Minimum Wage, Immigration, Tariffs And Jobs: Only One Candidate Has It Right

When the Constitution was written, the concept of a job search was almost unheard of. You were either born on a farm, which meant you became a farmer, you became an apprentice in a trade, or you went off to gain an education at a place like Harvard. Ben Franklin didn’t have to send his résumé off to gain employment.

Of all the remaining presidential candidates, only Ted Cruz gets it right on minimum wage, immigration, tariffs and jobs.

Our founders would understand that you can’t legislate a living wage. Put in terms of the late 18th century, it means that the government can’t guarantee a good crop, or disease-free cattle. The government can’t insure against every peril facing a family and ensure they don’t face hardship. The founders understood the place of a charitable, moral population at the local level who care for the welfare of their neighbors.

It’s why the preamble for the Constitution reads “promote the general Welfare.” The key words are “promote” and “general.” Today’s politicians of all stripes confuse those words with “guarantee” and “individual,” leading to dumb ideas like the “living wage” favored by Bernie Sanders.

Bernie wants a national $15/hour minimum wage, which would be an absolute disaster in every way. It would:

  • Destroy jobs for those who need them most, unskilled disadvantaged laborers
  • Destroy the temporary/seasonal entry-level job market, like summer jobs for high-school and college kids
  • Entice businesses to use illegal immigrant workers
  • Raise prices on every good and service (restaurants, healthcare, shipping, transportation)
  • Place an unsustainable burden on small business which will ultimately sink the economy

The most popular article I ever wrote is headlined “McJobless in Seattle,” which was shared nearly 160,000 times. In Seattle, “McDonald’s has unveiled its plan to use touch-screen technology in self-service kiosks where customers can order and pay for their food.” You see, kiosks don’t get paid. They don’t call in sick. They don’t steal food. They don’t have temper tantrums and insult customers.

The effects of Seattle’s folly implementing Bernie’s plan to ruin America are manifold. College student and former Federalist intern Mitch Hall, at 20 years old, decided to take a semester to intern in Seattle, which would require a part-time job for expense money. After 70 tries, he’s still looking.

Having a combined two years of serving experience and close to five years of total experience in the customer and food services industries (which is literally as much as you can ask for from a 20-year-old college student), I assumed I’d be able to find a restaurant gig in no time. So, after reassuring my parents all would be well in the financial department, I boarded a plane in Philly a few weeks later and made the move.

Yet seven weeks and more than 70 job applications later, I still have yet to land a part-time, minimum wage job. I’ve spent the majority of the last two months stalking online job sites and entire days traversing the various neighborhoods of Seattle, filling out applications and inquiring about job opportunities at any restaurant, coffee shop, retail store, or other service-oriented establishment I can find.

Having squandered all of the money I had saved to get myself through what I thought would be a brief job-hunting period, I now find myself faced with the reality that if I don’t find work very, very soon, I’ll have to cut my break short and move back to the East Coast.

Why can’t an experienced, educated food-service worker find a job for a semester in a city filled with restaurants? I mean, this isn’t Enterprise, Alabama where the Mellow Mushroom is haute cuisine. In fact, Hall probably would have found a job there, where the minimum wage is $7.25. Hall concludes:

These restaurateurs and store managers don’t want to risk hiring a relatively inexperienced young adult they’ll have to spend precious time and money training, and who may easily grow complacent in the job once he realizes he’ll get paid $13 an hour no matter the extent of his stay or the quality of his job performance.

In highly technical language that even James Madison would easily grasp: Duh. If you pay someone more than they are worth, they will quickly lower themselves to the expectation of doing as little as possible since they know they are getting something for nothing. Find me a rich heiress (Paris Hilton anyone?) and I’ll find you a lazy self-engrossed underachiever–the concept scales down very well.

I’ve spoken to many business owners who have a hard time finding employees willing to work hard, show up, and learn a skill. The feeling of entitlement is a strong demotivator while starvation is an extremely strong motivator. Even Bernie supporters should realize that there’s a middle-ground between letting someone who can’t provide for themselves starve and giving everyone entitlement to be lazy.

On the relationship between jobs and immigration, Cruz likes to tell the story of Rob Knorr, owner of Maricopa, Arizona-based RK Farms, which grows peppers. He told the story at the CNN Town Hall Tuesday night. Arizona’s tough enforcement of immigration laws, which Cruz (and Trump to give him credit) applaud and plan to implement nationwide, caused Knorr’s illegal migrant labor pool to dry up. So he cut his acreage and developed a machine to help harvest peppers, cutting his workforce by 90 percent. He was then able to hire American machinists at a higher wage.

Less immigrants means more better paying jobs for Americans at the lower-end of the spectrum.

“Even if the size of the state’s GDP decreased, the decrease in immigration redistributed income from employers to employees, particularly at the bottom end of the labor market,” says Steven Camarota, research director of the Center for Immigration Studies, in Washington, which favors reduced illegal immigration. “That’s a good deal.”

This is the opposite of Sanders’ and Clinton’s plan to expand immigration and mandate a higher minimum wage. Their plan will result in businesses like RK Farms failure and net job loss. Keeping illegal immigrants around just to pay them less than Americans costs everyone more.

In 2004, the Federation for American Immigration Reform, a Washington-based group that seeks to reduce immigration, calculated that undocumented workers cost Arizona taxpayers more than $1 billion a year for education, medical care and incarceration, after subtracting the estimated taxes they pay.

Mechanization and industrialization were issues in our founders’ day, and in those days they were considered advances. With today’s liberals, they would rather go back to the days before the cotton gin (carbon footprints and all). In emerging markets like China, mechanization and industrialization are everything, driving their growth and ability to manufacture an amazing quantity of goods at a very low cost.

Clinton and Sanders, along with Obama, would rather wrist-slap China for not doing enough to combat global warming. (Hey, they limit their population growth, look at all the carbon dioxide they’re saving by having less people. What more do you want?)

Instead of focusing on human rights abuses and the evils of a Communist dictatorship (which he praised), Trump would impose punitive tariffs on China and other trade partners.

“I would tax China on products coming in,” Mr. Trump said. “I would do a tariff, yes — and they do it to us.”

Mr. Trump added that he’s “a free trader,” but that “it’s got to be reasonably fair.”

“I would do a tax. and the tax, let me tell you what the tax should be … the tax should be 45 percent,” Mr. Trump said.

That kind of tariff would destroy jobs in America, not create them.

Individuals wouldn’t be the only ones screwed by the Trump tariff. American businesses (and their many workers) would also be hit. Because almost half of what we import from China is industrial supplies and materials or non-automotive capital goods (i.e., inputs used by American manufacturers), many of these firms would pay more for the things they need to remain globally competitive. These higher costs, of course, also mean fewer employees, if not outright bankruptcy.

Individuals would be screwed in the short term because the price of everything made in China (and that’s just about everything) would increase. Importers and retailers would not absorb the cost; it would be passed on to consumers. So prices would rise, and jobs would dry up. Capital for innovation and investment in better manufacturing methods would go overseas, not in the U.S. where it would be captive to the punishing tariffs.

Trump is no different than Sanders or Clinton, just on a different scale. While the Democrats argue over which underprivileged classes are unfairly discriminated against and how everyone should be entitled to a fair share of other people’s wealth, Trump advocates taxing everyone to somehow even out international trade balances.

Trump is living in 1980, buying into Lester Thurow’s debunked “The zero-sum society.” It’s liberal thinking, no matter how you cut it. From Forbes in 2007:

Undeniable progress. Yet the zero-sum virus lives! You can find it today lurking inside these political canards: Energy is running out. Earth is burning up. Immigrants take American jobs. Imports wreck American industries. Taxes must go up to balance the budget. Americans spend too much on health care.

There’s only one candidate who doesn’t buy into the liberal talking points of mandated wealth redistribution, centrally-planned market manipulation, and job destruction. Ted Cruz gets all the answers right.

It’s not about “who’s the best conservative.” (That’s like arguing “who’s the best Christian” without first establishing that Christianity is true.) It’s about who’s right. On the minimum wage, immigration, tariffs and jobs, Cruz is right. Trump, Sanders and Clinton are all wrong.

About the author

Steve Berman

The old Steve cared about money, prestige, and power. Then Christ found me. All at once things changed. But the Holy Spirit produces this kind of fruit in our lives: love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, and self-control. There is no law against these things!

I spent 30 years in business. Now I write and edit. But mostly I love. I have a wife and 2 kids and a dog and we live in a little house in central Georgia.

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