The Fight for $15 isn’t living up to its promise.
For years, liberals have claimed that the minimum wage needs to increase to $15 an hour to provide a living wage for full-time workers. The stated goal, as socialist Sen. Bernie Sanders writes on his website, is straightforward, “We must ensure that no full-time worker lives in poverty.”
In one way, the campaign has been remarkably successful. California and New York are phasing in a statewide $15 an hour minimum wage. Numerous cities, including Seattle, Minneapolis and Washington D.C., have passed $15 an hour minimum wage laws as well.
But as sure as the sun comes up in the morning, progressives are now demanding more.
“$15 an hour: A higher wage, but hardly a living,” a CBS News headline from October reads. After bemoaning the inadequacy of the $7.25 an hour federal minimum wage, the CBS story asserts that “even at $15 an hour, life doesn’t get a whole lot easier.”
The main reason for this is the price of housing in many large cities. Restrictive housing policies combined with strong demand have led to extremely high rental prices in places such as New York City and San Francisco. Rather than address the regulations and land use and zoning policies that exacerbate this problem, liberals have found a new solution.
“The arrival of a $15 hourly minimum wage cannot be considered the end of something,” New York Times columnist Ginia Bellafante wrote last week. Her suggestion? A $33 an hour minimum wage for the Big Apple.
Ah, the wonders of progressive economics. Just pass a law mandating that everybody must make at least $68,000 a year — with full medical benefits, vacation time and family leave allowances, of course. But why stop there? Why with a stroke of the pen, we could all be millionaires!
And the cow jumped over the moon.
The minimum wage was never intended to provide a living wage. Most minimum wage workers aren’t trying to make a living. A great many are earning supplemental income. Most are between 16 and 24 and work part-time. Inexperienced workers don’t produce that much value. It can still be profitable for the company to hire them — at a lower wage rate.
This creates a win-win. Companies make money by hiring less expensive workers. The workers receive the experience and training that allows them to move up the career ladder. According to the Heritage Foundation, two-thirds of minimum wage workers see their wages increase within a year of starting their job.
This normal career progression is short-circuited when politicians meddle in the marketplace and set unreasonable wage floors. As some leftists are now acknowledging, it’s not even as beneficial as advertised for the workers who manage to find work.
Raising the minimum wage isn’t going to end poverty. But it can make it worse.