Tipsheet

Why Everyone Is Laughing at the Democrats' Minimum Wage Bill Right Now

Matt Vespa
Matt Vespa  |  January 26, 2021 8:25 PM

Well, it’s here, folks. The Democrats have put forward their bill to raise the minimum wage to $15/hour…by 2025. Yeah, you read that right. Personally, there should be no minimum wage, which The New York Times editorial board supported in 1987. Let the market decide the wages for these low-skill workers:

No wonder, but still a mistake. Anyone working in America surely deserves a better living standard than can be managed on $3.35 an hour. But there's a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market. A far better way to help them would be to subsidize their wages or - better yet - help them acquire the skills needed to earn more on their own.

An increase in the minimum wage to, say, $4.35 would restore the purchasing power of bottom-tier wages. It would also permit a minimum-wage breadwinner to earn almost enough to keep a family of three above the official poverty line. There are catches, however. It would increase employers' incentives to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.

If a higher minimum means fewer jobs, why does it remain on the agenda of some liberals?

Flashforward to 2021 and we know which side has won and what it has done for these workers. It’s screwed them—royally. They tried this in Seattle, and it’s ruined the restaurant business. Even USA Today was saying let’s pump the brakes on these minimum wage increases to $15/hour because studies and its application show that it hurts workers, cuts their hours, and kills their employment. It injects steroids into the automation timelines which eliminates a host of these minimum wage jobs as well. 

Now, under the Biden administration, we have a bill, but it’s not good enough for the far left. Sen. Bernie Sanders (I-VT), one of the faces of this movement, views the minimum wage increase as a moral imperative. Well, everyone is trashing it. Progressives note that it will still be a poverty wage by 2025, while conservatives are pointing out how Democratic voters were duped this cycle. 

This bill is ‘all talk, no action’ at its core. And no one believes this version will be the one that passes if it ever makes it through the House and Senate with these VERY slim Democratic majorities. Watch this bill get scuttled. Also, this is one of these tests this Biden White House will face. Can they stand up to the far left contingent that’s ascending, vocal, and ready to throw grenades inside the ship when the party doesn’t dole out radical left-wing bills that seek to alter this nation’s socio-economic fabric towards something akin to Castro’s Cuba? Democratic blood sports could be on the horizon.