First, the good news: economic prospects for entry-level workers in California and parts of New York have just massively improved. Governors Jerry Brown and Andrew Cuomo just signed bills to increase their state’s minimum wages to $15 per hour.
Governor Cuomo’s celebration of the new law, where he was joined by Hillary Clinton, contained the standard “Raise the Wage” talking points:
“At $9 an hour you can’t afford to raise a family in New York and that’s why we’re going to raise it to $15 an hour to restore fairness and decency.”
Jerry Brown’s announcement in Los Angeles contained much of the same type of feelings-oriented sentiment as did Cuomo’s, but it also contained 2 elements of actual truth that are rarely heard from progressives:
“Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense because it binds the community together to make sure parents can take care of their kids.
(Work is) not just an economic equation, but part of living in a moral community.”
Firstly, it is utterly impossible to justify a minimum wage from an economic perspective and it is refreshing to hear Brown acknowledge something almost every serious person understands to be true.
Although fairness and decency are terrific things, to be sure, they don’t address three never-mentioned truths of economics:
- Minimum wages only apply to those that manage to keep their jobs.
- For those that lose their jobs or are never hired at all, their minimum wage remains at $0.
- Minimum wages are required to be paid only by those businesses that remain in business.
In economics-speak, raising the cost of something will result in less people buying it. Raising wages will necessarily result in fewer people working. This undebatable fact is usually ignored by proponents of raising the wage.
The Governor’s attempted justification for ignoring this fact requires a nifty and complicated mind trick. He is asserting that labor and wages are more than just about work and the amount of pay received for performing it. In this vision, the employer has an obligation to consider the value and worth of the worker themselves, as a human being – all the more if they are a parent.
In other words, it is wrong for a company to say “this particular job is worth $X and we will pay that for someone who is willing to do it.” The preferred transaction is “this particular job is worth $X and we will pay $Y more than that because it’s a human being that will be doing the work.”
The other truth told by Brown in this statement is actually much more believable, so much so that he now probably regrets it. Notice the inclusion of the word “politically” in the statement. It’s not just for the sake of society and morality that a minimum wage should be set by the state. It’s also politics.
This is what he really means:
“It is electorally wise to mandate higher wages and castigate as immoral those that are opposed to them. My coalition of support from liberals, government workers, unions, the financially unsatisfied, and statists would break down immediately if I pointed out that this economically nonsensical law will reduce employment, threaten businesses, and further increase joblessness among the youth and inexperienced.”
Of course, Brown would never actually go this far, but kudos are certainly due for at least hinting at it. It’s incredibly refreshing to hear truth from a leftist lifetime politician. It certainly took guts. Cuomo, perhaps less drought and 60’s-addled than California’s governor, was able to make his statements while uttering no truths at all. That also takes guts, as well.
Thank you for reading and please share!