Sen. Bernie Sanders (I-VT) has declared that doubling the federal minimum wage to $15 per hour is “morally imperative.”
In an interview with The Guardian, Sanders said, “This country faces an enormous economic crisis that is aggravated by the pandemic. We’re looking at terrible levels of unemployment. We’re looking at growing income and wealth inequality. What concerns me as much as anything is that half our people are living paycheck to paycheck. Millions of people are trying to survive on starvation wages. For me, it’s morally imperative that we raise the minimum wage to a living wage that’s at least $15 an hour.”
Bernie is somewhat correct in his economic observation. The U.S. economy is in poor shape due to the coronavirus pandemic. Millions of Americans are struggling to make ends meet. However, doubling the federal minimum wage would make matters worse for most of these workers.
According to several studies, including a just-released report by the National Bureau of Economic Research (NBER), raising the national minimum wage to $15 leads to “adverse employment effects.” In other words, an arbitrary $15 minimum wage will lead to less $15 minimum wage jobs. The NBER study also shows that a $15 minimum wage will have a particularly negative impact on teens and low-skill wage workers.
It is commonsense, actually. If the federal government forces employers to dramatically raise wages, employers will reduce the number of workers, reduce workers’ hours, and/or raise the prices of goods and services to cover their newfound labor costs.
Yet, this does not resonate with Bernie. According to Bernie, economic decisions occur in a vacuum. In Bernie’s world, if you raise the minimum wage, there are no unintended consequences.
And given Bernie’s framing of the minimum wage debate in moral (not logical) terms, one can see how he would overlook the real-world consequences of his preferred outcome. Bernie and those who believe that arbitrarily raising the minimum wage will result in instant prosperity for the vast majority of low-wage workers are not in tune with reality. They live in a fantasy of their own creation, wherein the national government can raise the minimum wage and millions will be uplifted from poverty. Sorry, that is not how it works. It is never that easy.