McClaughry: Bernie Sanders and minimum wage effects

By John McClaughry

Bernie Sanders has made it this year’s great cause to increase the federal minimum wage to $15. But regulatory law expert Mario Loyola writes that “Americans don’t fully understand … the many ways it hurts the very people it’s supposed to help. As the National Bureau of Economic Research concludes, “The data show that increasing the minimum wage results in a significant net increase in unemployment. The increase is particularly pronounced among young adults — and most pronounced of all among low-skilled workers.”

The Congressional Budget Office found that “The $15 [minimum wage] would reduce real incomes by $9 billion overall,” with an $8 billion increase in incomes for those below the poverty line more than offset by a $16 billion loss of income for those above the poverty line.”

As Loyola writes:

Perhaps the most regressive impact of the minimum wage, and perhaps also cruelest, is the replacement of opportunity with dependency. For the least-skilled, least-educated workers … often the only way to climb out of poverty is by learning skills and making connections in the workplace. But the combination of a high minimum wage and the threat of losing welfare benefits in effect pushes the least-skilled Americans out of the labor force entirely. Thus shut out of the most effective avenue of social mobility available to them, they predictably become stuck in a cycle of dependency that tends strongly to trap their children and their children’s children as well, an insidious new kind of segregation.

Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Gage Skidmore/Flickr

4 thoughts on “McClaughry: Bernie Sanders and minimum wage effects

  1. The deceitful left, like Sanders, presents income similar to how they present healthcare … very myopic. Forcing wage rates by law are not what is important, but rather it is buying power that is important. If an increased wage rate means losing your job, that helps nobody. Likewise, if increasing wage rate pushes the costs up, the net is reduced buying power.

    In healthcare the left focuses on what is spent on healthcare, when what is important is value. It is easy to reduce what is spent, just like it is easy to pass a minimum wage increase. But neither do anything to help anyone, except the politicians who are able to dupe the naïve voter.

    The right focus is on standard of living and the free-market – the free interaction of people – is by far the best approach. The only problem with giving people freedom is that it does not empower politicians.

  2. The deceitful left, like Sanders, presents income similar to how they present healthcare … very myopic. Forcing wage rates by law are not what is important, but rather it is buying power that is important. If an increased wage rate means losing your job, that helps nobody. Likewise, if increasing wage rate pushes the costs up, the net is reduced buying power.

    In healthcare the left focuses on what is spent on healthcare, when what is important is value. It is easy to reduce what is spent, just like it is easy to pass a minimum wage increase. But neither do anything to help anyone, except the politicians who are able to dupe the naïve voter.

    The right focus is on standard of living and the free-market – the free interaction of people – is by far the best approach. The only problem with giving people freedom is that it does not empower politicians.

  3. When the outcome of a law or program can be predicted and is predicted from its proposal, it is folly to assume that is not the desired result, is its goal – no matter what the political progenitor of the program claims as his motive. The Biden administration could push someone off a cliff “so they could learn to fly,” blame the victim for failing to take wing and get rewarded by the Progressive toadies for his humanitarian genius. They’ll shower him with praise for the Keystone shutdown that keeps Warren Buffett’s Burlington Northern in the profitable oil shipment business, produces more pollution, more hazards, puts thousands out of work, introduces significant insecurity of private investment in projects requiring sustained government approbation and does nothing good for the U.S. energy security status or ability to counter international manipulation of energy products.

  4. Perhaps the most regressive impact of the minimum wage, and perhaps also cruelest, is the replacement of opportunity with dependency…..

    THAT IS THE PLAN!

    They are creating a poverty trap on purpose. Why people in government are making a ton of money off this system. It keeps their voters on the plantation.

    This is the plan to create modern slaves, except in this case the masters are making money off the system. $534/sq. ft affordable housing says it all. They can’t make this kind of money on Vermonts most expensive homes….

    The list goes on. Who owns all this “affordable housing”?……it’s not the common man, so the wealth again goes away from the common man.

    Drug dealers give out free drugs to get people hooked. Politicians give out free money to enslave the citizens.

    It’s not that they can’t figure out how to solve the “benefits cliff” they don’t want to. They want you trapped and dependant upon the state, money and votes, they get both for doing this, you get trapped in poverty. Enjoy your modern day slavery!

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