A month ago, my Facebook feed (which reflects the fact that many of my friends are Progressives) was suddenly overrun by a series of posters, all pointing out that minimum wage work is insufficient to support the cost of a two bedroom apartment. It’s unlikely that the new minimum wage laws that went into effect on January 1, 2016, in 14 states will change these charts:
Also, in a charming irony, that problem is worse in most blue states compared to most red ones, as you’ll see if you compare the two charts below:
There are three major bad ideas packed into the notion that minimum wage should be the Rolls Royce of salaries.
The first problem is basic economics: The reality is that a higher minimum wage benefits the few over the many:
Increasing the minimum wage is an inefficient way to reduce poverty, according to a Fed research paper that comes amid a national clamor to hike pay for workers at the low end of the salary scale.
David Neumark, visiting scholar at the San Francisco Fed, contends in the paper that raising the minimum wage has only limited benefits in the war against poverty, due in part because relatively few of those falling below the poverty line actually receive the wage.
Many of the benefits from raising the wage, a move already undertaken by multiple governments around the country as well as some big-name companies, tend to go to higher-income families, said Neumark, who also pointed to research that shows raising wages kills jobs through higher costs to employers.
On its face, then, the charts’ premise, which is that higher minimum wages will see everyone in better homes, is wrong.
Second, the charts presupposes geographic immobility. If I were poor Californian, I would look at that chart and, instead of thinking “Wow, California employers should be forced to pay all workers almost $27 per hour,” I might think “Wow, given my job skills, I’m never going to make it in California. I need to look for a more affordable state where they have jobs in my line of work. Maybe I should move to the Southeast or the northern Midwest.”
Ironically, the ones leaving California aren’t the ones who can’t afford the two-bedroom apartments on their minimum wage salary. Instead, the ones leaving are the rich people who pay the taxes that allow people on minimum salaries to get subsidies that allow them to afford food and shelter. (Attention Governor Brown and your minions in the California legislature: You might want to brush up on your Aesop’s fables, paying particular attention to the story of the goose that laid the golden eggs.)
A subset of this geographic immobility is lifestyle immobility. The apparent presumption underlying the charts is “one person, one job, one two bedroom apartment.” The reality is that someone might have to work two jobs or that more than one person in the apartment might have to work too. That’s what the real world looks like. Indeed, here in cozy, affluent Marin, a lot of people maintain their spacious two- or three-bedroom houses by having both adults in the family hold full-time jobs. Sometimes you have to pay your dues to get what you want, and sometimes as your desires grow, you never stop paying those dues.
The third and, to my mind, most serious problem with those charts is what I call “the Veruca Salt problem.” Do you remember Veruca Salt, from Willy Wonka and the Chocolate Factory? Her catch-phrase was “Now, Daddy. I want it now“:
The Veruca Salt doctrine is the new ethos for today’s poor — at least as laid down by the political Left, not necessarily by the poor themselves. The two-bedroom apartment shouldn’t be tomorrow’s goal; it should be today’s mandate.
In the old world and the old days, if you were born poor, you remained poor. Kind of like the snotty Prince’s insult to Aladdin:
Even in the old days, though, if there was any room at all for movement, a few people moved. In the Roman Empire, a surprising number of slaves, whether they were manumitted or not, became rich and powerful. In late Medieval and Renaissance England, the church gave opportunities to bright boys from the lower classes who ordinarily would never have arisen above their small village or trade guild. The Ottoman Empire also raised up boys of insignificant background if their skills were deemed useful to the state. (Sadly, for many of those boys, literally losing their testicles was part of the deal. And I don’t mean “literally” the way Joe Biden does.)
When America came into being, it did something amazing: It created a system in which everyone, at least in theory, has the potential and opportunity for upward (or downward) movement. America was created without a class system, and the government could not force citizens into specific trades for government-approved reasons — something that finally became true for all Americans when American hypocrisy about freedom died on the battlefields of the Civil War. Jim Crow cruelly re-inserted government into people’s individual liberty, but that thankfully has passed from the scene too.
And yes, before anyone gets too excited, I know that over the centuries most people who traveled to or where born in America merely survived, rather than rose up. Roughly one hundred years ago, uncounted thousands in New York’s Lower East Side died in poverty or died one small step above poverty. But on the whole (and we know this because of census records), the children of the parents who suffered made it to the working or lower class, and the grandchildren of those suffering immigrant grandparents made it to the middle or even upper classes. Sometimes, with a genius like Irving Berlin, one person did it all, making the leap from abject poverty to incredible wealth in his own lifetime, based upon his own talent.
The traditional American system, whereby a person or a family, unfettered by government diktats, and aided by hard work, talent, and often strong family ties, leaves poverty behind, is what a Leftist of my acquaintance disdainfully calls “incrementalism.” Incrementalism, I was given to understand, has to make way for the Veruca Salt doctrine mandating that everyone gets it all now. No immigrant families should live squeezed into a tiny apartment (as my family did), or have to work two or three jobs (as my parents did), or have to have their children work (as I did). It’s unfair to the grandparent generation that it should suffer in America so that the child and grandchild generation can thrive in America.
The primary problem with this attitude is that it is economically unsustainable. We have only to look at the 20th century socialist experiment to know that a society in which the government controls the economy (which is inevitable when the government takes an activist role in ensuring that everyone is Veruca Salt) is a government that goes broke fast. As I’ve always told my children, the government doesn’t create wealth; it just prints money.
It’s also no use pointing to Europe as an example of a powerful socialist economic engine. One of the primary reasons Europe thrived in the latter part of the 20th century was the fact that America footed the bill, funding Europe’s renewed infrastructure immediately after WWII and paying for its defenses during the Cold War. Maggie Thatcher rightly noted that socialism is a beautiful system until you run out of other people’s money. With the Cold War over, Europe has started to have its day of reckoning.
The European socialist system also worked as long as it did because European nations were small, homogeneous, stable, and possessed fairly decent work ethics. With political correctness having destroyed those useful qualities . . . well, that’s creating some other interesting reckonings for those oh-so-smug Europeans.
The Veruca Salt doctrine also works badly when certain people, for whatever reason, won’t play by the Marxist rules of taking what you need, when you need it, but giving what you can, when you have it. American blacks, despite a half century of the government’s tender loving economic care refuse to be raised up economically. (And yes, that was a deliberate Fox Butterfield, because I strongly believe that American blacks, because of a half century of the government’s tender loving economic care have been rendered so helpless as to be incapable of being raised up economically.)
Modern Muslim immigrants also don’t follow those nice Marxist rules. Unlike 20th century Muslim immigrants to America, who rose and fell on the economic scale just as all other immigrants did, modern Muslim immigrants also suck relentlessly on the government teat. In America, more than 90% of them immediately go on Welfare. In Britain, Muslims (and their many wives) believe that they are owed welfare as Britain’s proper overlords.
The best that a cynic can hope for the increasingly large Islamic population on the dole, both here and abroad, is that life on the dole will have the same deleterious effect on Muslims as it did on American blacks. While American blacks do not deserve the dismal fate Leftists visited upon them, ascendant Islam might be less scary if welfare marginalized Muslims as much as welfare destroyed American black families, social structures, and work ethic.
Unfortunately, Islam’s jizya — the taxes dhimmis pay their Muslim overlords — is an integral part of the religion (and a proof of Muslim’s inherent superiority), means that it’s not clear that endless welfare payments for multiple generations will alter core Islamic ideology or its potential for bloody revolution when its adherents attain a certain percentage of the population.
To sum it all up, there’s a lot wrong with the current Leftist presumption that every person living in America should make at least enough to pay for a two bedroom apartment in any state, no matter how high the cost of living is in that state. The iron laws of economics, as well as reasonable expectations for human adaptability and incrementalism all militate in favor of a free market, rather than top-down government wage control.