A family devastated when a parent comes home with news that they’ve lost their job. Human dignity crushed under the weight of multi-year unemployment. Hope for a better financial future slowly drained away by a seemingly endless drought of good job opportunities. This has become common for millions of (no longer) working families in America today.
Having overseen this new “progressive era” of economic stagnation, President Obama recently gave a speech addressing economic inequality, calling for an increase in the federal minimum wage (currently at $7.25 per hour) under his vision of how to “rebuild America’s economic and civic foundation to continue the expansion of opportunity for this generation and the next generation.” Since that speech, the president has been joined by local liberal voices in Utah, arguing the economic wisdom of a higher minimum wage because “the jobs that would be affected, mostly retail and food service, cannot be outsourced to Bangalore.”
Unfortunately, this misguided policy proposal suffers from “a reality problem.” The reality of a higher minimum wage is that it would steal away job opportunities that would otherwise exist for working families – such as the job at the local restaurant or grocery store that gives a family something to get by while they seek better opportunities through education and hard work.
For instance, several well-known chain restaurants (Applebee’s and Chili’s) have turned to technology to replace what low-wage employees have traditionally done while simultaneously improving the dining experience: installing “iPad-like tablets at every table” for customers to order their food with, rather than doing so through a waiter or waitress. In a politically correct manner, representatives of these restaurants “insist that they won’t be changing their staffing levels” with this technological innovation.
But what should we expect if the government makes maintaining staffing levels more expensive just as these cost-effective technological innovations begin to spread? Common sense would suggest that the predictions from liberal activists of economic renewal from raising the minimum wage would turn out to be little more than naïve optimism. In other words, what began as a progressive promise for a better life for working families would turn out to be a lie, reminiscent of “if you like your health plan, you can keep your health plan.”
Contrast that with the promise of conservative ideas, such as those found in the “conservative reform agenda” of Utah Senator Mike Lee.
For example, his Family Fairness and Opportunity Tax Reform plan would simplify the tax system while eliminating the “marriage penalty” that taxes the combined income of married couples at higher rates than if they were single. More importantly, it would establish an additional $2,500 child tax credit that would count against not only income taxes, but payroll taxes as well. Rather than promising higher wages to working families only to eliminate their job opportunities, this tax credit would actually increase the income of working families without jeopardizing their job by harming their employer’s bottom line. In other words, it would actually fulfill the promise of improving the lives of working families.
Lee’s Working Families Flexibility Act and his Higher Education Reform and Opportunity Act would promise to improve the actual lives of working families, if less directly. The former would increase families’ freedom to use overtime compensation in a way that best improves their quality of life, and the latter would create improved (and likely more affordable) opportunities for working families to gain more higher education or vocational training. Most importantly, these policies offer the promise of moving up the economic ladder to working families without simultaneously destroying their opportunities via ill-considered consequences.
While self-styled “progressives” are usually (though not always) well-intended, they are often blind to the inconvenient truths that show their promises to be more fantasy than fact. Pursuing these illusions and inflicting their consequences on hard-working families is misguided because it does nothing to lessen economic inequality. It is also immoral in that it amounts to a sentence of indefinite unemployment, underemployment, and poverty to those most in need of improved economic opportunities.
Rather than chasing liberal fantasies, policy-makers should pursue the promise of common sense, conservative solutions.