What Just Happened in Booming Trump Economy Proves We Don't Need Min. Wage Hikes
Another cherished Democrat dogma is biting the dust.
When it comes to the economy, few things are dearer to liberal hearts than raising the minimum wage. It lets them pontificate about caring for the poor while flexing government power, and gives them a ready-made way to paint Republicans and conservatives as the heartless caricatures of socialist lore.
But interactions that are ordinary experiences for most Americans are proving how wrong they are.
A short piece published last week by The Wall Street Journal sums up the case pretty well.
The article focused on the price of a haircut at Sport Clips outlets. The number of customers seeking a haircut is outpacing the number of hair cutters available to provide the service.
And that means the pay for hairdressers is going up all by itself — without any need for a government involvement at all.
As The Wall Street Journal reported:
“Wages go up to lure or hold on to workers. Debra Sawyer, a Sport Clips franchisee with salons in Richmond, Virginia and Central Florida, said she raised worker wages in February 2017 in response to the labor shortage.
“Pay for team members increased 11% to $10 from $9 an hour, while pay for assistant managers rose 20% to $12 from $10 and manager paychecks increased 33%, to $15 from $11.25. Hourly bonuses also went up dramatically.
“Prices for services rise to cover part or all of the added labor costs. When the Sport Clips franchisee implemented the wage increase, it increased the price of a standard haircut to $20 from $19, a 5% bump, and the signature service cut went to $25 from $24. All of these increases went to pay raises and hourly bonuses, said Ms. Sawyer.”
Customers are paying $1 more per haircut (which isn’t going to break anybody), while the workers who cut the hair are getting a decent percentage in a raise. Miraculous, isn’t it?
Adam Smith called it “the invisible hand.” Most people just call it supply and demand. And everyone from drug dealers on street corners to CEOs in corner offices understand just how it works.
On the other hand, community organizers, union bosses and Democrat politicians pretend they don’t understand it at all. Hence the constant agitation for minimum wage increases — as the “Fight for $15” frauds keep pushing.
But the tax cuts approved by congressional Republicans and signed by President Donald Trump in December are already having the kind of impact that Democrats claim they want to see — wages going up for workers at the bottom end of the employment scale.
Now, here’s the thing. The Journal points out that wages in every sector of the economy haven’t gone up as fast as they have in the personal grooming business.
“For example, the construction industry, which has struggled nationwide to find workers, has seen average hourly wages in February rise 3.3% from a year earlier, which is stronger than overall private-sector wage growth of 2.6% but far less than at the hair salon,” The Journal reported.
Well, here’s a clue. If the construction industry has “struggled” to find workers, then the chances are the wage hasn’t risen enough to take care of the problem.
The point is not that some amorphous independent being — the “Construction Wage God” — hasn’t seen fit to raise wages yet. The people who run construction firms haven’t found it necessary to do so yet, or are locked into contracts with customers where they can’t, or whatever the reason might be that doesn’t happen to apply to hair dressers.
(Personal grooming, after all, is a field where the workforce is a good deal more mobile than most construction crews. And its product is a good deal more transitory than a skyscraper.)
For Democrats, those fluctuations are the reason to be talking about hikes in the minimum wage. But the reality, as usual, is exactly the opposite.
Unlike the natural demand that an improving economy brings, the unnatural demand of government imposed minimum wage hikes actually decreases employment, as businesses pare their workforce to be able to afford paying some employees more.
As liberal hero John Kennedy was fond of saying, a rising tide lifts all boats. The point of government policy isn’t to make sure all the boats rise at the same time, or in uniform, lockstep levels.
The point is that with government policies that fosters a strong economy — and the economy has boomed under Trump — the boats will rise enough to keep workers satisfied, or the workers will find another boat.
Just ask the Sport Clips hairdressers.
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