In the past couple of years, a number of politicians have pushed hard for a minimum wage increase. Notable supporters include Elizabeth Warren and Bernie Sanders. Just this week, Connecticut agreed to incrementally up its minimum to $15 an hour in the next four years. Advocates of the idea claim that it will improve the quality of life for many, especially the working poor. However, they miss the fact (or don’t care) that their plan would functionally cut wages for millions of working-class Americans.
Nate Galt | United States
The federal minimum wage has been a controversial issue ever since it was introduced by President Roosevelt in 1938. Proponents of raising it say that it will help job growth and reduce poverty. However, opponents believe that raising the federal minimum wage will lead to layoffs and closures of small businesses. In all, the current federal minimum wage of seven dollars and twenty-five cents per hour is not a wage that someone can afford basic necessities with. People who are paid the federal minimum wage should be able to afford things such as clothes, food, and a roof over their head. Raising the minimum wage has been an issue adopted by “progressive” Democrats and the Green Party.
Taxpayers are paying for the minimum wage, just indirectly. They subsidize programs such as Food Stamps while large corporations save money by not paying their workers a living wage. This is extreme inequality because that money should go to workers employed by these corporations, not into the pockets of billionaires who try to cut corners by paying their workers very low wages.
Raising the minimum wage would help the economy. According to the Economic Policy Institute, a minimum wage increase to $10.10 an hour would make $22.1 billion flow into the economy and would create about 85,000 new jobs in three years. Further, economists from the Federal Reserve Bank of Chicago made a prediction that if the minimum wage were to rise by $1.75, household spending would increase by $48 billion in the next year. While these are merely predictions and are imperfect, they show that household spending increases as the minimum wage is raised. This boosts the gross domestic product and spurs job growth. For example, in Snohomish County in Washington State, there were no local minimum wages higher than the state minimum of $9.47. The state then raised the minimum wage to eleven dollars per hour. The full weight of the $1.53 increase, or over 16%, was assumed by employers. Subsequently, sixteen thousand jobs were created in Snohomish County.
Some people say that raising the minimum wage hurts small businesses. According to Think Progress, two-thirds of “low‐wage workers are not employed by small businesses, but rather by large corporations…” Also, the three largest employers of minimum wage workers are Walmart, Yum! Brands (Pizza Hut, Taco Bell, and KFC), and McDonald’s. A hike in the minimum wage will not make large corporations like Walmart shut their doors, and its workers will benefit from it.
Another reason the minimum wage should be raised is that it is impossible to afford rent in every state if one is paid $7.25. The state with the lowest “living wage” is South Dakota at just over 14 dollars, which is nearly double the current federal minimum wage. The definition of “living wage” is the bare minimum salary one needs to be able to afford rent, basic clothing, and groceries without skipping meals or receiving aid from the federal government. People who work full-time and are paid the minimum wage cannot provide basic necessities for themselves and their family, let alone afford to pay rent. Right now, this is the case, and millions of Americans are in a dire financial situation because they live on around only fifteen thousand dollars per year if they work full time. These people receive benefits which are subsidized by taxpayers because their employers do not pay them an adequate wage. As a result, businesses are saving money while taxpayers have to pick up the burden. If people get a living wage, they do not need to rely on taxpayer-funded public assistance. Better pay would let the government cut a lot of taxpayers’ funding of the money that it currently spends on programs to help counter poverty.
Others say that if the current minimum wage were increased, the price of items would increase. However, researchers at Purdue University found that increasing the wages of fast food workers to $15 an hour would only result in a price increase of around 4 percent. 4 percent of the cost of a Big Mac is around 23 cents, which is not a significant amount of money. The workers will have their wages doubled and will be able to make ends meet. Despite the negligible increase in prices, workers would end up with more money in their pockets and would be affected positively by this positively.
Increasing the minimum wage to 15 dollars would benefit the economy. It helps boost the GDP and job growth, and it alleviates taxpayers’ burden of paying for welfare. $15 per hour will allow minimum wage workers to make ends meet and to afford housing, clothing, and food without having to rely on government programs such as food stamps. It would reduce the number of Americans living in poverty as well. All of the above benefits have no significant drawbacks, so the only logical thing to do is to support raising the minimum wage to $15 per hour to help workers, the economy, and your tax rate. Should businesses get so-called “corporate welfare” while taxpayers have to foot the bill? Even though raising the minimum wage seems like a leftist, Bernie Sanders-type policy, all libertarians should support it. Taxes, welfare, and other benefits would be cut, leaving more money in Americans’ pockets.
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By Francis Folz | United States
Last week, I examined how libertarians and neo-progressives share common roots that run as deep as the anti-war movement in the 1960’s. Considering how libertarians and progressives have found common ground in the past, is it any wonder that libertarians and progressives find themselves together on so many present issues? After all, former Libertarian Party presidential nominee Gary Johnson once stated he found common ground with unabashed social democrat Bernie Sanders close to 70% of the time.
I believe one reason why it is quite prevalent to find common ground between libertarians and “democratic socialists” is because both sides share similar sentiments. At their cores, there is a sincere passion to uplift as many fellow citizens as possible and to achieve peace. It is often the means by which both sides believe it is best to achieve their underlying, intended goals that diverges the ideologies.
Although progressives advocate for a single-payer, authoritarian health care system, libertarians and progressives tend to agree that health care is too expensive and there are some common sense, capitalist ways to make health care more affordable. Both sides tend to agree on removing some of our costly, crony regulations, like the prohibition on purchasing drugs from other countries or the inability to buy insurance plans across state lines.
Progressives and libertarians also find themselves sharing opposition to America’s neocon foreign policy. Both sides acknowledge America’s foreign policy is often made up of expensive mistakes that only benefit the military industrial complex. Although progressives favor participation in multi-national organizations like NATO and the U.N. to achieve peace, both groups prefer a more humble approach to American interventions.
Both groups also champion civil liberties and civil rights, although how they are addressed sometimes differs. In regards to civil rights, neo-progressives tend to have collectivist mindsets and indulge in identity politics. This contrasts tremendously with libertarians who believe in liberalism and in empowering everyone via individualism. Bernie’s supporters, however, join forces with libertarians in defense of civil liberties. This includes our universal right to privacy and the defense of human rights activists like Edward Snowden and Julian Assange.
The size and scope of government is often where libertarians and Sanders-democrats digress from each other the most. Although both groups promote personal freedom and responsibility, especially in regards to reproductive care and drug usage, neo-progressives contradict those sentiments by bolstering gun control. In some cases, they even limit free speech. Whereas libertarians view government as a necessary evil that must be limited and restrained, neo-progressives believe the government’s role must be very robust in order to accomplish all desired outcomes.
I genuinely believe the hearts of today’s “democratic socialists” are in the right place. However, the majority of their “solutions” require a large, controlling state which makes countless decisions for the citizenry via regulations. I don’t question the intentions of those who fight for $15 an hour. After all, with the high costs of living, in part the fault of poor monetary policy, who can live off of $7.25 (less after taxes) an hour? However, neo-progressives fail to see how large corporations laud the prospects of running locally owned companies out of business through the consequential high prices and labor costs.
Socialism means well. After all, the intended goal of democratic socialists is to elevate the poor and the middle class. However, in practice, socialism never succeeds because humans are inherently greedy, especially when entrusted with resources, influence, and power. Our founding fathers recognized that corrupt attribute of humanity. Therefore, they constituted a liberal government, limited by the citizenry, the states, and the judicial system. It is time we find common ground with one another and work together towards restoring liberty and prosperity.
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By Jack Parkos | United States
Recently, a couple states have been not only playing with the idea of a minimum wage, but trying to pass bills on it. However, this is a bad idea. Not only is raising the minimum wage going to hurt the economy, but any minimum wage is detrimental. It hurts workers, business owners, and consumers.
The concept of a minimum wage implies that the government owns a business and its money. To believers in minimum wage laws, I have a simple question to ask. What gives the government the right to decide wages? The answer is, simply, there is none. A business is the property of the owner, not the government. The economy, not the government, is ultimately responsible for deciding wages.
This brings me to my next point. Many economists agree, a minimum wage is bad, let alone a higher one. Let’s assume we go with Delaware’s proposal to raise minimum wage to $10.25 by 2021. This is a $2 increase to the current price floor for labor. This may not seem like a lot, but for a business owner it could be disastrous. Raising the minimum wage to $10.25 an hour, or $15 an hour like many advocate, would be a disaster for the restaurant industry. On average, restaurants make only 5 dollars in profit for every 100 dollars in sales. It is already hard enough on restaurants to pay employees (which is why waiters get tips in exchange for lower wages). However, this is not always the case, and in many cases, employers would be forced to cover the full increase in the minimum wage.
This will lead to two major detriments. First of all, employers may need to cut back on their staff. A small business with a low profit margin may not be able to pay its employees a higher wage. As a result, the employer will likely lay off some workers to afford the wages of others. Also, a minimum wage increase may lead to an increase in prices. To afford to pay higher wages, employers are likely to have to raise their prices. However, any government policy that leads to price hikes is bad for the economy. Prices and wages should go up and down based on market forces of supply and demand.
Conversely, proponents of the minimum wage argue workers will be taken advantage of. Many claim workers will not be paid their fair share. Yet, this is simply not the case, and economic competition disproves the notion. Prices on labor follow the same economic forces as prices on goods. Just as nobody will pay 20 dollars for a cheeseburger, no one will work a job that pays 10 cents an hour. Thus, a business owner will look at profits and determine a wage that people would be willing to work for. That’s how it works for all jobs, and laws cannot substitute this process efficiently.
My final point is that minimum wage jobs are simply not meant to be a career. They ares stepping stones to that point. Many people’s first jobs are minimum wage jobs. The jobs are often marketed to high-school or college students trying to gain experience. Also, many of these workers, given good performance, receive a raise in their first year. Clearly, wages would be determined by the economy, not by government.
By Ricardo Tremblay | CANADA
On January 1st, 2018, the minimum wage in the province of Ontario, Canada, increased from $11.60 CAD to $14.00. On January 1st, 2019, the minimum wage will be further increased to $15. Out further west, the province of Alberta has also passed a law that will increase the minimum wage there to $15 in the month of October 2018.
After only a week of the change being put into effect in Ontario, prices across the whole province for various goods and services have increased significantly. This is due to the fact that businesses will not, and rightfully should not, simply let themselves lose money because they have to pay their workers 20%-30% more. The easiest and most effective way for businesses to make that money back is to increase the prices of their goods and services accordingly. In other words, the price for goods and services at many retailers goes up. This is bad for customers, as they have to pay more, and this is bad for the businesses, as they are not gaining anything out of the change themselves and have to increase their prices.
“But it benefits the poor workers!”, some may say. What these people fail to realize is that businesses have also been laying off many workers, and giving minimum wage employees shorter and less frequent shifts. These employees will end up seeing that this ‘benefit’ may end up costing them their job, or not doing much more than giving them fewer work hours. The employees aren’t exempt from the price increases either, so ironically they will end up paying more for products as well.
This creates a situation in which businesses, employees, and especially consumers end up unhappy and frustrated. Not many people, if any at all, actually end up benefiting from the minimum wage increase. In comparison, the recent tax cuts in The United States have resulted in bonuses and wage increases for employees all over the country, and this was all done without hurting consumers, and by instead helping corporations flourish.
All in all, this is just another of countless examples as to why government interference and a government-controlled economy lead only to harder times for everyone. Some Canadians may have suffered due to these changes, so hopefully advocates for higher minimum wages in other provinces and nations will soon realize the effects of their desires, and instead advocate for a freer, more stable method to benefit the working class, that isn’t at the expense of everyone else.