The battle between the left and right continues to grow hotter this election cycle. The Bernie Sanders movement and their strong push for increased socialism in America has highlighted a large number of arguments, mostly based on ideas of economic equality and fairness.
While many frightening propositions have come from this group, the scariest is the resounding call for raising the minimum wage to $15 an hour. This movement is so strong and terrifying that two states, California and New York, have already signed legislation that will make this a reality.
To no one’s surprise, layoffs have already begun, almost a full year before the first increases go into effect. As you worry about how this movement will hurt job growth in America, I am here to tell you that you’re missing the bigger picture. With this movement, Sanders doesn’t have to win any political positions to get the socialized America he wants.
The Importance of Small Business
You’ve often heard that small business is the backbone of the American economy. This is more true than you think. Research shows that small businesses account for more than 50 percent of the U.S. GDP and supply 60-80 percent of all jobs. They also account for 63 percent of job growth in the country.
The primary argument against major minimum wage hikes is how they hurt small businesses. The left knows this, and it is in fact their goal. Annihilating independent businesses is the key step to seizing control of our economy. They push the movement on the principle that corporate America can absorb the increased labor and that the increased wage is really just “rich tax” that will improve economic equality. The truth is that this will virtually eliminate economic mobility, ushering in the class system necessary to sustain a socialist system.
Why the Left Hates Economic Mobility
Economic mobility is hotly debated. Many studies claim that America has seen drastic mobility decline and that Canada and Europe have us beat. In terms of relative mobility, this is partially true. The U.S. has a low instance of seeing children in the bottom tier make it all the way to the top. The primary reason for this is absolute mobility.
Since the 70s, Americans across all demographics have enjoyed better income than their parents. In fact, after adjusting for inflation, 83 percent of Americans are better off than their parents by $26,000 or more.
This is why the definition of poverty has had to change so much in order to support the idea that prosperity isn’t reaching the bottom percentiles. As it turns out, economic freedom and the relative ease with which Americans can start their own business is the key to this mobility. The current generation is much better off than the previous because of the wealth generated by small business.
This brings us back to the $15 an hour minimum wage. Its purpose, under the banner of morality, is to destroy small businesses. Without the capital to pay double the current wages, small business will be choked in their early expansion days. This will drastically reduce the GDP and job growth and slay the American dream. As job opportunities disappear and people find it increasingly difficult to negotiate their incomes or change their economic status, there will only be one place left to turn: the government.
Tying it All Together
Creating a depression, or at least a major recession that most economists predict will be the result of a major minimum wage, is the catalyst to justify substantial increases to government employment and welfare programs. When half of the jobs are gone, the morally responsible choice will be to increase taxes to feed, house and care for the unemployed. Surely you can follow this to conclusion and see the path to establishing a completely socialist economy.
In short, making America socialist requires a devastating blow to our economy. We survived the dotcom bubble and the housing bubble. So, the new tactic is to claim a morally superior stance of investing in the poor by increasing minimum wage. This is actually an attack on small business, without which the U.S. cannot hope to sustain economic growth or mobility. The resulting stagnation can and will justify increased government involvement, increasing taxes and welfare programs until the only possible outcome is Mr. Sanders’s socialist dream. He doesn’t have to win an election to achieve his goals; he only needs the minimum wage to go national.