Trump Wants to See a $10/hr Minimum Wage
Donald Trump is never afraid to say what’s on his mind, even if it makes no economic sense. Given his previous refutations of free market principles, it probably should come as no surprise. Once more, Trump is testing the limits of his conservative supporters by advocating a $10/hr minimum wage.
The Hill reported on his exchange with Bill O’Reilly where he brought the idea up. “You need to help people, and I know it’s not very Republican to say, but you need to help people,” the candidate said.
Trump went on to express that he would, “let the states make the deal.” Many states indeed already have risen their minimum wages about the federal standard of $7.25/hr. It is not clear how Trump will try and influence them if he assumes the presidency.
It is a positive sign that Trump considers letting the states manage their own affairs. However, Trump does seem to have an inflated sense of the actual power he could yield as president. Only the future will tell whether a President Trump would coerce resistant states into raising their wage standards.
The true issue here is, whether left to the states or not, that minimum wage increases are generally terrible ideas. In an economy where many people are not feeling the recovery, a higher minimum wage condemns the least well-off to unemployment.
The Minimum Wage is Just Bad Economics
As it stands, the minimum wage already cuts the legs out from under inexperienced workers. Even at $7.25, there are some people who simply can’t produce that much value. When faced with wage hikes, businesses lay off their least productive workers.
Some big businesses can afford the higher labor prices. Certain businesses can survive by passing the costs onto consumers. For others, however, they have to simply close shop.
An old-school Brooklyn diner recently shuttered due to the $15/hr wage they would have to start paying employees. “We’d need to raise the burger to $9 from $6.45. I don’t want to do that to my customers. They’ve been good to me. These are middle-class people,” owner Larry Georgeton said.
$10/hr would be less severe, but there would certainly be more cases where the middle class would suffer. It’s true that not every minimum wage leads to economic catastrophe. However, better options exist to pull people out of poverty.
Donald Trump Owes Conservatives a Better Economic Plan
The “mad-as-hell” conservative coalition rocketed Trump to the nomination. It is a betrayal to turn around and advocate policies that directly and adversely affect them.
The minimum wage is one of the biggest offenders to free market economics. Its advocates often cannot look past the obvious effects to consider the unseen consequences. It can be hard to measure how employers may start to overwork employees. It’s almost impossible to say how many jobs would’ve been created without this new burden.
Liberals will often say that the wage hike will stimulate demand, and thus is good for the economy. This, as a whole, is a farce. The higher wage only helps those that will actually be receiving it. All of those replaced by cheaper technology will be left considerably worse off. Regressive price hikes hurt the poor most of all.
Growth is always a surefire way to lift people into the next economic wrung. Trump has built his campaign on his business-savvy, among other things. It’s inexcusable for him to defend such economic voodoo. His big friends at the top may benefit as the mom-and-pop stores close down, but middle-America will suffer.
The American people deserve a better plan. Donald Trump, at the very least, owes us that much.