April 11, 2021

AOC’s Terrible Minimum Wage Argument

“It is utterly embarrassing that “pay people enough to live” is a stance that’s even up for debate,” Alexandria Ocasio-Cortez recently tweeted. “Override the parliamentarian and raise the wage. McD’s workers in Denmark are paid $22/hr + 6 wks paid vacation. $15/hr is a deep compromise — a big one, considering the phase in.”

The most obvious problem with Ocasio-Cortez’s contention is that Denmark, like other Scandinavian nations, doesn’t have a statutory minimum wage. Industries and workers engage in sector-by-sector salary negotiations, which might well undermine intra-industry competition, but which is a much better idea than the flat national-wage floor being peddled by Democrats. So, this popular progressive talking point about Denmark’s miracle middle-class fast-food worker doesn’t make much sense to begin with.

Especially when one considers that the per-capita income in the United States is virtually the same as in Denmark — quite a feat given that we’re a pluralistic nation of around 330 million people that naturalizes another 900,000 people every year, many from poor nations, and that Denmark is a homogeneous country of fewer than 6 million citizens that, in recent years, has effectively shut down its borders to poor immigrants.

Denmark’s generous welfare state is propped up by shared social and cultural norms, and institutions that are habitually reviled by American progressives: unimpeded international trade, low regulatory burdens on business, and sometimes oil and gas checks — Denmark and Norway are Western Europe’s largest oil and gas producers.

Then there is the matter of what exactly $45,000 — the salary an employee making $22 an hour on a full-time basis would earn — means in each country. Denmark can afford its system because high taxes are paid by all its citizens, not just the wealthy. Not only do Danish fast-food employees making $45,000 hand over around half their earnings to the government, they pay a 25% value-added tax on most purchases, as well as a number of other levies. In return, Danes are afforded all kinds of government-provided services. Presumably, Ocasio-Cortez approves of this arrangement. Either way, Americans whose eyes light up at the prospect of making $22 per hour should know that nearly $11 of that goes straight to the state.

Further, how much does a hamburger cost in Denmark? Spoiler: Considerably more. If the federal government forced fast-food chains to start paying employees $22 per hour, and giving them six weeks paid vacation, and health care, and all the other goodies that progressive want to compel companies to offer, American consumers should be prepared to pay more for food or to be served by robots. The last time there was a push for a $15 minimum wage, in 2015-2016, McDonald’s quickly rolled out a touchscreen self-service kiosk makeover. Since then, that technology has only gotten better — and cheaper. Big chains like to offer up rhetoric that pleases the activist left, but in the end, they are not charities but businesses with stakeholders. And profits matter.

Now, I understand that socialists would be happy creating a permanent proletariat that is reliant on government to fix their wages and dictate all benefits. And, certainly, there is nothing demeaning about taking a job at a fast-food restaurant. For many young people, it’s a temporary stop where they can take on responsibility for the first time and earn some money. For others, who need these jobs, it offers flexible hours and part-time work. Most people do not make careers out of working at Wendy’s. Fast-food chains have massive employee turnover rates. Some experience a 100% turnover every year.

The other day, Ocasio-Cortez argued that, “when we keep the minimum wage artificially low, it’s at a huge cost to our government … they’re essentially enormous subsidies to Walmart.” The notion that Ocasio-Cortez is apprehensive about government subsidies is, of course, risible. But she’s also wrong. Walmart, which revolutionized shopping by offering millions of low-income Americans affordable goods (progressives never mention that part of the equation), recently increased its internal minimum wage to $13-$19 per hour for most workers, while Amazon, Target and Costco have raised their minimum wages to $15 per hour. Is this a good idea? We’ll see. As Thomas Sowell once pithily noted, all public policy is about tradeoffs. The increases will help some workers, no doubt. But they will also cost jobs, either by leading to less overall hiring or by forcing consumers to pay “artificially” high prices, rather than spending the difference elsewhere.

Ocasio-Cortez’s rhetoric implies that there is something artificial about a minimum wage of $7.25 per hour but nothing artificial about a minimum wage of $15. This is ridiculous. The only nonartificial minimum wage is zero — which, incidentally, is what the 1.4 million people the CBO says would lose work due to a $15 national minimum wage will be making if AOC’s side of the argument wins.

David Harsanyi is a senior writer at National Review and the author of the book “First Freedom: A Ride Through America’s Enduring History With the Gun.” To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate webpage at www.creators.com.

COPYRIGHT 2021 CREATORS.COM

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16 Responses

  1. “Minimum wages” are set to place a floor for new workers with little to
    no experience to enter the job market.
    They have never been intended as a “living wage.”
    I was paid the minimum wage for a part time job driving a
    wholesale florist delivery truck for all of about 4 weeks.

    I then found a job for a ‘Home Repair’ company doing plaster repair.
    I was the ‘helper’ (read as muscle) for an older plasterer that still
    wanted to work but could n longer cope with moving around
    50 pound bags of plaster or lime.

    He taught me how to mix plaster and do 2-coat and 3-coat plaster finishing.
    He was a great teacher.
    The owner of the ‘Home Repair’ company promptly raised my pay when John
    told him how much I had helped him and how quickly the two of us could complete repairs.
    I was then being paid more than twice the minimum wage as a (semi) skilled tradesman.

  2. AOC deserves to be working at McDonald’s. She isn’t too bright. Not bright enough to be in Congress. I guess the people who voted here in, aren’t too bright either. What do you expect, out of a New Yorker, where Cuomo has let them down.

    1. they tried to increase years ago but if you where a waitress they took part of your tips count for wage, i understand some places would have lay off people

  3. AOC or AKA “All Out Criminal” needs a job and not a paycheck . The thing has never worked for anything and that includes the ones on her knees , back and hands and knees. It does not understand work , economics , nor honesty which makes it a great communist and traitor all in one . NY vote it out or impeach , right now .

  4. TIME TO DITCH AOC!

    WE THE PEOPLE (aka SILENT MAJORITY) have had countless opportunities to have stopped this nightmare, but we chose instead to give the DEMOCRATS what they expected of us, to REMAIN SILENT! Thus, making us equally complicit in the fraud perpetrated against United States Americans!

    Isn’t it time you actually did something, took action?

    People should write these numbers down and use them frequently even if you don’t think your elected officials listen, they are required to note your comments for the permanent record in their caller database for anyone to see.

    Members of the House
    202-224-3841

    TOLL FREE:
    866-272-6622

    One call per rep!

    Keep in mind: SILENCE = ACCEPTANCE

  5. The bad thing about the whole raising of minimum wage besides the cost of everything else going up and the loss of jobs nobody seems to care what raising the minimum wage would do to people on social security are they going to get double social security to be able to afford food or any other commodity when there prices all double for businesses to stay afloat. Biden’s and aocs insensitivity to the plight of Americas seniors is beyond disturbing of course they think seniors are a burden anyway.

    1. No they wouldn’t. I retired early (62) the SS I draw now will not be increased. The only way I could get more, outside of the laughable COLI, is to wait till I’m 72 then pay back all the money they paid me in the previous years and refile at the higher amount. How many retirees do you know that could do that? In my case at last yrs. annual I would have to pay back $81,000 and that doesn’t include any Cost of Living Increases (COLI)

  6. Well, Old Joe and the Ho’s administration is in it’s third month. Because of stupidly attacking each other, democrats in the House and Senate have made them invalid. So Old Joe signed over a half a hundred EOs that he never read, trying to erase Trump. They even came up with a failed impeachment of a private citizen. Almost all the campaign promises Old Joe made have fallen flat on their faces. So he ordered a new war because that is where democrat power shines. As for the Ho, she is no more relevant in any supportive areas than the worn out girdle she wears. Mostly because she got to the top on her back but at 56 years old, even that’s quickly wearing thin.

  7. There should be an investigation into AOC. She has been caught to many times trying to defame other members in congress. Why does she get away with it.

  8. AOC needs to give up her pay for her people. Or move overseas if that’s where she is comfortable. Paying their taxes and prices.

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