Friday, June 8, 2018

Bernie Sanders' War on Reality

That's not really the title PJ Media used; they said Bernie Sanders Declares War on Disney Over the Minimum Wage, I'm just going with the shorter, more pithy version.
On Saturday, Sen. Bernie Sanders (I-Vt.) declared war on Mickey Mouse. The self-declared socialist launched an assault on Disney for not paying its workers enough, just as minimum wage increases have hurt local economies and Sanders' own liberal state of Vermont has worse inequality problems than Disney.

"We need to shame Disney," Sanders declared at a rally in Anaheim, Calif. "I want to hear the moral defense of a company that makes $9 billion in profits, $400 million for their CEOs and have a 30-year worker going hungry."
You can tell this is either preparation for a 2020 primary run or simply dementia because Sanders is also lying about Disney's union contracts. Disney has already promised to increase wages for Disneyland workers to $15 per hour in under two years - by 2020.  Amid ongoing union negotiations, Disney offered an immediate pay increase to entry-level employees to $13.25 per hour, up from $11 currently.

Over five years ago, I wrote that I'm so tired of this issue that it's hard to even write about it, and I'd already written several pages on it by then, the third year of this blog.  In essence, those of us who oppose federal wage control like minimum wage laws always predict that it's not actually going to help people.  The laws are passed, the predicted bad things happen, and the answer is always to raise the minimum wage higher. 
I'm tired of arguing over this issue because, to be honest, I'm always right and I always lose.  I'm right because I say it will cost the jobs of the people it's trying to protect and it will lead to inflation.  Those things then happen.  And I always lose because not enough politicians have the guts to stand against a minimum wage increase. 
Which is why I say it's declaring war on reality.  Sanders argument, and the argument of all income redistributors, is that the company is making a profit so therefore they should be paying their workers more.  Disney, though, is a publicly traded company (DIS) and they are legally obligated to work for the financial interests of their investors.  The balance of how much the company should pay in dividends or other things counted as returns on investment (like stock splits) vs. the financial needs of the company is not a trivially easy question.  Companies have to balance their expenses vs. their income and a host of other things.  The idea that there should be no profit is pure idiocy.  Why would anyone go into business if there's nothing in it for them?

If history teaches us anything, it's that the free market is better at solving problems like wage levels than big governments.  We can cite examples all day, but here's a few.  There are places all around the country where higher minimum wages have been mandated.  The amount of troubles they've had are directly related to how much increase was mandated.  Seattle workers found they had less pay when the hourly wage went up.  Some lost their jobs as the companies went out of business.  There's a similar case study between Wisconsin and Minnesota that shows where the minimum wage was mandated higher, job growth lagged behind.  The kicker is that Minnesota's minimum wage law wasn't as bad as Seattle's, yet it still happened.  How long before all minimum wage jobs become robots and self-service kiosks?  


The new face of McDonald's  (Getty Images)

The guys at Values & Capitalism mentioned an aspect I'd not thought of.  Big companies, like Disney, are better able to handle these laws than smaller companies.  In their example, minimum wage was increased from $9 to $15/hour, the equivalent of a $12,500 per year tax.  The small restaurant, the small business can't ignore that. 
Some advocates of the $15 minimum wage wish to “stick it to the man,” hitting the billionaire CEOs. This small business CEO, however, claims that “last year, my employees made more than I, the owner, did. I am still trying to pay off the line of credit that got me through the recession.”
Could big businesses be part of the minimum wage talk?  We've seen many times that big businesses are in favor of "lawfare" and using the law to keep small companies from becoming a threat to them.  It's not out of the question. 

This week, we read that medicare is going bankrupt sooner than expected; Bernie and the Evil party are still saying Medicare for all.  People who can't understand what you just read rally for it, just as they rally and strike to hurt themselves by raising the minimum wage.  We try to tell them it's not going to work out the way they think, like we'd tell a 6 year old they really shouldn't stick their finger in that candle flame, and they respond by calling us "Hatey McHater". 


13 comments:

  1. Disney has always been one of the best companies to start a working life at. They treat their workers far better than the typical convenience store or grocery store.

    By forcing Disney to increase wages, all they will do is eliminate a number of entry level jobs that train normal people for the workforce. Disney will happily replace people with automation. And then where will the unions be?

    If Sanders was a true practicing socialist, he would move into a 1 bedroom apartment with his wife and their maid and sell his houses and cars and use most of his salary and give all his money to the poor and downtrodden. But he isn't a true socialist. He's just a stupid elitist.

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    1. The fact that he has those cars, a maid, etc. without working indicates that he isn't stupid. Lying elitist, yes. Stupid, no. He knows that his brand of pseudo-economics is BS but the drooling masses will vote for his agenda, so who is the stupid one here?
      _revjen45

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  2. As a small business owner in Washington state, where minimum wage laws mandate yearly increases to reach $15/hr in a few years, I can tell you that I hire only part time help and work them only when I absolutely must. No time for extra training or mentoring them in new skills. I have to cut them loose the minute it slows down, and lay them off during the slow season. And yes, they make more per hour than I do.

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    1. The thing about those laws is that "it doesn't take a Ph.D. in economics or business" to see that's what's going to happen.

      There are far more business owners who went without pay in a pinch than their employees ever did. They'll arrest you if you don't pay employees. They don't care if you don't pay yourself.

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    2. Now the voters have also given (taken) a gracious 1 hour for 40 "sick/family care". There's something else coming next year too.
      Animal Farm wasn't fiction.
      Jerry

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  3. The idea that Big Biz is actually pushing some of these ideas because they KNOW that it will cripple or destroy small biz that they compete against is true.

    One of the things that shocked me when I found out about it is the current anti-America bias within the US Chamber of Commerce. I had assumed that they would be pro-Republican and Pro-America and free enterprise. Well they may be pro-republican but not so much on the rest of it. If you ever wonder why we still have a crop of pro-amnesty Rino's infesting our government then simply follow the money. The Chamber of Commerce spends a LOT of money buying politicians so that they will support the importation of ultra cheap slave labor. The Rino's have the cash to fight against any conservative challenger and will support the Rino party line even to the point of rubber stamping the treason's committed by obama for eight years. Obama never broke faith with the Chamber of Commerce and advocated and imported millions of cheap slave laborers with the help and approval of the republican party.

    One other thing that is in the playbook of Silly Sanders, the minimum wage is just the opening, the actual goal is for the American people to demand that there be a Maximum wage, that government gets to say what is the maximum anyone can earn. Because? Equality, absolute guarantied miserable Equality.

    MSG Grumpy

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    1. I'm missing a connection of "cheap slave Labor". Do you mean people who pay less than minimum? Cash wage, not reporting nor claiming wage expense? Please explain.

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  4. I've maintained for years that the real losers in this are going to be the thousands of occupations that make between the existing minimum wage and $15/hr. These are folks who worked their butts off to get training and get something better than minimum wage. Say someone went to get tech school, or cosmetology or something that pays them $13 when min wage is $7.50. When the sweep up to $15 starts, I'll bet that they don't end up ahead. If they do end up ahead, I'll bet it's not the same percentage-wise.

    Talk about demotivation! They work hard to get ahead in life and have it wiped out. And within six months, all the costs will go up so that they're worse off than they are now.

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  5. "There are far more business owners who went without pay in a pinch than their employees ever did. They'll arrest you if you don't pay employees."

    I was that guy in 2009. Didn't know they'd arrest me if I didn't pay. It just seemed like the right thing to do. I'd gotten rewards for my financial risks earlier when my employee only got small bonuses. It only seemed fair that I would take the hit when it went bad instead of him taking the hit.

    "These are folks who worked their butts off to get training and get something better than minimum wage."

    Some CEO, I forget which, decided to signal his virtue by raising everyone's salary to $75,000 (?). He was shortly out of business as those people you mentioned moved on and left him with the people who weren't worth that much. Hard to legislate against that.

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  6. Don't I remember a certain company a couple years ago, replacing every single American in the IT department, and making them train the new H1B hires?

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  7. JC:

    IIRC, that was ---DISNEY---
    ---------------
    I was in a similar situation, although not H1b related. When the new guy realized that he had been hired to replace his trainer, he decided that he didn't want to work for a company that would do that to an employee. He decided to accept a late offer from another company he had applied at. My company even offered to created a new job title to allow them to pay him more than the original offer, but he still walked.
    I laughed and laughed. They still tossed me when my contract ended. Management had gotten really stupid after the original CEO had left to move into Venture Capital. The parent Corp tossed the company a couple years later for poor performance.

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  8. Bernie and the Dems are at war with reality every day. _revjen45

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