Tag Archives: Minimum Wage

How a small, poor country became the top economy in Latin America

South America Map
South America Map

One way to learn about whether specific economic policies work or not is to look at different countries that have tried them. Believe it or not, patterns do emerge about what works and what doesn’t work, as you look across different times and places. I’ve been reading a book called “Money, Greed and God” with my friend Carla, which talks about what has worked to reduce poverty.

The author basically outlined two approaches. In the first approach, the government 1) confiscates the wealth of the most productive workers, 2) nationalizes (takes control of) the businesses of the most successful entrepreneurs, 3) restricts trading between citizens and with other countries, with minimum wage, price controls and tariffs. In the second approach, the government does the opposite: 1) lowers taxes on the most productive workers, and 2) lets entrepreneurs compete to provide goods and services to consumers, and 3) lowers restrictions on internal trading and trading with other countries, e.g. – eliminating minimum wage, tariffs and price controls.

Let’s take a look at two Latin American countries that went in opposite directions. Venezuela and Chile. Then we can finally find out which policies actually achieve results for the people.

Here is how Chile started out in 1973.

PROBLEM: Price controls and tariffs:

Prices for the majority of basic goods were fixed by the government in 1973. Even though Chile was and still is a small economy, the level of protection­ism was high. By the end of 1973, the nominal average tariff for imports was 105 percent, with a maximum of 750 percent. Non-tariff barriers also impeded the import of more than 3,000 out of 5,125 registered goods. Just as economic theory predicts, large queues in front of stores were usual in Santiago and other cities in Chile as a result of the scarcity caused by price controls.

PROBLEM: Government taking over private businesses:

The decline in GDP during 1973 reflected a shrinking productive sector in which the main assets were gradually falling under government control or ownership through expropriations and other government interventions in the economy.

PROBLEM: Deficit spending and government printing money:

The fiscal situation was chaotic. The deficit reached 55 percent of expenditures and 20 percent of GDP and was the main cause of inflation because the Central Bank was issuing money to finance the government deficit.

SOLUTION: lower or eliminate restrictions on trade:

The most important economic reform in Chile was to open trade, primarily through a flat, low tar­iff on imports. Much of the credit for Chilean eco­nomic reforms in the following 30 years should be given to the decision to open our economy to the rest of the world. The strength of Chilean firms, productive sectors, and institutions grew up thanks to that fundamental change.

SOLUTION: let competing entrepreneurs in the private sector provide goods and services to consumers:

A second fundamental reform was to allow the private sector to recover, adding dynamism to the economy. In fact, important sectors such as elec­tricity generation and distribution and telecommu­nications were still managed by state companies. After we implemented a massive privatization plan that included more than 50,000 new direct share­holders and several million indirect (through pen­sion funds) shareholders, these companies were managed by private entrepreneurs that carried out important expansion plans.

SOLUTION: let people take responsibility for their own lives instead of depending on government:

The 1981 reform of the Chilean pension fund system deserves special mention. Under the leader­ship of Minister José Piñera, an individual capitali­zation account program was designed with specific contributions, administered by private institutions selected by the workers. The Chilean Administra­doras de Fondos de Pension (Pension Fund Administrators or AFP) has been replicated in more than 20 countries, and more than 100 million workers in different parts of the world use these accounts to save for retirement.

SOLUTION: allow parents to choose the school that fits their needs from competing education providers, and push school administration down from the federal government to the municipal level, where it would be more responsive to voter’s needs:

In 1981, Chile introduced a universal educational voucher system for students in both its elementary and secondary schools. At the same time, the central government transferred the administration of public schools to municipal governments…  The financial value of the voucher did not depend on family income.

RESULTS: And I was able to find a nice short, description of how all that worked out for them on the far-left Wikipedia, of all places:

The economy of Chile is a high-income economy as ranked by the World Bank, and is considered one of South America’s most stable and prosperous nations, leading Latin American nations in competitiveness, income per capita, globalization, economic freedom, and low perception of corruption.

In 2006, Chile became the country with the highest nominal GDP per capita in Latin America. In May 2010 Chile became the first South American country to join the OECD. Tax revenues, all together 20.2% of GDP in 2013, were the second lowest among the 34 OECD countries, and the lowest in 2010. In 2017, only 0.7% of the population lived on less than US$1.90 a day.

According to the Heritage Foundation, Chile is ranked as the 18th freest economy in the world. The World Bank ranked Chile as the 50th highest GDP per capita for 2018, just below Hungary and above Poland.

Now, you can contrast those results with Venezuela. I have been blogging about Venezuela for years on this blog, and documenting how they raised taxes, banned guns, nationalized private sector companies, raised tariffs, and increased regulations. They are now ranked JUST ABOVE NORTH KOREA for economic freedom – #179 out of 180 countries measured. Basically, they did the opposite of everything that Chile did – transferring power away from parents, workers, business owners, churches and municipal governments to the powerful centralized federal government.

Wikipedia explains how Hugo Chavez took over in 1999 and enacted a communist revolution.

More:

Since the Bolivarian Revolution half-dismantled its PDVSA oil giant corporation in 2002 by firing most of its 20,000-strong dissident professional human capital and imposed stringent currency controls in 2003 in an attempt to prevent capital flight, there has been a steady decline in oil production and exports. Further yet, price controls, expropriation of numerous farmlands and various industries, among other government authoritarian policies… have resulted in severe shortages in Venezuela and steep price rises of all common goods, including food, water, household products, spare parts, tools and medical supplies; forcing many manufacturers to either cut production or close down, with many ultimately abandoning the country as has been the case with several technological firms and most automobile makers.

They confiscated private property, took over private sector businesses, implemented tariffs and price controls, redistributed wealth via massive welfare programs, and pushed all decision-making out of families and municipal governments up to the federal government. By depriving the producers of their earnings, the country caused massive shortages of goods and services, to the point where people are fleeing the country, consuming zoo animals, and selling their bodies as prostitutes in order to get food and water.

Application

In the next election, we are not picking a tribe because of how they make us feel about ourselves. We are not choosing in order to see ourselves as “nice” and “not nice”. We need to look at specific policies being proposed, and see what works and what doesn’t work. The examples of Chile (rags-to-riches) and Venezuela (riches-to-rags) are helpful for voters who want to get RESULTS instead of FEELINGS.

I’ll leave you with a list of links from previous posts so you can see how communism worked out for Venezuela.

Related posts

How a small third world country became the top economy in Latin America

South America Map
South America Map

So, I’ve been watching the Democrat debates, and I’ve noticed that all of their candidates are proposing economic policies that they say will improve the lives of Americans. But have the candidates ever been able to try out these policies, and proven that they work? One way to evaluate policies is to look at other countries that have tried them, to see if those policies are proven to work.

I’ve been reading a book called “Money, Greed and God” with my friend Carla, which talks about what does and does not work to alleviate poverty. The author basically outlined two approaches. In the first approach, the government 1) confiscates the wealth of the most productive workers, 2) nationalizes (takes control of) the businesses of the most successful entrepreneurs, 3) restricts trading between citizens and with other countries, with minimum wage, price controls and tariffs. In the second approach, the government does the opposite: 1) lowers taxes on the most productive workers, and 2) lets entrepreneurs compete to provide goods and services to consumers, and 3) lowers restrictions on internal trading and trading with other countries, e.g. – eliminating minimum wage, tariffs and price controls.

Let’s take a look at two Latin American countries that went in opposite directions. Venezuela and Chile. Then we can finally find out which policies actually achieve results for the people.

Here is how Chile started out in 1973.

PROBLEM: Price controls and tariffs:

Prices for the majority of basic goods were fixed by the government in 1973. Even though Chile was and still is a small economy, the level of protection­ism was high. By the end of 1973, the nominal average tariff for imports was 105 percent, with a maximum of 750 percent. Non-tariff barriers also impeded the import of more than 3,000 out of 5,125 registered goods. Just as economic theory predicts, large queues in front of stores were usual in Santiago and other cities in Chile as a result of the scarcity caused by price controls.

PROBLEM: Government taking over private businesses:

The decline in GDP during 1973 reflected a shrinking productive sector in which the main assets were gradually falling under government control or ownership through expropriations and other government interventions in the economy.

PROBLEM: Deficit spending and government printing money:

The fiscal situation was chaotic. The deficit reached 55 percent of expenditures and 20 percent of GDP and was the main cause of inflation because the Central Bank was issuing money to finance the government deficit.

SOLUTION: lower or eliminate restrictions on trade:

The most important economic reform in Chile was to open trade, primarily through a flat, low tar­iff on imports. Much of the credit for Chilean eco­nomic reforms in the following 30 years should be given to the decision to open our economy to the rest of the world. The strength of Chilean firms, productive sectors, and institutions grew up thanks to that fundamental change.

SOLUTION: let competing entrepreneurs in the private sector provide goods and services to consumers:

A second fundamental reform was to allow the private sector to recover, adding dynamism to the economy. In fact, important sectors such as elec­tricity generation and distribution and telecommu­nications were still managed by state companies. After we implemented a massive privatization plan that included more than 50,000 new direct share­holders and several million indirect (through pen­sion funds) shareholders, these companies were managed by private entrepreneurs that carried out important expansion plans.

SOLUTION: let people take responsibility for their own lives instead of depending on government:

The 1981 reform of the Chilean pension fund system deserves special mention. Under the leader­ship of Minister José Piñera, an individual capitali­zation account program was designed with specific contributions, administered by private institutions selected by the workers. The Chilean Administra­doras de Fondos de Pension (Pension Fund Administrators or AFP) has been replicated in more than 20 countries, and more than 100 million workers in different parts of the world use these accounts to save for retirement.

SOLUTION: allow parents to choose the school that fits their needs from competing education providers, and push school administration down from the federal government to the municipal level, where it would be more responsive to voter’s needs:

In 1981, Chile introduced a universal educational voucher system for students in both its elementary and secondary schools. At the same time, the central government transferred the administration of public schools to municipal governments…  The financial value of the voucher did not depend on family income.

RESULTS: And I was able to find a nice short, description of how all that worked out for them on the far-left Wikipedia, of all places:

The economy of Chile is a high-income economy as ranked by the World Bank, and is considered one of South America’s most stable and prosperous nations, leading Latin American nations in competitiveness, income per capita, globalization, economic freedom, and low perception of corruption.

In 2006, Chile became the country with the highest nominal GDP per capita in Latin America. In May 2010 Chile became the first South American country to join the OECD. Tax revenues, all together 20.2% of GDP in 2013, were the second lowest among the 34 OECD countries, and the lowest in 2010. In 2017, only 0.7% of the population lived on less than US$1.90 a day.

According to the Heritage Foundation, Chile is ranked as the 18th freest economy in the world. The World Bank ranked Chile as the 50th highest GDP per capita for 2018, just below Hungary and above Poland.

Now, you can contrast those results with Venezuela. I have been blogging about Venezuela for years on this blog, and documenting how they raised taxes, banned guns, nationalized private sector companies, raised tariffs, and increased regulations. They are now ranked JUST ABOVE NORTH KOREA for economic freedom – #179 out of 180 countries measured. Basically, they did the opposite of everything that Chile did – transferring power away from parents, workers, business owners, churches and municipal governments to the powerful centralized federal government.

Wikipedia explains how Hugo Chavez took over in 1999 and enacted a communist revolution.

More:

Since the Bolivarian Revolution half-dismantled its PDVSA oil giant corporation in 2002 by firing most of its 20,000-strong dissident professional human capital and imposed stringent currency controls in 2003 in an attempt to prevent capital flight, there has been a steady decline in oil production and exports. Further yet, price controls, expropriation of numerous farmlands and various industries, among other government authoritarian policies… have resulted in severe shortages in Venezuela and steep price rises of all common goods, including food, water, household products, spare parts, tools and medical supplies; forcing many manufacturers to either cut production or close down, with many ultimately abandoning the country as has been the case with several technological firms and most automobile makers.

They confiscated private property, took over private sector businesses, implemented tariffs and price controls, redistributed wealth via massive welfare programs, and pushed all decision-making out of families and municipal governments up to the federal government. By depriving the producers of their earnings, the country caused massive shortages of goods and services, to the point where people are fleeing the country, consuming zoo animals, and selling their bodies as prostitutes in order to get food and water.

Application

In the next election, we are not picking a tribe because of how they make us feel about ourselves. We are not choosing in order to see ourselves as “nice” and “not nice”. We need to look at specific policies being proposed, and see what works and what doesn’t work. The examples of Chile (rags-to-riches) and Venezuela (riches-to-rags) are helpful for voters who want to get RESULTS instead of FEELINGS.

I’ll leave you with a list of links from previous posts so you can see how communism worked out for Venezuela.

Related posts

 

Voting rights for terrorists and rapists, death penalty for unborn babies up to 9 months

Boston Marathon terrorist about to place bomb behind 8-year-old child

Wow. It seems to me that the Democrats had a pretty good chance of competing against Trump in the 2020 election, with their presumed nominee, Bernie Sanders. He’s wildly popular with young people. He’s raising tons of money from rich progressives. All Bernie has to do is just not say anything crazy, and he’ll be competitive. Unfortunately, he can’t control himself.

Here’s a report from the radically-leftist Boston Herald:

U.S. Sen. Bernie Sanders says the right to vote should extend to those in jail — even the Boston Marathon bomber.

“If somebody commits a serious crime — sexual assault, murder — they’re going to be punished,” Sanders said in his CNN town hall talk Monday night. But, “I think the right to vote is inherent to our democracy. Yes, even for terrible people.”

The majority of convicted criminals would vote Democrat if they could, because Democrats are less strict on crime than Republicans. Democrats are always looking to allow more people who will vote Democrat to vote. They want to lower the voting age, because young people who don’t pay taxes naturally vote for free stuff. And they also want to import low-skilled immigrants and put them on a path to citizenship. Low-skilled immigrants pay less into the system than they use in education, health care, etc. They also vote Democrat.

Medicare for All

Bernie also has a long list of big spending programs, because he thinks that $22 trillion in debt and trillion dollar deficits is no big deal. But the truth is, we’re already out of money for the big social welfare programs that Democrats already passed. We certainly don’t have money for any new ones.

Far-left CBS News explains:

Social Security is on a path to become insolvent in 2035, with only enough money cover about 80 percent of its obligations.

Medicare would become insolvent even sooner, by 2026, if no changes are made to payroll taxes or how health providers are paid.

[…][M]any Democratic presidential candidates are calling for expanding Medicare benefits — even proposing “Medicare for All” — rather than addressing the program’s worsening finances.

How will Democrats pay for MORE spending when we can’t pay for the spending we already have? Tax increases won’t be enough, so they’ll have to nationalize private 401K retirement plans like other socialist nations have.

And what about Medicare for All? Well, they can just seize the money that’s being used to buy private health insurance now, and put everyone into a government-run single payer system. That’s what happens in Canada right now. People who pay taxes pay for the all the costs, but they still have to get in line behind those who don’t pay anything in taxes. The average cost (to middle-class taxpayers) is about $11,000 per year. That’s a lot more than people pay for private health insurance which delivers higher quality care. But the costs are higher for less quality, because the people who pay into the system are covering the people who don’t pay.

And remember, abortion through all nine months of pregnancy is taxpayer-funded in Canada’s single payer system. Pro-life taxpayers subsidize abortions. If you don’t like it, you can leave the country.

Infanticide

All of the Democrat presidential candidates support infanticide, according to this article from The Stream:

 On February 25, 44 Democrat senators, including all 6 declared presidential candidates, voted against the Born Alive Protection Act. Put another way, they voted for infanticide.

New candidate Pete Buttigieg is also in favor of infanticide: abortion through all nine months of pregnancy.

If you’re voting for a Democrat in 2020, then you’re going to get infanticide if they win. No use complaining later that you’re pro-life if you support the killing of viable unborn children who survive botched abortions.

Raising the minimum wage

Another policy supported by many Democrats is raising federal minimum wage rates.

Let’s take a look at a study reported  in the Daily Caller:

California’s minimum wage increase has cost the state thousands of jobs worth of growth in the state’s booming restaurant industry, according to a recent study by the University of California Riverside.

California passed a bill in 2016 to bring the state’s minimum wage up to $15 an hour. For businesses with more than 25 employees, the state’s minimum wage rose to $12 in January and will hit $15 in January of 2022. Other businesses have until 2023 before the full $15-an-hour minimum takes effect.

[…]Researchers also found that the minimum wage slowed growth more in low-income areas.

[…]Researchers estimate that the minimum wage increases will cost the state roughly 30,000 jobs from 2017 to 2022.

If you force businesses to pay workers more, them employers are left with no choice but to lay off workers, or cut hours.

Minimum wage jobs are entry level jobs. They’re not meant to allow people to buy a house, have children, or travel the world on private jets. People get them in order to get something on their resumes so that they can move up to more challenging jobs that pay more. If a person doesn’t want to move up to a more challenging job that pays more, then they shouldn’t be complaining that they can’t make the same life choices as software engineers, nurses and electricians. Jobs don’t all pay the same, because some are harder than others.

If voters chose candidates based on whether their policies would actually work to prevent poverty, they would never vote for Democrats. But so many people in America don’t vote based on what results policies will achieve. They vote in order to feel something about themselves. Transferring wealth from “rich” employers to “poor” minimum wage workers feels good. So they vote for it. And when those workers are laid off, they don’t care because they’ve already stopped paying attention.

Will raising the minimum wage cause job creators to lay off employees?

Basic economics: when you raise the price of something, people buy less of it
Basic economics: if you raise the price, then people will buy less of it

Right now, all the candidates for President from the Democrat party are competing with one another to see who can buy the most votes using taxpayer money. One popular Democrat policy to buy votes is to raise the minimum wage. Democrats reason that minimum wage increases are great, because workers will have more money to buy stuff. What could go wrong?

Well, I want to talk about this policy from a theoretical point of view, then give an example of how it works in practice.

Abstract from a National Bureau of Economic Research study:

We estimate the minimum wage’s effects on low-skilled workers’ employment and income trajectories. Our approach exploits two dimensions of the data we analyze. First, we compare workers in states that were bound by recent increases in the federal minimum wage to workers in states that were not. Second, we use 12 months of baseline data to divide low-skilled workers into a “target” group, whose baseline wage rates were directly affected, and a “within-state control” group with slightly higher baseline wage rates. Over three subsequent years, we find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers.

[…]Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point.

That comes out to 1.4 million workers who lost their jobs, thanks to minimum wage mandates.

Why does it hurt young and unskilled workers most? Because those workers don’t produce as much as older, more experienced workers. So, if all the salaries go up, employers keep the most experienced employees and lay off the youngest, and least experienced employees. This is why the youth unemployment rates of socialist countries in Europe are so much higher than the overall unemployment rate. And just to be clear, minorities are disproportionately harmed by minimum wage laws, since they are the ones who are often trying to move up through those entry-level jobs.

Here’s an example of how this works in reality, from San Francisco, a Democrat-run city.

ABC News reports:

San Francisco’s minimum wage is currently $11.05 an hour. By July of 2018, the minimum wage in San Francisco will be $15 an hour. That increase is forcing Borderlands Bookstore to write its last chapter now.

[…]Borderlands was turning a small profit, about $3,000 last year. Then voters approved a hike in the minimum wage, a gradual rise from $10.75 up to $15 an hour.

“And by 2018 we’ll be losing about $25,000 a year,” he said.

It’s an unexpected plot twist for loyal customers.

“You know, I voted for the measure as well, the minimum wage measure,” customer Edward Vallecillo said. “It’s not something that I thought would affect certain specific small businesses. I feel sad.”

That was in 2018, but strangely enough, Democrat voters haven’t learned their lesson. They still think you can vote people more money, and not ask where the money is coming from.

Shawn sent me this story about Seattle, another Democrat-run city.

Excerpt:

Restaurants Unlimited, a Seattle-based chain with restaurant locations in 47 US cities, announced on Sunday it was seeking Chapter 11 protection, citing “progressive” wage laws.

The company, which has operated since the Lyndon Johnson Administration, said rising labor costs—part of a national trend of government-mandated minimum increases—were part of its decision.

“Over the past three years, the company’s profitability has been significantly impacted by progressive wage laws along the Pacific coast that have increased the minimum wage,” Chief Restructuring Officer David Bagley said in court filings, The Seattle Times reports. “As a large employer in the Seattle metro market, for instance, the company was one of the first in the market to be forced to institute wage hikes.”

[…]BLS data show that New York City experienced its sharpest decline in restaurant jobs since 9/11 following its passage of a $15 minimum wage law. In California, a local newspaper recently detailed how an entire business district virtually disappeared following the city’s aggressive minimum wage push.

Restaurants Unlimited’s announcement came a day before the Congressional Budget Office released a report estimating that a House bill designed to raise the federal minimum wage to $15 an hour would cost 1.3 million jobs.

Now, you might say to me “But Wintery, Democrats are the party of the little guy, why would they vote for something that would leave workers unemployed?” And there are two answers to that. First, Americans who work for a living tend to not look to the government for support. Second, Americans who work for a living tend to dislike when their taxes are raised to pay for people who aren’t working. Democrats are the party of higher taxes and bigger government. They always oppose letting people keep what they earn, and they always want the government to take free market solutions to health care, etc. so they can use the provision of health care to buy votes. So for them, kicking 1.3 million people out of work is a benefit.

When it comes to economics, we know what works. Trump cut taxes, and unemployment for all races is at a record low. If you want to reverse that, and have more people unemployed, living off taxpayer’s, then vote for Democrats.

Voting rights for terrorists and rapists, death penalty for unborn babies up to 9 months

Boston Marathon terrorist about to place bomb behind 8-year-old child

Wow. It seems to me that the Democrats had a pretty good chance of competing against Trump in the 2020 election, with their presumed nominee, Bernie Sanders. He’s wildly popular with young people. He’s raising tons of money from rich progressives. All Bernie has to do is just not say anything crazy, and he’ll be competitive. Unfortunately, he can’t control himself.

Here’s a report from the radically-leftist Boston Herald:

U.S. Sen. Bernie Sanders says the right to vote should extend to those in jail — even the Boston Marathon bomber.

“If somebody commits a serious crime — sexual assault, murder — they’re going to be punished,” Sanders said in his CNN town hall talk Monday night. But, “I think the right to vote is inherent to our democracy. Yes, even for terrible people.”

The majority of convicted criminals would vote Democrat if they could, because Democrats are less strict on crime than Republicans. Democrats are always looking to allow more people who will vote Democrat to vote. They want to lower the voting age, because young people who don’t pay taxes naturally vote for free stuff. And they also want to import low-skilled immigrants and put them on a path to citizenship. Low-skilled immigrants pay less into the system than they use in education, health care, etc. They also vote Democrat.

Medicare for All

Bernie also has a long list of big spending programs, because he thinks that $22 trillion in debt and trillion dollar deficits is no big deal. But the truth is, we’re already out of money for the big social welfare programs that Democrats already passed. We certainly don’t have money for any new ones.

Far-left CBS News explains:

Social Security is on a path to become insolvent in 2035, with only enough money cover about 80 percent of its obligations.

Medicare would become insolvent even sooner, by 2026, if no changes are made to payroll taxes or how health providers are paid.

[…][M]any Democratic presidential candidates are calling for expanding Medicare benefits — even proposing “Medicare for All” — rather than addressing the program’s worsening finances.

How will Democrats pay for MORE spending when we can’t pay for the spending we already have? Tax increases won’t be enough, so they’ll have to nationalize private 401K retirement plans like other socialist nations have.

And what about Medicare for All? Well, they can just seize the money that’s being used to buy private health insurance now, and put everyone into a government-run single payer system. That’s what happens in Canada right now. People who pay taxes pay for the all the costs, but they still have to get in line behind those who don’t pay anything in taxes. The average cost (to middle-class taxpayers) is about $11,000 per year. That’s a lot more than people pay for private health insurance which delivers higher quality care. But the costs are higher for less quality, because the people who pay into the system are covering the people who don’t pay.

And remember, abortion through all nine months of pregnancy is taxpayer-funded in Canada’s single payer system. Pro-life taxpayers subsidize abortions. If you don’t like it, you can leave the country.

Infanticide

All of the Democrat presidential candidates support infanticide, according to this article from The Stream:

 On February 25, 44 Democrat senators, including all 6 declared presidential candidates, voted against the Born Alive Protection Act. Put another way, they voted for infanticide.

New candidate Pete Buttigieg is also in favor of infanticide: abortion through all nine months of pregnancy.

If you’re voting for a Democrat in 2020, then you’re going to get infanticide if they win. No use complaining later that you’re pro-life if you support the killing of viable unborn children who survive botched abortions.

Raising the minimum wage

Another policy supported by many Democrats is raising federal minimum wage rates.

Let’s take a look at a study reported  in the Daily Caller:

California’s minimum wage increase has cost the state thousands of jobs worth of growth in the state’s booming restaurant industry, according to a recent study by the University of California Riverside.

California passed a bill in 2016 to bring the state’s minimum wage up to $15 an hour. For businesses with more than 25 employees, the state’s minimum wage rose to $12 in January and will hit $15 in January of 2022. Other businesses have until 2023 before the full $15-an-hour minimum takes effect.

[…]Researchers also found that the minimum wage slowed growth more in low-income areas.

[…]Researchers estimate that the minimum wage increases will cost the state roughly 30,000 jobs from 2017 to 2022.

If you force businesses to pay workers more, them employers are left with no choice but to lay off workers, or cut hours.

Minimum wage jobs are entry level jobs. They’re not meant to allow people to buy a house, have children, or travel the world on private jets. People get them in order to get something on their resumes so that they can move up to more challenging jobs that pay more. If a person doesn’t want to move up to a more challenging job that pays more, then they shouldn’t be complaining that they can’t make the same life choices as software engineers, nurses and electricians. Jobs don’t all pay the same, because some are harder than others.

If voters chose candidates based on whether their policies would actually work to prevent poverty, they would never vote for Democrats. But so many people in America don’t vote based on what results policies will achieve. They vote in order to feel something about themselves. Transferring wealth from “rich” employers to “poor” minimum wage workers feels good. So they vote for it. And when those workers are laid off, they don’t care because they’ve already stopped paying attention.