Economic Theory

So, when Bernie is President and directs the states to raise the minimum wage for the unskilled work force of the United States how exactly will that work?  Will he, as the Chief Socialist, mandate the increase through executive order, forcing the states to bend to his will, will he use his populist appeal to persuade the many states to institute social change, or will he persuade the Congress to implement a new national standard?  Regardless of the route, what will be the wonderful social benefit?

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Will the number of jobs increase?  Will the overall prosperity of the middle class increase?  Will outsourcing of US manufacturing, returning to our country all those jobs we have sent to the impoverished third world countries end?  Will there be a trickle up windfall, where skilled middle class workers will see proportional wage increases?  Will the poor suddenly collectively rise out of poverty and shed the burden of being poor?  Will the nation embrace the benefits of paying more for day to day commodities like food, energy, transportation, and taxes to reverse the number one threat to national security – and green up America by eliminating our carbon foot print through the more expensive green energy sources?

Forgive me but I am at a loss at how this will do anything more than make Mr. Sanders and his supporters feel good, and briefly provide disposable income from those who have demonstrated an inability look beyond today and progress beyond the poverty level.  Experience with minimum wage legislation shows it provides only a short-term benefit and does nothing to actually improve the quality of life for those who work the jobs that earn only minimum wage.  It will in all likelihood make the overall cost of living go up for both the poor and the middle class.  The rich?  Well they don’t spend most of their money on disposable purchases anyway so they’ll be okay.

I can remember when the Republican candidate for President, was roundly condemned by the left for his “trickle down” theory of wealth creation.  At the time I placed as much credence in candidate Reagan as I do in candidate Sanders.  The difference is Reagan promised to make government smaller.  He broke that promise but did win the cold war without firing a shot.  My fear with candidate Sanders is he promises to make government bigger, that is a pretty easy promise to keep and I’m afraid he will suceed. 

Yet here we are now some 30 years later with the traditional arguments of socialism versus capitalism as if the involvement of the government is somehow not at fault for the the income disparity.  According to the Democrats, and their enlightened spokespeople, it is a single parties fault.  I am sorry, but simple observation proves otherwise.  Each time our government involves itself in social engineering and economic “fine tuning” we see a shift towards greater economic disparity.  It really doesn’t matter if it is the Congress’s fault through legislation, a result Presidential fiat, or the Federal Reserve’s regulation.  It doesn’t matter if the motivation comes from capitalist or socialist influence, in the end the results are the same.  The poor become more dependent on social welfare, the rich find ways to shelter their wealth, and the middle class is caught between the two.

Wouldn’t it be far better to focus on eliminating wage disparity within the specific social groups.  For example, should a tenured university professor have a better life than an inner city kindergarten teacher challenged to instill the fundamentals of language, math and science to children who’ve never see the printed word, or come from a single parent home with no resources?  Who, ultimately, will have the greater influence on our next generation?  Both have college degrees, both have families, both have obligations and expectations yet one earns between $30,000 and (if lucky $60,000) while the other may bring in over $200,000.  This fact alone is one of the reasons college education has become so expensive.  If as Senator Sanders suggests, we are to have free college then the only way to accomplish that is to pay college professors and administers a “living wage” of $15.00 an hour.  I wonder what kind of education system that would provide?