Sometimes predicting the future is difficult (ask anyone who thought we’d have flying cars by now). But sometimes foreseeing what is going to happen — at least to a high degree of probability — is all too easy.
For example, it’s fairly simple to ascertain that sometime in 2017 or 2018 we will see a huge spike in the unemployment for the working poor and increasing the replacement of low-skilled jobs with automation (i.e., robots). The reason: the $15 minimum wage.
Earlier this year the first and fourth most populous states in the U.S. — California and New York — adopted the increase to $15. Numerous cities have also adopted the higher wage floor. But perhaps the most significant step forward for the “Fight for $15” movement is that it is being adopted by the entire Democratic Party.
On Friday, the Democratic National Committee released a draft of the proposed party platform that includes a number of economically destructive proposals, including a federal minimum wage of $15:
Democrats believe that the current minimum wage is a starvation wage and must be increased to a living wage. No one who works full time should have to raise a family in poverty. We believe that Americans should earn at least $15 an hour and have the right to form or join a union. We applaud the approaches taken by states like New York and California. We should raise and index the minimum wage, give all Americans the ability to join a union regardless of where they work, and create new ways for workers to have power in the economy. We also support creating one fair wage for all workers by ending the sub-minimum wage for tipped workers and people with disabilities.
Democrats support a model employer executive order or some other vehicle to leverage federal dollars to support employers who provide their workers with a living wage, good benefits, and the opportunity to form a union. The $1 trillion spent annually by the government on contracts, loans, and grants should be used to support good jobs that rebuild the middle class.
If you wanted to create a proposal that would harm the poor while giving the appearance of helping them (in order to win their votes), it would be difficult to improve on this approach.
As I’ve written before, increasing the minimum wage to $15:
- Motivates businesses to replace low-skilled workers with automated machines;
- Increases unemployment of the working poor;
- Ensures that young African American men won’t be able to find a job, and
- Helps white teenagers while doing almost nothing for those in poverty.
Additionally, ending the sub-minimum wage will almost completely eliminate an entire sector of jobs for people with physical and mental disabilities.
If I were cynical I’d assume that the drafters of the DNC platform had nefarious motives. But I don’t really believe that. I assume that they are merely deeply and profoundly ignorant about economics (even economists on the left recognize the harms of the policy).
Unfortunately, economic ignorance is rather widespread in America, which is why the draft will likely pass when it’s voted on later this week by the 187-member platform committee.
It’s also likely to be adopted by the next president. Since the GOP will be nominating the deeply unpopular and economically illiterate Donald Trump, Hillary Clinton is all but assured a victory in November. While she may have a difficult time getting the minimum wage increase through Congress (assuming the Republicans don’t lose the House and Senate along with the presidency), she will be able to sign the model employer executive order on her first day in office.
Such an executive order would give preference for federal contracts to companies that are unionized, pay $15 minimum wages, have paid leave, health care for their workers, etc. Not only would this require taxpayers to pay more for goods and services bought by the government, it would incentive cronyism and corruption.
For those of us who truly care about the poor and disabled (and not just the appearance of caring) and who oppose fraud and waste in government, the near future looks bleak. The best we can hope for is that the implementation of these policies will be limited and their destructive outcomes so obvious that even the Democrats won’t be able to overlook the harm they’ve caused.