Good Intentions Gone Awry

Progressives typically pride themselves on being better educated, more scientifically savvy, and possessing a greater fealty to empirical facts than their benighted conservative opponents. Yet progressives consistently prefer good intentions to good results.

The most obvious example is the progressive push for dramatic increases in the minimum wage. Politicians across the liberal-to-progressive spectrum, including all the current Democratic presidential hopefuls, are wedded to the notion that higher minimum wages are an essential tool to reduce income gaps.

The problem, however, is that the progressive pet nostrum flies in the face of one of the first rules of economics: Higher prices lead to lower demand. In a tight job market, and in places with an educated workforce, higher minimum wages might boost lower earning workers, without significant job loss. But where the increases are large, the entirely predictable result is the shedding of lower-wage jobs, a turn toward automation or cheaper foreign labor, higher rates of failure for businesses at lower profit margins, and fewer hours of work for affected employees.

In a 2017 working paper published by the National Bureau of Economic Research, a team of University of Washington economists hired by the city of Seattle, a progressive haven, found that the costs to low-wage workers from Seattle’s gradual imposition of a $15-dollar minimum wage have outweighed benefits by a ratio of three to one. The study’s authors found that the average low-wage worker lost $125 per month in wages, either to the loss of his or her job or reduced hours as a result of increases in the minimal wage.