As characters in South Park would put it, “Have you seen this? Have you heard about this?”
Across the United States, we are seeing the never-ending fight from the left to promote an increase in the national minimum wage. Low and behold, key players and “party leaders” on the other side of the aisle are showing absent minded economics to back their agenda.
Colorado is facing a ballot measure to amend the state constitution to increase minimum wage over several years, Democrat presidential nominee Hillary Clinton wants to raise the federal minimum wage from $7.25 to $12 an hour, and local jurisdictions have jumped the gun on minimum wage hikes in their communities.
The obvious impacts
The typical argument is higher minimum wage equals higher paying job corresponding to rising cost of living equal to miraculous job growth due to incentive to get paid higher. Nevertheless, you are going to hit a few bumps in the road with this type of model.
First, it is proven, empirically, that higher minimum wages kill jobs for low skill workers in more than just in one industry. About two-thirds of those workers earning what is considered the minimum wage work in occupations that include food preparation and the other service oriented business including retail.
Continuing with this example, both the food preparation and service oriented business like working at a retail establishment yield low profit margins and bear heavy operating costs to continue day to day, based on the specific subsector of that industry. If a minimum wage increase is imposed by a central government authority, the businesses must bear the brunt of high costs on many spectra. For one, the most obvious is the business would have to pay more for fewer people rather than paying the same (or similar amount) of money for more labor. Culminating additional costs, business can be placed on the brink or even shutter, regardless if they were successful or not prior to the wage increase.
Jobs are lost and the economy suffers. So when someone says: “Every time we’ve increased the minimum wage, we’ve seen a growth in jobs,” is misguided and, well, “Mostly False,” according to Politifact.
Minimum wage and its eugenic origins
Aside from the obvious side effects on the economy, the whole idea of a minimum wages are rooted in the eugenics movement, the same school of thought that brought forth mainstream abortion on demand.
In an account from the Foundation for Economic Education (FEE), Jeffrey Tucker is Director of Content for the foundation, states that, “the minimum wage was originally conceived as part of a eugenics strategy — an attempt to engineer a master race through public policy designed to cleanse the citizenry of undesirables.”
Eugenics policy was rampant in the early twentieth century and has even been promoted as a source of racist and antisemitic solutions. The progressive economists of the time pushed for eugenics based minimum wage reform in statutes because it was considered a social benefit to the economy by keeping individuals who the “unemployables” out of the work place. Minimum wage policy was intended to be a deterrence to immigrants, in addition. In 1912, Sidney Webb in an article for the Journal of Political Economy even stated “[O]f all ways of dealing with these unfortunate parasites… the most ruinous to the community is to allow them to unrestrainedly compete as wage earners.”
Apply such things to modern times and who are the unemployables? In summation, the policy push for higher minimum wage is ridiculous and incredible.
If Democrats, almost all higher minimum wage advocates, continue to fight for such things, it further declares they are the most problematic of the two major parties and that any real opportunity is outside of their rank and file.