washington Policy Center in my latest video.

Shannon points out the negatives. For example, stores that once hired inexperienced kids and trained them, giving them valuable starter experience, stopped doing so once Seattle raised its minimum wage.

"Politicians," one store owner told my video producer, "have no sense whatsoever about what it means to small businesses like us."

Today, for companies with more than 500 workers, Seattle's minimum wage is $16 per hour.

It's as if the politicians never learned about supply and demand. They think prices can be set wherever government decrees, with no consequences.

But there are many bad consequences.

Twenty-year-old Dillon Hodes understands that. He's a winner of the video-making contest run by my charity, Stossel in the Classroom. Hodes saw what happened to his friend when the Kroger she worked at raised its minimum wage to $12 an hour.

"She was getting paid $12 an hour, but slowly, they started cutting her days, her hours. She was (eventually) regulated to only working on Sundays. That's because she was young and inexperienced," explains Hodes. "She's worth the world to me, but she wasn't worth $12 to Kroger."

The $12 minimum wage took away her job. How much more damage will a $15 minimum do?

Rigel Nobel-Kosa, another sitc.org video contest winner, pointed out that many high employment "countries such as Iceland, Norway, Sweden, and Switzerland" have no minimum wage laws.

They do not end up with impoverished workers making a penny an hour. Wages, like all prices, are a function of supply and demand. Switzerland has much less unemployment than the U.S.

Esther Rhodes won our high school essay contest, pointing out that America's first minimum wage laws were racist. At the time they were passed, blacks were more likely to be employed than whites. Blacks were paid less—but they had jobs.

Rep. Miles Clayton Allgood (D–Ala.) then said he hoped a minimum wage law would stop "cheap colored labor in competition with white labor."

So, explains Rhodes, although Americans now think a minimum wage was meant to help the neediest people, "it was meant for the opposite: to keep the poor and the minorities from getting jobs!"

She also understands that the law now makes it harder for her to get a job.

"I'm 14," says Rhodes. "My labor wouldn't be worth $15 an hour!"

All government's workplace rules have nasty unintended consequences.

If only the politicians were as smart as the sitc.org kids.

COPYRIGHT 2019 BY JFS PRODUCTIONS INC.
DISTRIBUTED BY CREATORS.COM

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    Israel hit the south of Syria

    Russian Foreign Ministry spokeswoman Maria Zakharova reported an increase in the strength of private military companies from the United States amid the withdrawal of US troops. This is reported by Tass.

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    1. No foreign bots around here.

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  2. The thing is though, people still need to be able to eat and have housing.

    Why should small business (or any business) be entitled to cheap labor?

    What we have now is basically taxpayers are subsidizing business by paying for welfare (in various forms) by supporting workers who aren’t paid enough to get by.

    1. Wrong on every point. Nobody has a right to their own home. That’s why we have this weird concept called family or room mates.

      Business is not being subsidized by government, people are, namely poor people. The average person on min wage is off min wage within 6 months. Mon wage jobs are not career jobs but entry level jobs. It is not governments duty to subsidize those who refuse to move even one rung up the latter. Almost every min wage job has some sort of training program to move people up from mcdonalds to Walmart. There is under 4% unemployment meaning people can find jobs that pay more than min wage with little effort. Stop subsidizing and defending laziness.

    2. If you don’t pay people enough to afford shelter and eat then they die. Then you have to rehire and train, which is expensive, some new idiot who will also die. Which means you have the dumbest work force imaginable and your business will fail. Also word will get around that your killing your employees by not paying them enough to live, so even idiots will realize that isn’t a good deal.

      Businesses small or large are entitled to nothing. They enter voluntary agreements with other humans to supply them with labor for an agreed upon price.

      But yeah end the welfare state.

    3. Why stop at $15? Why not $100?

      1. $15 per hour is in line with what the minimum wage would be if adjusted for inflation or productivity. $100 is not. That’s why people are not asking for $100, and that’s what’s wrong with your question.

        1. $15 /hr, $100, $1000 or whatever per hour in fiat money makes no difference. Everything else will just scale to that. If the hamburger costs $4 when wages are $12/hr, then it’s going to cost $5 when wages go to $15/hr, and the $20K car will now cost $25K.

          The entities getting screwed are the ones with some sort of financial agreement in place denominated in fixed numbers of dollars: pensions, bonds, socialist insecurity, mortgages.

        2. “$15 per hour is in line with what the minimum wage would be if adjusted for inflation or productivity. ”

          cite please

        3. And your base minimum wage is what? Whatever it is, it’s arbitrary. So I’m going to say mine is the minimum wage when it was zero. So today it should still be zero.

          1. I’m good with zero. I’ve had workers that were worth every bit of that zero.

    4. Why should small business (or any business) be entitled to cheap labor?

      They’re not. If the market makes labor expensive, then the business will have to deal with it.

    5. Not every job needs to keep a family housed and fed. Not every wage needs to be a living wage for a family of 4. Young people starting out, retired people, disabled people can get a job if an employer is allowed to pay what they are worth to them. If the minimum wage is higher than the value an employee can produce, then that person won’t be able to get any job outside of a very tight labor market.

    6. One thing I have been wondering recently is whether the classical economic argument needs to be strengthened with data. Yes, raising the minimum wage will always create more unemployment. But what if the new unemployment is insignificant compared to some arbitrary standard of living increase for the millions that would benefit from the increase? Can this type of argument be refuted with deductive reasoning? Or do we need to cite historical data (which is not trivial)?

      1. What makes you think politicians are intelligent enough to determine a minimum wage that might accomplish this? And why would anyone conclude that that particular wage would be proper for all workers in all businesses?

    7. It’s not that businesses’ job to provide a living wage.
      Businesses don’t write welfare laws.
      Businesses also pay taxes which support those welfare laws. Are they self-subsidizing?

    8. “What we have now is basically taxpayers are subsidizing business by paying for welfare (in various forms) by supporting workers who aren’t paid enough to get by.”

      Would it be better to throw those workers out of jobs and put the whole weight of supporting them on taxpayers? Because that’s what raising the minimum wage does to lots of entry level workers.

    9. Sure. But why should people be entitled to some comfortable “dignified” material life when what they offer in material value of their labor does not pay for that?

      What we have now is taxpayers supporting people by paying for welfare by supporting workers who don’t produce enough value to get by.

  3. [Reads headline]

    “Everything?”

  4. No one needs 23 different flavors of interns!

    1. Not even Biden?

      1. Biden measures interns by smell…

  5. It is not that politicians who advocate such things as the minimum wage have no sense of what it is like to run a small business. It is that they do not care. The beneficiaries of minimum wage laws are visible. The victims of them are hidden, and may not even know themselves that government generosity with potential employers money adversely effected them. As a political calculation this is win-win. Whether it works economically is not entirely relevant to the politicians writing these laws.

    1. Don’t care? In some cases, it’s favorable to them. Communist politicians like Sawant would prefer people dependent and controlled by government. They’re more likely to vote her way.

      1. The way Stossel worded that gives the benefit of the doubt that the politician advocating minimum wages are merely ignorant. I would say that it does not matter if they know or not. Acting on the destructiveness of minimum wages does not serve the goals they have.

  6. “Years ago, the activist group ACORN faced the same problem. After fighting for a higher minimum wage, they tried to convince a judge they should be granted an exception when paying their own workers, since they were involved in such important and productive work.”

    So the question here is: Were they able to find an attorney who could keep a straight face while making this hilarious claim?

    1. That happened in CA. I’m sure ACORN was able to find a lawyer that was a true believer.

  7. “What Bernie Sanders Gets Wrong About the Minimum Wage”

    Short answer: Everything.

  8. Speaking of Sawant…when will someone finally put the Communist Control Act to the test and enforce it?

  9. “Politicians can’t repeal the laws of supply and demand.”

    Well, they certainly can repeal supply.

  10. “Politicians have no sense whatsoever-”
    Gonna stop you right there, buddy.

    1. They can sense the money in your wallet.

  11. IIRC the nordic nations all have no minimum wage set by government, but they DO have a minimum wage set by the unions. Something like 90+% of people belong to the unions, and the unions negotiate for union and non-union employees.

    However, there are no laws that state a worker MUST belong to a union, so, technically, they are all “right to work.”

    1. However, there are no laws that state a worker MUST belong to a union

      Something about freedom of association…

      1. …that oppresses people?

  12. From the article: “Rigel Nobel-Kosa, another sitc.org video contest winner, pointed out that many high employment “countries such as Iceland, Norway, Sweden, and Switzerland” have no minimum wage laws. … They do not end up with impoverished workers making a penny an hour. Wages, like all prices, are a function of supply and demand.”

    This shows that the writer of this article has no concern for honesty or integrity. Those countries have no minimum wage laws, but their minimum wages are set by collective bargaining through unions, not “supply and demand” only.

    If Mr. Stossel doesn’t care about that, what other facts doesn’t he care about? Do you, reader, have the integrity to feel anything about that?

    And to the people saying “Why not $100 per hour”, Why don’t you recognize that the movement is not for $100 per hour, but $15? $15 is in line with the projections of what the minimum wage would be if adjusted for inflation or productivity. $100 is not. Keep an eye out for straw men in your arguments, please.

    1. $15 is in line with the projections of what the minimum wage would be if adjusted for inflation or productivity.

      From what point in time?

    2. Because $15 per hour is what they think they can get away with. There is no limiting principle on “living wage” demands. There is no justification in the government setting g prices.

    3. “$15 is in line with the projections of what the minimum wage would be if adjusted for inflation or productivity.”

      Minimum productivity for all jobs across all industries equates to $15/hr.?

      Strawman, indeed.

      1. Our wise overlords and their activist army know the optimal price of all things.

    4. $15 is in line with the projections of what the minimum wage would be if adjusted for inflation or productivity.

      Good God you raging imbecile, you have begged the question twice in two different posts here and you don’t even seem to be aware that you’re doing it. Just go back to masturbating already.

    5. “$15 is in line with the projections of what the minimum wage would be if adjusted for inflation or productivity.”

      Repeating something over and over doesn’t make it true. If you’re going to spout that bullshit, you’ll need to back it up with some actual data.

    6. I said it would be $15 today if adjusted for inflation and productivity because that number is somewhere in between the values generally accepted for each of those (based on 1968 levels). For inflation, the number is $11-$11.80, dending on what you read. For productivity, it is around $21.50. I split the difference just to make a simple point, the point conveniently ignored, that the argument of “Why not $100 then?” is absurd.

      There is also the cost of living adjustment method. Going by this website: https://www.minneapolisfed.org/community/financial-and-economic-education/cpi-calculator-information it appears that the value of the 1968 minimum wage, adjusted to the consumer price index, would be $11.50 today. My statement that was that $15 is “in line with” the adjusted 1968 level, going by inflation AND productivity. here’s your citation if you can’t trust me https://minimum-wage.procon.org/ Why do you not care about the fallacious argument that I am addressing?

      And, way to ignore the first point I made about the dishonesty of the writer about European countries’ wage-setting mechanisms. Another inconvenient truth. Look, I am skeptical of a blanket $15/hour wage, too, but I do not like fallacies and misinformation. Along with the wages in Europe being determined by collective bargaining, with (according to this: https://www.minimum-wage.org/international/switzerland) the low end of unskilled worker pay (2200 francs/month) equaling about that many dollars per month, or about 13.70 per hour, assuming a 40-hour work week.

      And Switzerland has one of the world’s lowest unemployment rates, all with having wages that are set by collective bargaining, as the writer of this article omits.

      The fact that Switzerland’s minimum pay level is the equivalent of $25 per hour according to

      I don’t see anyone calling that argument imbecile over.

    7. The first Fight for 15 protests happened in 2012. Unless you think inflation since then has been zero, the demands should be for much higher minimum wages, especially considering that even many very liberal activists are proposing a phase-in of the $15 minimum wage that wouldn’t take hold until the mid 2020’s.

      The alternative is that your posts are just a complex way of saying the original Fight for 15 crowd was full of shit. One or the other.

      1. “especially considering that even many very liberal activists are proposing a phase-in of the $15 minimum wage that wouldn’t take hold until the mid 2020’s.”

        And the reason for that phase-in is to make the inevitable job losses less visible so as to not scare off the fools who continue to support them. Liberal activists are not only idiots, they’re evil, too.

    8. Well, I started at $2.10 per hour, doing work that required no skills. And adjusted for inflation, that brings us to almost exactly ten bucks. Not fifteen. Ten.

  13. Part of this whole problem is expectations of what “a decent living” is. 100 years ago, single people didn’t own houses, they lived with family, or rented *a* (as in *one*) room someplace (with the toilet down the hall) and either bought their meals from the landlord (“room and board” get it?) or ate out. Now a 3 room apartment is basic, with shower, kitchen, etc. Can’t live on your wages? How much is the cell phone bill? Again, even 50 years ago, there was a phone in the house, maybe two, and you didn’t live on it. Cars??? Try living near work and walking. Kids or pets??? Only if you can afford them.

  14. Comrade Bernie is your typical socialist idiot.
    He knows nothing of the administration of business, laws of economics, never owned much less ran a private business and is free and easy with other people’s money.
    The only bigger idiot than Comrade Bernie are his acolytes.

  15. Repeat after me:
    The minimum wage is 0.
    The minimum wage is 0.
    The minimum wage is 0.

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