'Living Wage' Arguments Fall Flat

One of the “issues” Democrats appear to be focusing on for the upcoming 2016 elections is income inequality. While it sounds like something that should be addressed, I have to wonder whether it's an issue anyone can adequately deal with without yet another round of “Make the wealthy pay their fair share” or “The only way to solve poverty is to raise the minimum wage”. Both of these so-called solutions have their own problems, something that has been trivialized by Democrats in an effort to make everyone ignore the unintended consequences of those solutions.

Elizabeth Price Foley addresses some of those issues on Instapundit, delving into the income inequality issue, pointing out how it will become the cornerstone of Hillary's campaign for the White House, and how they're getting it exactly wrong. I could spend the next 10,000 words explaining them, but I let you go the Elizabeth's post and let you read them yourself.

The other issue is the self-deceptive issue of raising the minimum wage, more than doubling it, all in an effort to reduce poverty. The sell it by promoting the idea of the “living wage”, but ignore a number factors that make their solution a non-starter. I think the best way to describe it is that they want to treat the symptoms and not the cause, as if that will fix the problem. But their fixes won't have the effect they think they will and will, in fact, make things worse. Call it just another version of their 'fixes' for homeownership and college tuition, neither which had the results they promised.

Reading the numerous comments to the living wage piece in the Washington Post, it becomes evident that many of the usual suspects haven't really thought things through. They lambaste Walmart and McDonalds for paying minimum wage and providing mostly part time jobs. I know a lot of people who work for each of these corporations and with few exceptions, no one makes minimum wage at either of those places for long. If they do a good job they get pay raises. If they don't do a good job, they don't.

Walmart recently announced it is raising its starting pay rate to $9/hour. The WaPo commenters see it as a sign that Walmart has been shamed into raising their starting pay, but as one of the local Walmart managers I know has told me, it's in an effort to help keep their employees and to entice others to apply for jobs there. But of course to many that's not enough. They thing they should be getting a minimum of $15/hour. The problem is that many of the jobs at places like Walmart aren't worth that much. It is unskilled labor, period.

Another one of the arguments made for raising the minimum wage is that no one can support a family of four on minimum wage. So what? Minimum wage was never meant to do that. It was for entry level, unskilled jobs. Most of the working poor the Democrats like to use as examples are making well above minimum wage, so that argument falls flat.

One unintended consequence of raising the minimum wage to $15/hour? Teen unemployment, already too high, will skyrocket. No one in their right mind would pay that kind of money to a kid who has never had a job before when for that kind of money they can hire someone more mature and experienced. (At the farm where BeezleBub works, $15/hour can hire experienced and hard working migrant workers, each who can do two to three times the work of an inexperienced teenager. Who do you think the farm owner will hire? Hint – it won't be the inexperienced teen.)

This is an emotional issue for some Democrats. But as experience has shown, emotions cloud judgment and basing important decisions and government policies upon emotion is always a bad idea. That's because the Law of Unintended Consequences exerts itself and creates bigger problems than the one being 'solved'.