Democratic presidential candidate Bernie Sanders, for decades an agitator for a government-forced minimum/living wage, announced over the weekend that his campaign’s wage floor will be increased to $15 an hour. To make it work, workers’ hours will be cut. Did he just take the minimum wage issue off the table for Democrats?
In 1986, known then as the “socialist mayor of Burlington,” Vermont, Sanders campaigned on raising the state’s minimum wage while running for governor.
During one of his runs for the U.S. Senate, where he is serving his third term, Sanders lamented on his campaign website that “five states and the District of Columbia have already passed a $15 minimum wage,” and was hoping “Vermont soon joins them.”
Earlier this year, Sanders tweeted: “How is it that in the richest country in the history of the world, we can’t afford to pay everyone a living wage? It’s time to raise the minimum wage to $15 an hour.”
Two months ago, Sanders crashed Walmart’s shareholder meeting, where he demanded, among other things, the retailer pay its workers at least $15 an hour because it was paying “many of its employees starvation wages.”
Last week he tweeted: “There’s nothing ‘extreme’ about raising the minimum wage to $15 an hour.”
Then over the weekend, Sanders had to go to an extreme. After taking fire for paying some members of his salaried unionized campaign staff the equivalent of the market rate of $13 an hour, he had to announce “he will cut staffers’ hours so that they can effectively be paid a $15-an-hour minimum.”
Sanders, who has never started a business, and therefore doesn’t understand how companies meet payroll responsibilities (or refuses to acknowledge the financial realities of having to do so), found out that there are consequences when wages are increased by artificial means rather than market forces. Companies have to either cut jobs or cut hours — and sometimes both.
And so do political campaigns, unless a campaign has limitless dollars to access.
While some research papers claim hiking the minimum wage won’t result in fewer jobs, most economists, if they are being honest, acknowledge that increasing the cost of labor forces businesses to eliminate jobs or reduce employee hours. History backs them up.
Researchers, for instance, discovered that in Seattle, the first city to raise its wage floor to $15 an hour, the average income for minimum wage workers has fallen, as jobs and hours have been cut. Sanders might not care about what happens to businesses, but the impact of Restaurants Unlimited, Inc., a Seattle-based company, filing for bankruptcy because “the cost of doing business has gone up,” will negatively affect workers.
Down the coast in California, which has become the birthplace of far too many poor public policy ideas, minimum wage hikes have chased companies out of the state, increased the “overall exit rates for restaurants,” and handicapped the restaurant industry so that it “has grown more slowly than it would have without minimum wage hikes.”
Meanwhile in New York, there’s a deep recession among restaurant workers that occurred after the city increased the minimum wage to $15.
Will Sanders, the rest of the Democratic presidential candidates, the Democratic members of Congress, and Democratic state and local lawmakers across the country learn from Sanders’ experience? Will the minimum wage die as a campaign issue?
Unlikely. The Democratic Party has never let economics impede its agenda to hurt workers.
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