A warning sign for Democrats attempting the Full Bernie
Hey, Democrats: You really should be petrified of that minimum wage study
How goes the Trump-GOP agenda? Well, pick your meme. "This is fine" certainly works. And you probably can't go wrong with "dumpster fire."
Hardly too harsh an assessment. The two biggest Republican policy priorities, repealing ObamaCare and cutting taxes, seem moribund. And it's not just Democrats and "fake news" media saying this. The IMF has trimmed its forecast of U.S. economic growth because of Washington gridlock, while Goldman Sachs is now telling its clients that "enactment of broad health legislation ... seems unlikely."
But Trumpublican failures and unpopularity may not be enough to bring Democrats back to power. One takeaway from Democrat Jon Ossoff's narrow loss in the Georgia special election is that the party lacks an attractive, substantive agenda that can excite voters. Hillary Clinton offered myriad policy ideas during her campaign, none even the least bit memorable. Trump, on the other hand, was talking massive tax cuts, eliminating trade deficits, and building a megawall on the U.S.-Mexico border. Although wonks across the political spectrum rolled their eyes, the big and bold proposals made Trump look like a man of action to many ordinary Americans.
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So, naturally, many Democrats — especially progressives — think they need to go big and bold, as well. Free college! Single payer! The Full Bernie!
But that might not be so easy, at least if Democrats care whether their big and bold policies make sense. They are, after all, the self-described party of science, unlike those supposedly dopey Republicans with their Laffer Curve and climate change denial.
Take the idea of raising the national minimum wage to $15. Not only do lefties like Sanders and Elizabeth Warren support the Fight for 15, but the provision is now part of the official Democratic Party platform. Indeed, doubling the national minimum wage may be the central Democratic idea for boosting wages and reducing income inequality.
Yet the economic case for a $15 minimum wage is weak. For instance: Seattle raised its minimum wage to $11 an hour from $9.47 in 2015, and then to $13 in 2016. And that second step may have been a step too far, according to new University of Washington research. The study found the increase led to steep declines in employment for low-wage workers, and fewer hours for those with jobs. So while wages went up, workers were worse off, overall.
From the study: "Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees' earnings by an average of $125 per month in 2016. "
Now this was a raise to $13 in a high-cost city. But some Democrats like Sanders would raise the minimum to $15 everywhere. It's certainly reasonable to expect even more severe anti-employment effects from a hike that high. Indeed, plenty of left-leaning economists have warned against the Fight for 15. As former top Obama White House economist Alan Krueger has said: "Although the plight of low-wage workers is a national tragedy, the push for a nationwide $15 minimum wage strikes me as a risk not worth taking."
So will Democrats abandon the Fight for 15 and instead focus on lower-risk policies such as expanding the Earned Income Tax Credit? Or will they try to ignore the risks? The latter is what the city of Seattle did. When officials got word of the UW study, according to Seattle Weekly, they tipped results to University of California, Berkeley, researchers who preempted UW with their own study supporting the higher minimum wage. None of this controversy seemed to bother Seattle's mayor, who unequivocally called the city's higher minimum wage "the smart thing to do."
And what of the left's other "big think" ideas? Well, some are for breaking up Big Tech, whose success is perhaps the one bright spot in the U.S. economy and whose products Americans love. Then there's the universal basic income, unappealing to working-class Americans who want good jobs, not government checks. Or how about free college, great for the upper-middle class, less so for everyone else? Finally, there's Medicare for All, which seems far more a slogan than a serious, workable plan.
No wonder it appeals to Trump so much.
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James Pethokoukis is the DeWitt Wallace Fellow at the American Enterprise Institute where he runs the AEIdeas blog. He has also written for The New York Times, National Review, Commentary, The Weekly Standard, and other places.
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