WORKERS RECEIVE BIG BOOST
What if you could perform an experiment to compare redistributionist policies — which act as if our national economic pie is fixed and we have to change the size of the slices for fairness’ sake — with progrowth, free market policies that assume growth helps everyone?
There’s been just such a test pitting
Seattle and the U.S. economy, and the progressives in Seattle lost.
In 2015, Seattle began phasing in a minimum wage floor of $13 per hour for employees in large businesses and $12 in small businesses.
The University of Washington found the higher minimum wage did not result in significantly higher incomes for most workers because employers cut their working hours to afford the higher rate.
New workers are having trouble finding work, and those with jobs have to work second jobs outside the city to get enough hours.
Contrast that with October’s glowing national jobs report, showing what happens when you give business incentive to grow.
Employers added 250,000 jobs last month and are paying more to compete for scarce workers.
The biggest beneficiaries of growth are low-skilled workers, whose wages have risen by 23.4 percent since 2010. That’s almost double the average wage growth among college graduates, still a respectable 14.4 percent.
This is basic economics 101, which too many Americans apparently failed to study.
You can’t earn more than your work contributes in economic value to your business.
A researcher who discovers a wonder drug that could earn his employer billions stands to gain not just a bonus but a royalty.
Movie stars whose name on the marquee generates ticket sales in the hundreds of millions of dollars will earn more than offBroadway thespians.
A burger flipper, by contrast, produces a $1.50 sandwich.
Take out the cost of labor, raw materials, local, state and federal taxes, bank loans, rent, utilities, unemployment and business insurance, marketing and administration, and the net profit from that sandwich is maybe 30 cents.
Some companies like Amazon have the economic clout to raise prices and pay labor more. But that costs you, the consumer.
If you are younger than 50, ask Grandma how many TVs she could afford to own when Zenith made them in the good old USA and they were sold at mom-andpop retailers, rather than Walmart.
Another way is to make labor more efficient through automation. That’s why you are seeing McDonald’s set up self-service order kiosks in its restaurants.
But that leaves fewer jobs.
The progressive push for $15an-hour fast food jobs lacks sense.
What rational person thinks an adult should aspire to raise his family by working fast food?
Those have traditionally been entry-level jobs for students and others trying to enter the workforce. People who want to make money they can live off, work construction or industry, sales or medical services.
When the economy grows, as it has in the past two years, it generates economic activity that creates opportunity in these and other fields.
There are currently 7 million jobs available in our country, and fewer than 1 million Americans looking for work.
The economy grew because the Trump administration began lifting some of the more onerous regulations of the Barack Obama years and promised more.
President Donald Trump’s tax cuts put more money into the pockets of consumers and businesses alike.
We should require all high school students to take a course in economics and a personal finance course before they graduate.
It will result in better voters.