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.
Issues & Insights is a new site formed by the seasoned journalists behind the legendary IBD Editorials page. We’re just getting started, and we’ll be adding new features as time permits. We’re doing this on a voluntary basis because we believe the nation needs the kind of cogent, rational, data-driven, fact-based commentary that we can provide.
Be sure to tell all your friends! And if you’d like to make a contribution to support our effort, feel free to click the Tip Jar over on the right sidebar.
And he isn’t even using his own money, people send him money. As a business owner I do not have the luxury of people just giving me money, it has to come from somewhere else, layoff employees, but hours, raise prices …
Please do explain who might be the ones behind the agenda of the Democrat, if you claim they want to hurt workers, while simultaneously trying to destroy business.
Seriously? I’ll overlook for the moment your strawman of “hurt; destroy.” Let’s see if I can distill another way of stating the premise … The $15 minimum wage is a variant of the class warfare the dems perpetuate in order to gather votes. It’s like passing out candy to them. There’s no care for the impact on either side – the one forced to pay or the one receiving. It merely “sounds” good. In reality, businesses are forced to either increase prices or reduce the new cost – and many times the latter is required because of competitive forces in the marketplace among other realities, e.g., contractual obligations setting prices. So instead of making YOU pay a dollar more for your lunch, the workers are shuffled – their hours reduced, some laid off.
Argue the data if you like, but your comment is rather a toss-away as presented.
They do that now to get out of insurance. Companies are not in the business of taking care of their employees their in it to make money at the expense of the wmployes
I believe it is called ignorance that is driving them. Most of them have never run a business and many have never been in the private sector so are ignorant of how government actions can affect a business.
Bernie learned a lesson in supply and demand. Now, will he take that lesson and change his rhetoric? The short answer is NO.
If the consequences of a policy or program are patently obvious before its implementation, do not assume those results are unintended. If voter support for Democrats high among the unemployed and government dependent segment, policies that increase that segment are rational – if the goal is to gain electoral power and promote socialism. Artificially pricing any commodity above its perceived value insures it will remain on the shelves. Likewise unskilled labor. Bernie’s situation illustrates the effectiveness of raising the cost of labor above the utility level. The Progressive/Socialist goal is centralized power in the federal government yielding national (Stalinesque) dominance (despite strong regional differences) over the entire nation, which defeats the self-correcting competition between states where the success of their individual policies is tested. We see how this works in statistics on population movement – what states are people leaving – where are they going, a graphic democracy of mobility. National laws, control by the increasingly powerful national regulatory agencies destroys this dynamic by homogenizing the whole nation.
They, the democrat radical leftists, never fail to make our point for us! Higher minimum wages mean fewer jobs or fewer hours – take your pick, and that equals no huge increase in your take home pay or quite possibly no paycheck at all! Just what Republicans and Conservatives have been saying FOR YEARS NOW!
“Companies have to either cut jobs or cut hours — and sometimes both.”
Also outsource (to foreign countries) and, where possible, automate. Welcome to reality Bernie.
Would restaurant workers need a “guaranteed” $15/hr if the government hadn’t made tips “taxable income”?
The person who wrote this article is either very uninformed or very dishonest. The Sanders campaign pays salary plus full benefits starting at 36k/yr for FOs, which is basically unheard of for many of these campaigns (far higher than anything I’ve ever been offered on other presidential campaigns). Typically salaried jobs would not pay overtime, but because he supported the unionizing of the campaign and because everyone found themselves working long hours they wanted to re-negotiate a higher rate. No one is cutting anyone’s hours, they are just trying to insure that they are working closer to a 40-hour work week to keep pay in scale. When an employer says they can’t afford overtime so they don’t want you to work it… how on Earth is that a bad thing? Calling it “cutting hours” is so disingenuous. And the Sanders campaign offered them 42k to compensate for the OT, but they had other demands that they wanted so they negotiated for it. it’s how salary negotiations are supposed to go and literally everyone is doing what they should be doing. The fact that this article attempts to spin that into a negative light is ridiculous. Anyone insulting their practices is insulting the campaign and workers who are improving things and are fully missing the point. Negotiations and taking in worker demands is a good thing not a bad thing. And anyone supporting the narrative that it’s not is just ultimately selling a false idea that it’s impossible to pay people well or give them benefits so you shouldn’t be trying, which is what the rest of the campaigns do.
Furthermore, the idea that owners have no choice but to cut hours to make up for increased hourly pay is only an argument that will play for people that don’t understand economics at all. There is another choice. Make less profit. When the expenses (salaries) of a business grow, but the income doesn’t, only unprofitable or barely profitable businesses must cut hours to stay solvent. Any other business is reducing it’s costs to offset another cost rising to maintain its profit margin, not to stay in business. This is the type of economic fallacy that business owners use to keep their expenses low and pay their workers as little as possible. And they don’t get called out because most people don’t understand simple accounting….
Too bad, isn’t it, that government bureaucrats don’t decide these things. Their only motivation, as they play with other people’s money, is altruism right? Which is why collectivism is so successful over the course of history, and millions are falling over themselves to live in Venezuela and North Korea.
Why not a $50 min wage? The workers deserve it! Or $100! “There’s plenty of money in this world,” as DeBlassio says. “It’s just in the wrong hands.”
You either believe in freedom or, like Marx and Lenin, you don’t. And no matter how much government interventionism you impose, when it fails there will always be those who insist it failed because there wasn’t enough interventionism. And that is The Road To Serfdom!
https://www.amazon.com/Road-Serfdom-Documents-SERFDOM-Paperback/dp/B00QPVMNNA/ref=sr_1_7?keywords=road+to+serfdom&qid=1563942644&s=books&sr=1-7
His staff received salaries equal to $15/hour based on a 40 hour work week. His staff’s union just agreed to up the base pay to something closer to $17/hour to compensate for the fact campaign staffers typically work longer hours.
And yet it passed in the house just last week! And the Sanders campaign and union agreed to a new deal ensuring $15 an hour. Most will get $17. Nice try though.
So his campaign staff gets paid the same but has to work less? That sounds like a win to me.