Some of the many guests from The Other Washington season one.
Tomorrow, we’re relaunching the second season of our podcast, The Other Washington, with a fantastic interview with author and progressive truth-teller Thomas Frank. Frank, the author of Listen, Liberal, believes that the Democratic Party has been hijacked by a professional class of elites, at the expense of the working class. I can’t think of a better way to kick off a new (weekly!) season of The Other Washington, and I can’t wait for you to hear it. (You can read a sample of our talk here.)
But while we wait for the second season of the podcast to arrive, I’d like to urge you to visit (or revisit) the first season of The Other Washington. “Why would I want to listen to some old political podcast,” you ask? Well, because the first season of the Other Washington was constructed to be an evergreen listen. It establishes the foundation of our beliefs at Civic Ventures, and explains why we promote the policies that we do. The first season is a primer that says what we’re all about. The second season will put those bedrock policies into action and show how here in the other Washington we’re moving forward while leaders over in the other other Washington — that’s Washington DC—keep pushing us back.
Some sage advice for restaurant owners in this screenshot from the Hell’s Kitchen video game.
I simply can’t respond to every single dumb trickle-down take on the $15 minimum wage. If I felt the need to write back to every jerk who took an Econ 101 class and thought it earned them a Nobel laureate in economics, I’d be writing takedowns every hour of every day, with no sleep and no breaks. My fingertips would bleed from all the typing, and I’d need to rent a helper monkey to put drops in my eyes so they wouldn’t dry out as I type.
…lower quality restaurants, which are already closer to the margin of exit, are disproportionately impacted by increases to the minimum wage. Our point estimates suggest that a one dollar increase in the minimum wage leads to a 14 percent increase in the likelihood of exit for a 3.5-star restaurant (which is the median rating), but has no discernible impact for a 5-star restaurant (on a 1 to 5 star scale).
Heck then extrapolates from their abstract:
Bob’s Burgers may not be able to absorb the cost associated with paying $15 an hour for their entry level employees without coming to economic ruin. But swanky, upscale Eagle’s Nest Steakhouse, on the other hand, can simply jack up the cost of their filet by a few bucks and be okay.
In other words, the liberal minimum wage policy lets the rich get richer and the poor lose their job when the business they work for goes under.
Except that’s a really bad misreading of the study. The stars used in the study are taken from Yelp. The quality that they’re measuring is the customer experience, not the cost of the restaurants. Yelp has a second ranking, of dollar signs, to identify prices, but price didn’t really figure into the closures. In fact, the study overtly states that they found (emphasis mine) “evidence that the heterogeneous effects observed earlier are driven by quality rather than by the restaurant prices.”
So if Yelp customers rate Bob’s Burgers 4.5 stars because they like the food and the service, Bob’s Burgers will weather the minimum wage increase just fine. Some comparably rated Seattle businesses on Yelp would be Paseo, which serves no meal over $15.50; Tacos Chukis on Capitol Hill, which serves tacos for under $2 and tortas for $6.90; and Fat Ducks Deli and Bakery in the University District, which sells sandwiches for $8.95 each. (I can say from experience that all three of those restaurants, by the way, are excellent.)
And if the Eagle’s Nest Steakhouse has gotten more than a little gross over the years and customers now give it a 1.5 average star rating, under a minimum wage increase the odds increase for the Eagle’s Nest to go out of business. So even if Bob’s Burgers charges $10 for a burgers-and-fries meal deal and the Eagle’s Nest charges $75 for a steak and a side, it’s the Eagle’s Nest which, according to the study, is much more likely to go out of business.
Heck doesn’t seem to realize that he’s actually arguing against the power of the market. By opposing a decent minimum wage, he’s saying that a city should subsidize low-wage, low-quality employers by allowing them to legally exploit their workers. It’s more than a little weird to me that conservatives are now complaining about the consequences of the free market. For some reason, they hate the idea that businesses which can’t afford to pay their employees a living wage should have to close while other businesses thrive. I would hope that even conservatives like Heck would agree that low-quality employers shouldn’t be subsidized by taxpayers. When businesses pay less than a living wage, those employees often have to rely on government assistance like food stamps and rental subsidies in order to get by.
Look, opening a restaurant is risky business. Everyone knows that restaurants fail with shocking regularity. Every new location requires a confluence of many different qualities (including a good location, an inviting theme, a welcoming staff, an appealing storefront and, uh, one more thing that I can’t remember…oh, yeah — delicious food) to become a success. That’s an understood quantity for anyone opening a business.
The unfortunate truth is that there will always be losers. But by encouraging a smarter, more livable wage, we can ensure that there are more winners. Seattle, which raised the wage before San Francisco, has more eating places than at just about any other time in our history. Our unemployment nunbers are at near-record lows. If we did see the same closures of low-quality restaurants that the Harvard study found, those restaurants were quickly replaced by newer (and better!) ones. Which is exactly how capitalism is supposed to work: business owners are supposed to create new concepts, and consumers are supposed to choose between them. The concepts that don’t draw the most consumers either change into something more appealing, or they fail.
And the thing about raising the minimum wage that Heck really doesn’t get is this: when the minimum wage is increased, workers have more money, and that increases demand. It allows people to try more of their ideas out in the marketplace, and it allows consumers to decide between those ideas. Nobody ever promised that every idea would be a good one, or that every business would succeed. But Seattle’s thriving restaurant scene has proven that there’s more room for winners — among business owners, workers, and consumers — when everyone agrees to pay a living wage.
And I wanted to take a second to address Heck’s moronic final claim. He writes: ” If $15 is better than $10 an hour, doesn’t it stand to reason that $20 or $30 an hour is better than $15?” Heck, the poor dear, acts like this is a new concept, but it’s actually as old as the minimum wage itself. Nick Hanauer addressed this concern-trolling best in this piece in the Democracy Journal:
“If $15 is so great, why not $50 or $100?” critics sometimes mockingly ask. Well, because that would be stupid. The positive benefits of a $100 per hour minimum wage would almost certainly be overwhelmed by the costs. So no one is proposing $100; instead we are proposing $15, which is roughly halfway between what the minimum wage would be had it tracked either productivity gains ($21) or inflation ($10).
I hope that passage answers Heck’s question. I also hope he doesn’t misread it as badly as he misread that study.
Carls Jr. CEO Andrew Puzder was supposed to sit for Labor Secretary confirmation hearings tomorrow. The Trump administration repeatedly pushed the hearing back—it was originally supposed to happen over a month ago—and Puzder openly complained about how difficult the process has been.
And news is breaking that Puzder officially withdrew from the nomination entirely.
This is not because of the lack of Republican Senatorial support, though that is an issue, but because—poor baby—it’s too much work:
Good riddance. Puzder was an incredibly bad choice for Labor Secretary. In fact, he was possibly the single worst person in the country to be head of the Department of Labor. Justin Miller at the American Prospectwrote a great explainer on why Puzder is such a bad candidate, beginning with the fact that he “made more in one day ($17,192) than one of his full-time minimum wage workers would make in a year ($15,130.)”
I want to make no mistake about this so I’m going to restate: Puzder was quite possibly the worst Labor Secretary nominee this country has ever seen. He openly cheers on automation, saying that robots are “always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex or race discrimination case.” He does not have the worker in mind. He is firmly on the side of the CEO and against the average American.
But I have to be clear about another fact, too: Puzder is not an aberration. Now that he’s whined his way out of the confirmation process, he won’t be replaced with a polar opposite. In fact, Puzder was perfectly in line with Donald Trump’s employment policies.
According to the Palm Beach Post, Trump won approval from the U.S. Labor Department in October to hire 64 foreign workers through the H-2B visa program, which allows eligible U.S. employers to hire foreign nationals to fill temporary jobs… Trump will pay the staff wages comparable to what he offered last year. Though some will make less than they made last year, most will get a 1 percent raise.
Mar-a-Lago, the Palm Beach resort owned by the Trump Organization, doubled its initiation fee to $200,000 following the election of Donald Trump as president.
So the rich get richer while the poor get the shaft. That’s Donald Trump’s business philosophy. And even though Puzder didn’t get through the nomination process, that is what Trump’s going to look for in a Secretary of Labor. While today’s news that Puzder can’t stand the heat in this particular kitchen is heartening, we have to remember that the fight isn’t anywhere near over. It’s just beginning.
“Hello, yes, how many senses of accomplishment do the chili cheese fries cost?”
A particularly damning quote from Donald Trump’s nominee for Secretary of Labor, Andrew Puzder, is making the rounds again. Puzder, in his role as CEO of the Carl’s Jr fast food chain, published an editorial in the Wall Street Journal in 2014 against the idea of raising the overtime threshold:
…Workers who aspire to climb the management ladder strive for the opportunity to move from hourly-wage, crew-level positions to salaried management positions with performance-based incentives. What they lose in overtime pay they gain in the stature and sense of accomplishment that comes from being a salaried manager. This is hardly oppressive. To the contrary, it can be very lucrative for those willing to invest the time and energy, which explains why so many crew employees aspire to be managers.
Of course, we came very close to raising the overtime threshold last year, until an Obama-appointed judge from Texas shot it down and the incoming Trump administration — with Puzder in charge of the Department of Labor — crushed the hope of a lawsuit to save the threshold.
Today, if you’re salaried and earn more than $23,600 dollars a year, you don’t automatically qualify for overtime: That means every extra hour you work, you work free. Under the new proposed rules, everyone earning a salary of $50,440 a year or less would be eligible to collect time-and-a-half pay for every hour worked over 40 hours a week.
Reich and Hanauer call increasing the overtime threshold “a minimum wage hike for the middle class,” and that’s about right. It ensures either that workers are compensated for their time, or that workers don’t have to work more than 40 hours per week. Either way, the economy benefits because people either have more money to spend in their communities, or more time to be active members of their communities. These are real results that would happen immediately, as soon as the overtime threshold was raised.
But Puzder instead decided to fight policy with platitude. I’m going to repeat what he said because it’s so impossibly dumb that only through repetition can we understand Puzder’s worldview. Again, this is a CEO talking about his own employees: “What they lose in overtime pay they gain in the stature and sense of accomplishment that comes from being a salaried manager.”
You can’t eat a sense of accomplishment. Stature doesn’t pay the rent. It is frustrating that while Trump boosters complain about elitist progressives, a member of Trump’s prospective billionaire’s cabinet — a cabinet that will likely be wealthier than more than a third of all American households combined — is telling American workers that they are not worthy of payment for hours worked. At around the same time Puzder wrote those words, he was earning 291 times more annually than the minimum-wage employees at his restaurant, according to Forbes.
It’s pretty clear that unless he’s visited by three particularly convincing spirits on Christmas Eve, Secretary Puzder isn’t going to entertain raising the overtime threshold. This is because he knows that the money workers could be earning has, in his mind, a higher purpose: it could be funneled directly into his bank account and the bank accounts of people just like him. It’s pretty clear that Puzder believes he deserves the money more than his employees.
See, Puzder considers himself to be a job creator, even when he openly lusts after the idea of automating his restaurants so he doesn’t have to pay human beings to do work. What he doesn’t realize is that if every Puzder out there — every fast food CEO in America — were to automate their restaurants, their profits would plummet, because nobody would make enough money to frequent the restaurants. Robots don’t eat burgers.
No, it’s Puzder’s employees who spend the money that keep his restaurants open. And if he paid his employees what they deserve, they’d likely spend even more money there. But Puzder doesn’t care about details like that. He’s got his, and his friends have theirs, and everyone else? Eh. Puzder says let them eat their sense of accomplishment
Does downtown Seattle look like the restaurant-free hellhole promised by minimum wage skeptics three years ago?
On January 1st, the minimum wage for some, but not all, Seattle workers increased to $15 per hour. Seattlish explains the ins and outs of the law, but the gist is that large employers (defined as businesses that employ more than 500 people nationwide) who don’t provide health insurance for their employees are up to $15. Other large employers are at $13.50, and small employers range from $11 to $13 per hour, depending on the benefits they provide.
And so where are we now? Well, before the minimum wage became law, restaurant owner Tom Douglas estimated that “we would lose maybe a quarter of the restaurants in town.” Now, as Working Washington noted, Douglas has done an about face. The Puget Sound Business Journal interviewed Douglas about the competition he’s facing as a Seattle restaurateur staring down a new year. Douglas replied, “Almost 400 restaurants have opened in the last year. It is a challenge.”
Huh. So which is it? Will increasing the minimum wage kill a quarter of all restaurants, or does Seattle have way too many restaurants since raising the minimum wage? Douglas, who has previously recanted his opposition to the $15 minimum wage, seems to be entirely on the other side of the fence now: the minimum wage isn’t a problem for restaurants, he’s saying, aggressive competition is the problem.
Of course, some folks can promote two opposing ideas at the exact same time. Over the holiday break, conservative talk radio KIRO’s websitepublished a story about the closure of Louisa’s Café on Eastlake. Louisa’s owner, Alcena Plum, is asked about her business’s closure.
“I don’t want to put this all on the minimum wage,” Plum told KIRO, “but it was definitely a factor.” But another factor that Plum says led to the decline of her business is “the huge labor shortage for kitchen staff in this city.” The article says when she placed help-wanted ads, she would get “zero response.”
Again: which is it? Are you having trouble because of the minimum wage, or are you having trouble because of too much competition? Clearly, someone must be hiring; why isn’t everyone having the same trouble with the minimum wage? The piece ends with Plum arguing that people who own multiple restaurants (like Douglas) and businesses with wealthy backers will thrive, but that restaurants “like mine won’t survive this.”
I’ve eaten many times at Louisa’s, and I always enjoyed it — especially the cinnamon buns. But Plum’s last comment there reminds me of the owner of a closing Capitol Hill Z Pizza franchise, who famously warned that she had “no idea where” her employees would “find jobs, because if I’m cutting hours, I imagine everyone is across the board.”
The truth is, there are plenty of other dining options near Louisa’s old space. On the same block, you’ll find the venerable 14 Carrot Café for breakfast and lunch options and Pazzo’s for Italian lunch and dinner. I’ve eaten at, and can vouch for, both restaurants. I haven’t been to Pomodoro, the Italian restaurant across the street, but it’s got wonderful reviews on Yelp. On the next block over, you’ll find Mammoth, a fancy new-ish sandwich shop with a loyal following. None of these are chain restaurants, and many of them have been around for longer than Louisa’s. (The 14 Carrot is 40 years old this year, and Pomodoro is over two decades old.)
I’m not pointing this out to make light of Plum. It’s never easy to close a business, and Louisa’s was absolutely a neighborhood gem. But the trickle-down crowd are using Louisa’s as a symbol of failure for all of Seattle’s minimum wage increase, and that’s a painfully dumb leap to make. You’d have to be a real jackass to claim cause and effect based on a single data point — especially when that data point is from a city like Seattle, with a low unemployment rate, a high number of food service workers, and a high restaurant opening rate.
As I’ve told you time and again, the trickle-down crowd is desperate to tie minimum wage increases to economic devastation. (Why wouldn’t they, after all? If they don’t have to pay employees more, they get to keep that money for themselves.) And they’re getting more and more desperate as time passes, because reality reflects that their position is wrong. The minimum wage is increasing in 21 states in 2017 because Americans are finally realizing that when workers make more money, they’ll spend that money in their local communities.
The fact is that businesses close all the time, for a variety of reasons. Seattle’s rent is ridiculously high. People are moving here at a ridiculously fast pace. And when the next recession hits — which will likely happen sooner than later, given our incoming presidential administration — every business will have to take some cuts.
But let’s not transform our (justified) sadness over one restaurant’s closure into an irrational fear of the minimum wage. The fact is that many more Seattleites are doing better now than they were before we raised the minimum wage. In fact, given that minimum-wage employees are spending their increased paychecks, we’re doing even better than we would be if we hadn’t raised the wage. Anyone who claims otherwise is either manipulating the numbers in an unsavory way or doesn’t have a clear understanding of what’s really happening in Seattle.
It’s so predictable that it’s almost a joke: Republicans are against debt…unless there’s a Republican in the White House. Republicans are against foreign intervention…unless there’s a Republican in the White House. Republicans say they stand for state’s rights…
In its lame-duck rush to push through a controversial legislative package, the Republican-controlled Ohio Legislature made headlines by passing the “heartbeat bill,” an oppressive—and likely unconstitutional—anti-abortion measure that, if signed by Republican Governor John Kasich, would be the most restrictive law in the country. But there was another harsh measure in the mix that flew under the radar: a measure that would force Ohio localities to comply with state minimum-wage regulations that top out at $8.10 an hour.
That minimum-wage measure is, of course, a giant middle finger to Cleveland workers’ attempts to get a $12 minimum wage on the ballot next year, and I think it’s a warning sign for all of us. Because the Fight for $15 has made such terrific strides in cities and states around the country—even in bright red states—it seems likely that Republicans at the state and federal level could very likely try to crack down on regional minimum wages in the year to come. Miller lists several recent attempts by state officials to preempt municipal attempts to ban plastic bags or provide paid sick leave, and it’s not hard to imagine a Republican Congress doing the same on a national level.
Please bear in mind that this is speculation. And also bear in mind that it’s easier said than done: any politician will tell you that it’s about ten thousand times easier to stop something from becoming law than it is to take a right or privilege away from someone. Try to take a minimum wage away from workers and you’ll see workers in the streets with signs and bullhorns in a hot second.
But progressives have seen such success in the years since 2000 on a local level—same-sex marriage, secure scheduling laws, minimum wage increases, gun responsibility—that conservatives will very likely try to do something to halt the progress. And now, with Republicans in control of the White House, Congress, and most state governments, we’re likely to see some attempts to hamper state and city rights to legislate themselves. Again, I don’t have any special knowledge of a sinister plot. It’s just common sense combined with a working knowledge of recent American political patterns.
Ohio looks like the first attempt to shut down progress before it happens. So it’s very likely to me that the next four years will see progressives become the state’s rights advocates, while Republicans argue for the importance of a strong central government. Protecting our right to improve our states and cities could very well be a major topic in the year ahead, and as we hunker down for the holidays and plan for 2017, we should think about the ways we can keep what’s ours and create a path for progress in our neighborhoods and counties.
Four years ago this week, fast food workers in New York City took to the streets to demand a $15-an-hour minimum wage. A little over three years ago, the city of SeaTac approved a $15 minimum wage for workers serving Seattle-Tacoma International Airport. And in the intervening years, cities across the country (including Seattle, San Francisco, Washington D.C., and New York City and states including California, Oregon, and Arizona) have approved minimum wage increases that will put them well above the federal minimum of $7.50 per hour.
None of that is new to you. It’s fact. It’s history. But we can’t afford to let these substantial victories become something that we take for granted. The truth is, it’s already difficult to remember now how far-fetched the Fight for $15 seemed at the time, but literally every part of the political establishment was dead set against it: business owners, newspaper editorial boards, and elected leaders on the right and the left.
This was an unprecedented endorsement in the history of the Times, a watershed moment for minimum wage advocates, and it turned out to be a significant precursor to a historic moment, too. On election day this year, four states voted to raise their own minimum wage. Some might consider the blue states of Washington ($13.50) and Colorado ($12) to be easy wins, but Maine, which split its electoral votes between Hillary Clinton and Donald Trump, and Arizona, which leaned ruby red in the presidential election, both voted for $12 minimum wages, too.
What started as a fringe movement that was mocked by the establishment has become a foregone conclusion — the National Restaurant Association used to send armies of anti-wage representatives to cities that were considering raising the wage, but now they only put up token resistance, if they bother to show up at all. Perhaps more importantly for our fractured nation, it’s a rare issue that inspires bipartisan support (that is, bipartisan support from average people, not from elected officials — an important distinction that I’ll go into later.) And so in this way, $15 has to be considered a model for progressives who are preparing for the next four years.
So, how did it all come together?
It started with a diverse coalition. Labor leaders (including SEIU 775 President David Rolf, author of The Fight for $15: The Right Wage for a Working America) and business leaders (including Civic Ventures founder — and my boss — Nick Hanauer) formulated a new theory of economics based on years of reading and theory and practice, built on policies promoted by thinkers and leaders including former Secretary of Labor Robert Reich. You can get a good sense of the thinking that provided the foundation for the Fight for $15 in this Bloomberg piece from 2013 by Hanauer.
Then the coalition needed to show that they had the will to change a political climate. This is where the fast food workers’ strike came in. At the time, blog commenters and politically moderate columnists everywhere were mocking the workers for demanding a higher wage. But what the naysayers didn’t understand was that even as they mocked the protests, they were giving the workers a microphone, and the workers’ stories inspired thousands of people to take action on their behalf.
Progressive leaders have learned that stories are the best mechanism for inspiring political change in individuals. It worked with same-sex marriage — it’s easy to demonize a group you don’t know and very hard to take away rights from a human with a face and a story — and it worked with the Fight for $15. Once ordinary Americans saw that these fast food workers weren’t the imaginary system-leeching “welfare queens” that conservatives like to bray over, or pimply teenagers looking to buy a new sound system for their hand-me-down car, they understood the importance of raising the wage.
Those stories are essential, but the implementation wouldn’t happen without solid thinking behind it. If you were to look back at older Democratic calls to raise the minimum wage, you’d see a lot of talk about “fairness,” about “spreading the wealth.” And it is true that raising the minimum wage is fair and it does spread the wealth. But more importantly, research indicated that increasing the minimum wage was good for business owners and everyone else, that it was one of the fastest and most significant methods to reduce the widening inequality that all Americans could feel encroaching into their lives. Watch this ad from Maine’s successful initiative to raise the wage to see what that message looks like in action:
Though most Americans favor a significant increase, conservative politicians don’t seem to be budging on the minimum wage. The only two Republican presidential candidates who endorsed an increase in the minimum wage this year were Rick Santorum and Donald Trump. (Although Trump has also made statements against raising the minimum wage and even statements that America’s wages are too high at the present level, so what he truly believes is anyone’s guess.)
It’s pretty easy to figure out why conservatives are opposed to $15: the corporate interests and bankers who fund their campaigns don’t want to pay higher wages for workers.
But as we’ve proven again and again, politicians will eventually go where the people lead. The success of the minimum-wage movement is its inclusiveness: you can’t just pass good legislation with protesters, or just with policymakers, or just with legislators. You need everyone — business owners, workers, activists — to come together, set clear goals, and bring those goals into reality. When more people are involved in political action, guess what? That political action is more likely to serve everyone’s goals.
In the years since we raised the minimum wage in Seattle, we’ve followed that model and seen great successes. We passed a secure scheduling lawwhich protects workers from predatory scheduling practices. Our statewide minimum wage initiative also included a provision for paid sick leave so that workers don’t have to work when they’re ill. Step by step, we’re restoring the rights that made it possible for citizens to enjoy the secure middle-class lives that made America so prosperous in the 20th century.
There’s much to do. America’s middle class needs a raise through increased overtime protections. Parasitic employers continue to make employment a government-subsidized race to the bottom in too many areas around the country. The stratospheric increase in gig economy employment demands bold new thinking in terms of the benefits contract. But now that the Fight for $15 has seen such resounding success, none of these tasks seem impossible anymore. We know how to do this. We’ve got the blueprint, and our successes in red states assure us that not even Donald Trump and his band of cronies can stop our momentum. Now is the time to stick together—all of us—and keep working.
Question: what does Fidel Castro’s death have to do with the minimum wage?
Well, if you’re a normal human being, the correct answer is “nothing.”
But if you’re an economist named Bryan Caplan, the correct answer…well, it’s still “nothing.” But Bryan Caplan will apparently stop at nothing to advance his anti-minimum-wage agenda. As proof, here’s a post he published today on EconLog. It’s titled “How Castro is Like the Minimum Wage,” which is maybe the clickbaitiest headline I’ve ever clicked on.
So how is Fidel Castro like the minimum wage? Caplan says it’s because Castro was “mild” so far as dictators go but it was morally correct for America to fight him as “a symbol of larger evils.” The same is true of the minimum wage, apparently: Caplan says the minimum wage is “something we must stubbornly decry even though there are far greater ills in the world.” Then he quotes from his own blog post from waaaaaaaay back in 2013:
The minimum wage is far from the most harmful regulation on the books. Why then do I make such a big deal about it? Because it is a symbol of larger evils.
From the standpoint of public policy, the minimum wage is a symbol of the view that “feel-good” policies are viable solutions to social ills: “Workers aren’t paid enough? Pass a law so employers have to pay them more. Problem solved.”…
We need to get rid of the minimum wage. But that’s only a first step. Our ultimate goal should be to get rid of the errors that the minimum wage has come to represent.
Ugh. Caplan’s views apparently hadn’t changed at all in the almost four years since first publishing that post, and that’s more than a little weird, considering how much new evidence we’ve seen in the intervening years.
Caplan constructs a hell of a straw man in that passage, and that straw man doesn’t at all represent the reality behind raising the wage. Seattle didn’t go to $15, and Washington state didn’t go to $13.50, because it felt good. We raised the wage because we understand that when more people have more money, we all do better. The minimum wage empowers workers as consumers, and the money they spend circulates throughout the local economy. It’s not about charity, it’s about increasing the customer base and promoting growth for everyone.
When businesses keep their minimum wages artificially low, their employees are basically frozen outside the economy—all they can afford is housing and transportation, if they’re lucky. They’re not able to spend money on goods and services. This is how we wound up with an economy in which low-wage employers are subsidized by government safety-net programs. Funny, isn’t it, that Caplan seems to be rejecting Castro by endorsing an economic system where the government provides food, clothing and shelter to workers?
And further, Caplan admits that the minimum wage is, in his view, a minor issue. A growing body of evidence seems to indicate that raising the minimum wage does not harm an economy—in fact, quite the opposite. High-wage cities and states are thriving while low-wage states like Kansas and Louisiana are suffering. So if Caplan admits that he doesn’t care about the minimum wage that much, why wouldn’t he support a system through which more people broadly do better? To make a point? It’s just like an economist to forget that the numbers they’re arguing over actually describe reality for human beings, but it takes a special kind of human to use a non-related news item to refresh an ancient blog post on a pet issue. Congratulations, Bryan Caplan! You’ve maybe written the dumbest Castro think-piece of the week, which is no mean feat.