This is proving to be a pretty amazing week in terms of radical leftists/socialists accidentally learning about fiscal reality.
First, Bernie Sanders’ campaign was hit with complaints that it was paying poverty wages to campaign workers, so it got their average pay up to the $15-an-hour minimum wage he supports by slashing their work hours (at his advanced age, Bernie finally realized that if you’re forced to pay more for labor than you can afford, you either go broke or cut worker hours. Who knew?!)
And now, one of the four members of the Democratic Party's Suicide Squad, Rep. Rashida Tlaib, has inadvertently conceded what many conservative economists have said for years. She declared that a $15-an-hour minimum wage (which is putting restaurants and other small businesses out of business everywhere it’s been imposed) still isn’t enough to keep up with the rising cost of living, so why not make it $20 an hour?
This is exactly what every rational economist has been trying to explain to leftists like her for decades. Artificially raising wages beyond market value to a level the business can’t afford forces everyone to raise prices, so the raise is quickly negated by inflation. Meanwhile, it’s even worse for low-skilled workers because businesses are forced to cut employee hours, fire workers or shut down. So now those workers have even less money in a higher-cost world.
And the other point always made is, “If the government can artificially set the cost of labor without regard to the market and no negative consequences, then why only $15 an hour? Why not $20? Or $30? Or $100?! Then everyone would be rich!”
But of course, it doesn’t work that way. I want everyone to make their “maximum wage,” not their minimum wage. But you do that by encouraging people to work hard, to get an education in a useful field and hands-on experience, and by crafting government policies that encourage business expansion and economic growth, not punish it. You can’t do crazy things that defy common sense and fiscal reality and expect there won’t be negative consequences. Things like raising the minimum wage to $20 an hour or electing Rashida Tlaib to Congress.