The Daily Signal - #505: What's Wrong With the $15 Minimum Wage?

Episode Date: July 16, 2019

House Democrats are poised to pass a $15 minimum wage this week—a policy that’s become more and more mainstream within the Democratic Party. But would it actually help workers? What effect would it have on the economy? And what effect has it already had in places where it’s been tried? We ask those questions and more in today's conversation with Rachel Greszler, a labor expert at The Heritage Foundation. Plus: The Netflix series "13 Reasons Why" removes a controversial scene depicting teen suicide. We discuss.We also cover these stories:-President Trump denies racism in weekend tweets, while Republican offer divided response-Justice Department decides not to bring civil rights charge against New York police officer in death of Eric Garner-Sen. Josh Hawley, R-Mo., introduces bills aimed at reining in college tuition and student loan debtThe Daily Signal podcast is available on Ricochet, iTunes, SoundCloud, Google Play, or Stitcher. All of our podcasts can be found at DailySignal.com/podcasts. If you like what you hear, please leave a review. You can also leave us a message at 202-608-6205 or write us at [e-mail]. Enjoy the show! Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Wednesday, July 17. I'm Kate Trinker. And I'm Daniel Davis. House Democrats are poised to pass a $15 minimum wage this week, a policy that's become more and more mainstream within the Democratic Party. But would it actually help workers? What effect would it have on the economy as a whole? And what effect has it already had in places where it's been tried? We'll ask those questions and more in our conversation today with Rachel Gressler,

a labor expert here at the Heritage Foundation. Plus, the series 13 Reasons Why removes a controversial scene depicting teen suicide. We'll discuss. By the way, if you're enjoying this podcast, please consider leaving a review or a five-star rating on iTunes to help us grow. Now on to our top news. President Trump again defended his tweets, presumably targeted at four liberal female minority Democratic lawmakers, urging them to, quote, go back and help fix the totally broken and crime-infested places from which they're they came. On Tuesday, Trump tweeted, those tweets were not racist. I don't have a racist bone in my

body. The so-called vote to be taken is a Democrat con game. Republicans should not show weakness and fall into their trap. This should be a vote on the filthy language, statements, and lies told by the Democrat Congresswoman, who I truly believe, based on their actions, hate our country. Get a list of the horrible things they have said. Well, House Minority Leader Kevin McCarthy defended the President on Tuesday against charges of racism. Here's what he had to say at a press conference. Mr. Leader, were the President's tweets that said go back racist? Yes or no?

No. And I do not believe the Speaker of the House was racist last week other when those individuals on her side of the aisle who are claiming the President's racist when they claim she was racist either. I do not believe that. I believe this is about ideology. This is about socialism versus freedom. And it's very clear what the debate is happening. I understand when I listened to their press conference yesterday, they talked more about impeachment than anything else. Even one of those individuals, this wasn't the first time they talked about impeachment.

On the night of being sworn in, they brought all their supporters together. And they spoke about impeachment in words that I will not use here. This is more from their basis about politics. And it's unfortunate we should get back to the business of America. Well, Senate Majority Leader Mitch McConnell for his part said the president is not a racist and blamed both sides of the aisle for overheated rhetoric. He said, quote, I think there's a consensus that political rhetoric has gotten way overheated across the political spectrum. Lower all this incendiary rhetoric. Everyone should do it, end quote. But a number of other Republicans were more quick to criticize the president. Michigan Congressman Fred Upton said the tweets were flat out wrong and uncalled for, and Texas Republican members Pete Olson will. Hill Hurd and Chip Roy all criticized the tweets, with Hurd calling them racist and xenophobic and Chip Roy saying the president was wrong to say any American citizen, whether in Congress or not, has any home besides the U.S.

Meanwhile, Representative Alexandria Ocasio-Cortez responded to Trump on Tuesday tweeting in response to his tweet, Hey, Mr. President, remember when you bragged about sexually assaulting women talking about feeling their breasts and genitals because when you're a star, they let you do. do it? Representative Ilan Omar retweeted Ocasio Cortez's tweet and said, this is what he doesn't want us to remember, but we do. His locker room talk is now Oval Office talk. Let's stop dismissing him and start holding him accountable. Well, Ocasio Cortez made headlines last month when she accused Customs and Border protection of running concentration camps near the border,

but the president hit back on Tuesday. During a cabinet meeting, he accused the far left of mischaracterizing those detention facilities, saying, quote, they're not concentration camps. They're really well run, end quote. He also said some of the news reported the facilities were clean and that children were being taken care of. The Justice Department won't be bringing federal charges against the New York police officer Daniel Pantileo who held Eric Garner, an African-American man, and a chokehold, killing him in 2014, an igniting controversy over how police related to minorities.

Garner's crime selling cigarettes illegally. Brooklyn U.S. Attorney Richard Donahue said per USA Today, and announcing that the DOJ wouldn't be taking action, quote, like many of you, I have watched that video many times, and each time I've watched it, I'm left with the same reaction, that the death of Eric Garner was a tragedy. The job of a federal prosecutor, however, is not to let our emotions dictate our decisions.

Our job is to review the evidence gathered, during the investigation, like the video, to assess whether we can prove that a federal crime was committed. And the video and other evidence gathered in the investigation does not establish beyond a reasonable doubt that Officer Pantileo acted willfully in violation of federal law.

Eric Garner's mother, Gwen Carr, spoke out against the Justice Department's decision. We're here with heavy hearts because the DOJ has failed us. Although we look for better from them, five years ago, my son said, I can't breathe 11 times. And today we can't breathe because they have let us down. Well, Missouri Senator Josh Hawley announced two bills on Tuesday aimed at raining in college tuition costs and student loan debt while boosting vocational schools. The first bill would allow more job training and certification programs to receive Pell Grant.

funding, opening the door for more students to get affordable education at a trade school. The second bill would give universities skin in the game when it comes to student loans. It would require universities to pay off 50% of the loan debt incurred by students who are about to default on their loans. The intended effect of that bill is to make sure students only get loans if they're likely to be able to pay them back, therefore preventing default situations. In a statement on the two bills, Holly said, quote, it's time to break up. the higher education monopoly. It's time to level the playing field and provide more options for

career training. We also must hold higher education institutions accountable that take advantage of students who rack up mountains of debt are unable to find a good job and default on their loans. While we have welcome news, the Minnesota Town of St. Louis Park has brought back the Pledge of Allegiance via unanimous vote, but it sounds like the council isn't too happy about it. Quote, to be clear, I fully agree with the change we made in June to eliminate the Pledge of Allegiance from our standard meeting agendas. Council member Tom Miller said, according to the Pioneer Press, I'm genuinely concerned about the safety and the productivity of our city staff and our residents. And that is why I am making this motion.

Well, up next, we'll talk to Rachel Gressler about the $15 minimum wage. If you're tired of high taxes, fewer health care choices, and bigger and bigger, government, it's time to partner with the most impactful conservative organization in America. We're the Heritage Foundation, and we're committed to solving the issues America faces. Together, we'll fight back against the rising tide of homegrown socialism, and we'll fight for conservative solutions that are making families more free and more prosperous. But we can't do it without you. Please join us at heritage.org.

So there is set to be a House vote this week on the minimum wage. And joining us is Rachel Gressler, Research Fellow in Economics, Budget and Entitlements at the Heritage Foundation. Rachel, thanks for being here. Thanks for having me. Okay, so the House is set to vote on a $15 an hour minimum wage, which is more than double the current minimum wage of $7.25. The legislation is unlikely to go anywhere in the Senate, but if this were to become law, what would the Constitution? consequences be? Well, I think an easy question to ask and to boil it down to the average person's level is to say,

what would happen if your mortgage were to more than double next week or your rent were? There would be serious consequences. You'd have to cut back on other expenses. You may have to find a new home. Some people would be left homeless. And it's the same scenario with more than doubling the federal minimum wage. There may be some places that can handle it in some places that already have a $15 minimum wage. but overall you're going to have devastating consequences.

People losing their jobs, losing their homes, losing the opportunity to get a first job in the door that's going to lead to their advancement up the career ladder. And in the long run, this leaves us with a smaller economy, smaller family incomes, and higher debt. So you say it'll lead to a smaller economy and thus smaller incomes for families. Can you explain that a bit more? Yes, so there's kind of a cascade of consequences that happens here. have fewer workers hired, so employment is lower, you're going to have some shift towards automation, people replacing jobs that workers do with jobs that are done by machines.

Less investment in capital leads to a reduction in output. Another consequence that businesses will enact is to raise prices. That leads to inflation. So not only is it eating away at some of the gains that workers might have if they get a higher wage, but now they're paying higher prices for everything. That inflation turns into feed higher interest rates that causes us to have to pay more on our debt. And it also increases just the general cost that the government pays for their own employees and their own expenses. And in the end, the CBO report, just looking 10 years out, which is kind of the small term consequences, they said that total family income would be $9 billion lower in 2025. And they noted that it affects compound over time. And when you think about that, because we're

really talking about a fundamental shift in the labor market here, how many jobs will be available, what types of jobs will be done by people instead of machines, and do people ever have the opportunity to take that first step, whether it's while still in high school, just out of high school, to get the experience that gives them the potential to be able to do a job that is worth $15 or more per hour. So you've mentioned a few times now that you think that a $15 minimum wage would increase automation. Could you explain? Explain a little bit why you think that would occur and are there any real-life scenarios where the minimum wage was made higher that led to that? Yes.

So why is that going to lead to automation? Well, when you do the math, $15 per hour plus federally mandated taxes and the Obamacare penalty, that works out to an employer having to pay somebody over $38,000 per year to employ them. When you think of some of the lower wage jobs, they simply can't produce that. much. You know, a 16-year-old can't produce that much. Somebody's not willing to take a risk on somebody that has a criminal record or a disability if they can't, they don't know that they can produce that much. And so jobs like cashier checkout, some of the phone call services, those are things that will be replaced with automation. And we've seen this happen at companies like Amazon. There's a reason that they have a $15 minimum wage is because they've been

able to replace all the jobs that produce less than $38,000 a year with robots. that are doing those jobs. And firsthand, I experienced this in Montgomery County, Maryland, where I live, our legislature passed a $15 minimum wage. And immediately afterwards, I walked into the local McDonald's, and I saw that some of the cashiers are replaced with ordering screens. And just last week, I walked into Stams Club, and it wasn't even an option to go in order from a person at the food place.

You had to check out at a machine first, and it turns out two of the four didn't work, had to move from one to the other so you can see this really does have impact and it's going to push towards automation more quickly than we would otherwise see giving workers less chance to adjust. Yeah, you mentioned that local law in Maryland causing more automation. Obviously, this is a federal minimum wage that would be raised, but what kinds of other effects have we seen at the local level where this has taken place? Well, you see crowding out. So employment goes down, places like Seattle. Yes, they've been able to raise their minimum wage, and it looks like maybe they haven't been a ton of consequences.

They're still doing well as an economy, but what's happened is it's created more of a survival of the fittest labor market. And so employers have held on to the employees who are the most productive and have the most experience. But overall employment has gone down because they have cut off the jobs for the lower skilled workers, and they've also reduced hours of some workers. So what's happened to those individuals? Well, a lot of them have gone outside the city limits to get a different job that is lower wages or to get additional hours. And so it's one thing to talk about at a local level, whether or not counties want to implement a high minimum wage. But what happens if you do that nationally and no longer can people just move outside of the sitting limits to find a different job?

There's nowhere to go in the U.S. to find a job anymore. And so this is going to have huge implications. And another point in this whole debate is that Seattle and L.A. and New York City are very different than Little Rock, Arkansas, or places in Alabama. I mean, a $15 minimum wage in those high-income cities is equivalent to $20 an hour in a lot of places across the U.S. And that's simply not affordable there. So the left often makes, for lack of a better term, the living wage argument. They say that, you know, you can't support a family off, you know, less than $1.4.5. $15 an hour, although exactly how they settle on that number, I don't know.

But you've been talking about, like, minimum wage jobs are often young people getting their start. What does research show about who's actually working these jobs? Are these really often people supporting entire families, or is it a more diverse demographic? It's a lot of teenagers. It's hardly any people who are, you know, single mother supporting a family. That's just not the case because you can't make a lot of. the living and support a family on just one minimum wage job. And for those people who are supporting families, the minimum wage is actually not $7.25 per hour,

but closer to $10 to $11 per hour because of the earned income tax credit. And we do have other federal supports across the 90 different welfare programs that are aimed at helping these people. And so who really hurts the most is those individuals that don't have the experience or somehow marginalized, whether it's the inability to speak English, a disability, a criminal record, and then just general lack of experience, those are the people who would be hurt the most by creating a $15 minimum wage. So we also hear a lot from the left that we've seen CEO's salaries, we've seen business as

profit margins, why does the right assume that this means fewer jobs as opposed to CEOs just making less? How would you address that argument? Well, I don't think that the relevance of the CEOs is a big issue here. You know, wages should be driven by productivity, period. We want to let employers be able to pay employees based on what they're contributing to the company, and if an employee is contributing more, they should be allowed to pay them based on that and there are other issues in terms of union prohibitions on that. But what we really should care more about is not what a CEO is making in comparison to somebody else.

else, but are there opportunities for everybody and are people still able to advance and can somebody who starts out in a minimum wage job become a CEO someday? And that's what we want to ensure is there. And the way that you do that is you have a strong, solid economy like we do today. And over the last year, we've seen that the wages of the bottom 10 percent of earners have increased at twice the pace of the top 10 percent of earners. That's exactly the thing that the left wants to see. 6.6% wage growth at the bottom, 3.3% at the top. And that's not from federal mandates or more intervention. It's from less. And so that's what we need to be talking about is what ways can the government get out of the labor market and stop interfering and stop, you know,

killing jobs and opportunities. All right. Rachel Gressler, I appreciate your time today. Thank you. Do you own an Amazon Echo? You can now get the Daily Signal podcast every day. as part of your daily Alexa Flash briefing. It's easy to do. Just open your Amazon Alexa app, go to settings, and select Flash Briefing. From there, you can search for the Daily Signal podcast and add it to your Flash briefing so you can stay up to date with the top news of the day that the liberal media isn't covering.

Two years ago, 13 reasons why debuted on Netflix and attracted controversy because of its depiction of teen suicide. One particular scene stood out. It depicted a teenage girl committing suicide in the bathtub with a child. a razor before her parents discovered her dead body. Well, that scene, which lasted three minutes, has now been removed from the episode. You can't find it on Netflix. The new version of the scene shows the teenage girl, Hannah, looking herself in the mirror before her parents suddenly find her dead. The show's creator, Brian Yorkie, explained his reasoning to the Hollywood reporter, quote, Our creative intent in portraying the ugly, painful reality of suicide in such graphic

detail in season one was to tell the truth about the horror of such an act and to make sure no one would ever wish to emulate it. But as we ready to launch season three, we've heard concerns about the scene from Dr. Christine Moutier at the American Foundation for Suicide Prevention and others and have agreed with Netflix to re-edit it, end quote. He concluded, we believe this edit will help the show do the most good for the most people while mitigating any risk for especially vulnerable young viewers. So, Kate, your thoughts on the move?

I think it's good, but I also remain troubled by the show overall. I didn't have particularly strong feeling. I mean, it sounds like an awful thing to show. But, you know, when this show was released, there's a lot of controversy because a lot of people, including experts, were concerned that this would lead to an increase in suicide. And I think the important thing to note here is Netflix's decision. comes after a study, which suggested that there was a link between 13 reasons why and teen suicide rates. The New York Times reported, quote,

a study published in the journal of the American Academy of Child and Adolescent Psychiatry, found that suicide rates spiked among boys, age 10 to 17, and the month after the release of the first season. That month, April 2017, had the highest overall suicide rate for boys, in that age group for the past five years, the study found. So I think this is something where, okay, we have free speech and everything, but Netflix only chooses some shows. And I think a lot of people said there's credible reason to believe that this is going to

backfire and this is going to increase suicides. And I think we now have even more reason to believe that. And I kind of wish Netflix would just remove the show. Yeah. And a key factor in these shows is how are they? framing the suicide? Not just that it's there, but how are they interpreting it? What impression are we supposed to get from it? Are they glorifying it? Are they reveling in it? I don't think... From what I've heard, 13 reasons why, had a lot of suicide focus in the show.

And, you know, when I think of other movies, I don't know if you've ever seen a Dead Poet Society. Haven't. Robin Williams, you know, one of the students in that movie commits suicide. And it's It's a very painful thing, but there's a purpose to it, and it's not glorifying suicide. You really have a trust when you're someone like Netflix and you've got kids watching. You know, you have a trust, you have a responsibility, not from the government or anyone legally, but I think a moral responsibility to make sure that you're not showing stuff that is going to push kids toward suicide. And so I do appreciate them removing the scene.

Yeah, and I think to be clear, from what I haven't seen, show. I'm not interested in seeing this show. From what I've read about it, their intention was not to glorify suicide. I believe they've explicitly said, you know, we hoped by showing how horrible suicide is. It's, you know, not a painless thing, especially the way that this character chose to do it, that it would further discourage. So I'm willing to grant them that their heart is in the right place, but I think the question here is like, I don't think, my understanding, at least, So the first series is that it sort of goes back and explores why a girl committed suicide. And as I recall, instead of discussing like how depression and other things feel that they sort of

focus on the quote unquote reasons, which of course, it's not necessarily that people weren't nice to her. It's that people weren't nice to her. And she had, you know, this fictional character, a mental disease that made her unable to put that in perspective and realize, you know, there's other things in life. So in that sense, they sort of implied that suicide was an answer to your problems rather than raised mental health awareness. But I think the broader thing is, yeah, so I was looking at this up and CNN said, quote, Suicide is the third leading cause of death for American youth between the ages of 10 and 24. And it results in approximately 4,600 lives lost each year, according to the Centers for Disease Control. And that's just the sort of thing that I think shows you that suicide is on the rise in this country.

And I don't think teenagers are necessarily cut out to have catharsis about suicide through art. I think they should be discussing it with their therapists, with their parents, with teachers. Like, obviously a huge number of teens have to process suicide. But I don't think that like a somewhat sympathetic TV series is the way to go about providing appropriate support. Well, interesting take, and we will leave it there. Thanks for listening to The Daily Signal podcast, brought to you from the Robert H. Bruce Radio Studio at the Heritage Foundation. Please be sure to subscribe on iTunes, Google Play or SoundCloud, and please do us a review or rating on iTunes to give us feedback. We'll see you again tomorrow.

The Daily Signal podcast is executive produced by Kate Trinko and Daniel Davis. Sound design by Lauren Evans and Thalia Ramprasad. For more information, visit DailySignal.com.