The Elite Class in America: Explaining Trump and Setting the Agenda for Democratic Revival

Karl Marx is noted for the theory that capitalism breeds distinct social classes. Evidence came from his observation of 19th century England and Germany. Marx’ followers early on saw United States as an exception. They claimed lack of barriers to mobility militated against permanent classes in America. Constraining capitalism rather than overthrowing it became the objective. That approach informed Progressivism, the New Deal, and it remains in vogue today.

That said, we do have a semi-permanent class in America today––a ruling class of elites who are products of our university system and whose primary ideology is that they and not the people of this country know best. Today the elite control the federal government and our universities. Even Congress is discounted as we see in Barack Obama’s usurpation of powers that previously required Congressional approval.

While early social scientists were not elitists, their theories provided the backbone of today’s elitist ideology:

  • States and localities are too parochial (i.e., too much under the control of interest groups) to deal with important, national issues.
  • Policy implementation requires an entrenched civil service at the national level.
  • The market place inevitably fails to provide for the less privileged and less able and thus must be controlled by the federal government.

Today’s elites believe those who resist the policies promulgated by the federal government are social misfits––racists, bigots, religious zealots, and people trying to hold on to undeserved privilege.

The elite class has found a home in the Democratic Party. While claiming to be the party of inclusion, its policies favor those who have emerged from the chosen channels to claim their place as movers and shakers.

Symbolic of the gap between the elites and the rest of the country is the drive to legalize marijuana. While our nation’s inner cities are ravaged by the drug trade, which results in gang violence and thousands of lives lost to addiction, the elite want to be able to enjoy their pot parties. Visit the campuses of the top-ranked colleges and universities if you have any doubts. As a result, instead of stopping the traffic of heroin and other drugs at our borders, which could be done if made a priority, our legislators protect drug use by the elites and make a superficial effort to conduct the war on drugs.

The problems we face as a society today as a result of the existence of an elite class stem from an ideology/philosophy that conflicts with the principles upon which our country was founded. They justify their power as being deserved by merit, by electoral victories and the application of social science methodologies to address societal problems. But national electoral victories are won with the help of a media industry driven by the same elitist ideology. Then, when push comes to shove in making policy, social science practice and technological potential get set aside. Ideology wins out, which is why political appointees and not civil servants make the ultimate decisions in the federal government.

Donald Trump vs. the Elites

Those who rail against Donald Trump’s views see those who tell pollsters they plan to vote for him as part of the misfit class. In fact, however, the vast majority of his supporters are neither racists nor nutjobs, but people who recognize that their voices are not represented either in Washington or Hollywood. Rather than trying to protect their privileges, Trump supporters (as well as those who favor Carson, Cruz, and some of the other GOP candidates) lack the privileges enjoyed by members of the elite class. Trump supporters are not graduates of America’s elite colleges, they don’t hold high level positions in government or academia, they are not on the boards of huge corporations; nor do they earn six figure salaries at not-for-profit organizations or cultural institutions.

Trumpism represents a problem for the Republican Party because the Party’s leadership shares in the benefits of elitist power. They hold down positions where they earn high salaries, have a voice (every once in a while) on policy, and can avoid the worst of society’s detritus––urban slums and crime, rural poverty, and social malaise.

The past two national elections saw the GOP lose when they nominated moderate candidates who did not excite enough of the disaffected population to defeat the dream candidate. While nominating Trump or one of the other conservatives might energize the disaffected, it also might lead to the kind of defeat that happened in 1964 when the party’s leadership failed to pull out the stops for conservative Barry Goldwater. The sad part of Trumpism is that people accept slogans for policies and seem to want a savior to solve everything for them instead of becoming an ongoing part of the decision-making process.

Pundits say the GOP cannot win behind a conservative––however you want to define that––because they will inevitably lose the minority and female vote. They report the ethnic balance of the country is shifting towards minorities who at the moment see their futures and those of their children tied to the Democratic philosophy.

To win, the GOP must find a way to disabuse minority and female voters of the elitist implications of the Democratic Party’s philosophy. They must ask black Christians why they stick with the party that is hostile to Christianity; why blacks who live in depressed cities ruled by the Democrat Party continue to vote Democratic; why Hispanics who are in this country legally support a party that rewards illegal entry; and why women who chose a traditional role in the family are disparaged in the media?

Does Democracy Have A Future in America?

Other commentators have identified the existence of an elite class in America. One observer, Christopher Lasch, author of The Revolt of the Elites and the Betrayal of Democracy, which came out more than twenty years ago, asked whether democracy has a future. Odd question? Not at all. What Lasch is getting at is that holding elections does not signify the existence of a democratic culture––one in which an educated citizenry determines policy and elected officials represent the interests of those who elected them.

Today’s elite hold a view of democracy in direct conflict with that of our country’s founders. The Founders believed democratic habits of self-reliance, responsibility and initiative were necessary for the establishment of ‘self-governing communities’––not an all-powerful federal government that usurps power from localities, the states and even Congress.

If the Republican Party, independents, or a third party would compete with the elite ruling class, they will have to start at the grass roots level, offering opportunities to average citizens to participate in a process that is not dominated by people at the top. Political “reforms” like open primaries undercut the role of local leaders and should be opposed. Open primaries are another victory for elitism couched as a democratic reform.

The second component of a campaign to challenge the elite is to overcome the mainstream media’s elitist bias. Opponents of elitism need to do more than develop their own alternative media outlets. Those are necessary, but not sufficient. The mainstream needs to be challenged, not catered to. Some of this year’s candidates have been willing to take on the hostile questioning of media chosen moderators. The notion of impartial moderators is in itself a function of elitist ideology. Opposition candidates should only participate in debates where the format allows them to speak to the issues and where “moderators” represent their supporters. Even if the mainstream media fails to cover such debates, people interested in change will find refreshing a willingness to bypass the networks and will tune in.

Third, a campaign against elitism cannot be confined to election cycles. Political activism has to be a 365-day effort, including representation at government hearings, filing freedom of information requests, court challenges, and protest events. As the Tea Party demonstrated, an active opposition movement doesn’t require a national governing group or a ton of money. It does require, however, people who are willing to stand up and speak out. The leaders of tomorrow need to get engaged today without regard to the outcome of the 2016 election. Elitism has a firm grip on power in America. It will take years to re-democratize America.

The Washington Post’s Biased Narrative on Israel

If you read the opinion pages of the Washington Post, you’ll see an imbalance in the views expressed by their in-house as well as guest columnists on Israel. They are uniformly critical of the current government and continue to hammer away on a theme of the need for Israel to give up the territories of Judea and Samaria as well as part of Jerusalem to allow the formation of a Palestinian state. In doing so they are carrying water for the Palestinian Authority and its narrative of what’s going on in that part of the world.

But opinion pieces aside, not everyone recognizes how this bias influences news stories. My goal in this piece is to demonstrate that their news coverage rests on a narrative that is inherently biased against the Netanyahu government.

The piece I’m about to analyze appeared under the headline “Kerry warns of ‘chaos’ if Palestinian Authority collapses,” which appeared on Sunday December 6, 2015 on page A22 of the print edition.

The article, written by Karen DeYoung, reports on a talk John Kerry gave the day before warning Israel bad things are likely to happen if the Palestinian Authority (PA) collapses. Nowhere in the story, however, does DeYoung report the source of that possibility. In fact, she reports that Prime Minister Netanyahu is opposed to such a collapse. So why does Israel need to receive this warning? The danger of the PA’s collapse is something manufactured by the PA as a threat to convince world opinion to increase its pressure on Israel to withdraw its military presence in the territories the media calls the West Bank. Kerry’s warning is like telling a bully’s sister that bad things will happen to her if her brother keeps beating up other kids.

Instead of placing the blame where it belongs, DeYoung picks up another theme of the Palestinian’s narrative to explain the recent violence in which dozens have been killed or injured. Here, instead of blaming the PA for inciting violence against Israeli civilians, she states, “Clashes that began in early fall over a holy site in Jerusalem revered by both Muslims and Jews have ignited a wave of stabbings, shootings and vehicular assaults…” Yes, but the clashes didn’t begin for no reason. They began because members of the Palestinian Authority, including its leader Mahmoud Abbas, incited them with false claims Israel was about to do something to change Muslims’ status on the Temple Mount.

Later in the piece, she writes “Israel . . . has expanded its military presence in Palestinian areas and has allowed the growth of Jewish settlements on territory originally intended to be part of a Palestinian state.” The problem here is the word “originally.” Let’s assume DeYoung is referring to the 1947 United Nations resolution that led to the formation of the state of Israel which included a map dividing the British Mandate for Palestine into Jewish and Arab enclaves. The problem with blaming Israel for not honoring that map is that the Arabs (who didn’t called themselves Palestinians until the 1960s) rejected the boundaries in 1947, and they have rejected them over and over again, most recently by Abbas in 2008. So, how can Israel be bound by a map created 68 years ago that the Arabs/Palestinians have never accepted?

I’ll add one final example showing how DeYoung followed the Palestinians’ narrative. She paraphrases Kerry at the end of her article saying, “increased Jewish settlement activity and the demolition of Palestinian homes in the West Bank ‘are imperiling the viability of a two-state solution.’” But why are Palestinian homes being demolished? Not so that Jewish settlements can be expanded, which is implied. The homes that have been demolished belong to terrorists who have attacked Israeli civilians, soldiers, and police as part of a policy to try to deter individuals from engaging in terrorist acts. If Kerry lumped demolished homes with settlement activity together, DeYoung should have separated them out. They are apples and oranges.

The author of this story can attribute the positions I argue are wrong and biased to the Secretary of State, but that’s a cop out to use a 1960’s phrase. The role of a journalist when reporting on a news event is not only to report what took place or in this case what the speaker said, but also to either talk to other sources when the speaker’s statements are controversial or fly in the face of accepted knowledge or appear self-interested or biased. In this case DeYoung helps Kerry out by drawing from the Palestinian narrative.

I don’t mean to pick on DeYoung because she is not the only Post reporter who has drunk of the Palestinian/Kerry cool aid. It starts with the editorial board, the editorial page editors and flows down into the newsroom. It’s why if you read the Post, do so with the foreknowledge that you will not get unbiased reportage on stories about Israel and the Palestinians.

Footnote: The Post is not the only media organization that is biased on Israel. See “Reuters reports lie that Israel changes status quo on Temple Mount.

Principles vs. Pragmatism: a review of the 4th GOP debate

The Washington Post calls it “Rigid Conservatism vs. a flexible pragmatism.” I call it Principle vs. Pragmatism. Either way, the fourth GOP debate brought out some clear differences that should help people decide which if any of the candidates they can support.

Governance requires a balance of principle and pragmatism, or for those who don’t know what pragmatism means, practicality. Here’s an example from the debate. Ted Cruz wants to eliminate the IRS and move to a flat tax where everyone pays the same rate after a $36,000 minimum. That’s a principled view, but is it practical? The answer is no. We need some agency to process tax returns. We can reduce the size of the IRS dramatically if we simplify the tax code, but we can’t eliminate it entirely unless we move to an honor system where we trust people to be one hundred percent honest about their earnings.

All of the GOP candidates operate from some core principles. The question is how much room do they have for the practical? Libertarians in general discount practical considerations. Therefore, when they apply their principle of smaller government, they end up throwing the baby out with the bath. Example? Defense. Libertarians tend to be isolationists–those who don’t want to see the U.S. “interfere” in messy conflicts like what’s going on in Syria. The problem is if we’re not involved, those with bad intentions get free rein, and the price of interfering later may be a lot higher than if we had gotten in sooner. That indeed is the case with the Obama administration’s failure to act three or four years ago.

An exchange between Marco Rubio and Rand Paul exemplifies what I’m talking about. Paul’s Libertarian principles tell him to back off on interventions and he can site examples where we got our fingers burned when we stepped in without knowing what we were getting into. The Iraq war is a good example, but that doesn’t mean we were wrong to intervene. It just means don’t act without very good intelligence and have clear objectives when you do intervene.

Rubio was right in my opinion on defense spending. We need to be equipped to engage our enemies if and when they threaten our interests. ISIS is a threat. We need a plan and the ability to execute that plan to stop them. That doesn’t mean we don’t need to subject the military budget to the same principle that Carly Fiorina advocates––zero based budgeting. That means instead of taking last year’s budget as the base and decided whether or not to add to it, we start with zero and decide what amount if any goes to each line item. Is it practical? Someone ought to challenge her in the next debate on that very point.

Rubio was also right on the tax code. Senator Paul objected to Rubio’s child exemption because it is an entitlement. Hello America, guess what? The tax code is not only a means of raising the monies necessary to operate our government, but it also has social policy implications whether we like it or not. Let’s use the flat tax to flush out that concept. Assume we impose a 10 percent flat tax as Senator Cruz favors. If we don’t take into account family size, our tax system would be a disincentive to have children. Why? A couple earning $60,000 a year with no children would pay the same as a couple with five children. The same is true if we eliminate the home mortgage and charitable deductions. To do so would militate against home ownership and charitable giving. I was glad to see the Rand Paul recognizes that fact and breaks with his Libertarian comrades on that issue at least in terms of the mortgage and charity deductions.

When a candidate tells you the principle he’s basing his policies on, as Rubio does when he explains why his tax code would be pro-family, we can decide if we agree, but what do we do if the candidate doesn’t fully articulate the principles upon which his policies will be based, or if he shows a lack of understanding of the issues such that he can’t articulate what practical considerations would have to be taken into account. To me that’s the problem with Ben Carson. Not only don’t I know how he arrives at a position, but his answers make me doubt he understands the practical elements involved. The danger of a Carson presidency is that his advisors might also lack the knowledge of the institutions, laws, and policies affecting an issue. That would make him ineffective in trying to change things for the better. They might, for example, ignore the law of unintended consequences. People who lack knowledge and experience in dealing with the tax code, the Federal Reserve, or the federal bureaucracy in general might try to implement changes that make matters worse, creating chaos and confusion when what is needed is clarity, order, and simplicity.

Donald Trump exemplifies a different problem. He says things are bad, and I think most Americans agree with him to some extent, but then he says trust me, I’ll fix things. Again, I want to know the principles upon which his policies emanate. You can’t just be a pragmatist, using “common sense” to fix things because what your common sense tells you on one issue may be different on a different issue. Common sense says we need to simplify the tax code, but you need a set of principles that tells you how to simplify it.

Which candidates best exemplify an understanding of the need to balance principle with practicality? In my opinion the two best are Carly Fiorina and Marco Rubio. What puts them ahead of Kasich and Bush is their ability to articulate that understanding by telling us what principles they are operating under and how they’d tackle the practical side of the matter. Rubio did that on taxes, Fiorina on handling Putin and on our runaway government.

Ted Cruz and Rand Paul are too much of ideologues in my humble opinion. Their attempts to implement their principles would flounder on such practical matters as convincing Congress to go along. Kasich and Bush might run a good ship but neither has what it takes to win the nomination. Kasich seems too anxious, Bush isn’t sure he wants to get down and dirty if that’s what it takes.

Rubio and Fiorina tied as winners last night. They represent the GOP’s best shot at winning in November 2016 because they are principled, but understand you have to have a plan that recognizes you’re not a dictator and need to work in the system to put your principles into policies that work.

A review of Ta-Nehisi Coates’ Between the World and Me

Ta-Nehisi Coates, Between the World and Me (2015)

Between the World and Me, which is structured as a letter to his fifteen year old son by Baltimore native Ta-Nehisi Coates, is a rejection of and an indictment of the United States––its origins, its history, its people. To that end it demands a rebuttal.

No one has the right to deny Coates interpretation of his experience, to deny what it was like growing up as he did in poverty in Baltimore in the last quarter of the 20th century. He eloquently describes the incidents that led him to his negative conclusions about this country, including the odds weighted against him on the street and in school.

Counterposing those experiences, however, was his family life. He was blessed by a grandfather who taught him the love of books and a grandmother who taught him the import of questioning authority. No sane person could have lived that life without coming away with a good deal of anger, nor without the tools to express that anger.

Nor is Coates to be criticized as an outlier in the transcribing the story of the Black experience. As Toni Morrison suggests, he follows in a tradition that include James Baldwin, Amiri Baraka, Malcolm X, and others.

Where does he go wrong? To me it’s defining the Black experience as both unique and intentional. Many groups have had experiences as bad the descendants of slavery. What of the Jews, the Armenians, the Russian and Chinese victims of Communism, the African victims of genocide, India’s outcastes, and many others?

Coates seems to want an answer as a member of a group, which he will argue, is how others have defined him. Yet no time in human history had the rights of the individual without regard to gender or origins been more valued than on this continent on the day our Declaration of Independence was passed. Should we hold against the founders, as Coates does, the fact that their stand was a beginning and not the end of the story of the struggle for liberty for all people?

In terms of intentionality, Coates’ fallacy is blaming people for policies over which they had no control and which many protested. Slavery had its opponents long before the United States became a country. Many died to put an end to it. Whites helped found the NAACP in 1909 and white college students of my generation went to the South to protest segregation. Has Coates talked to Black Southerners who were alive in the 1960s? The changes have been dramatic.

One of the incidents that led to Coates’ unremitting anger was the murder of fellow Howard College student Prince Jones in September 2000 by an undercover police officer. Each one of the similar tragedies that can be traced as far back as you want to go eats at the soul and makes it difficult to challenge the notion that America is not a police state structured to crush Black people for the benefit of “those who think they are white.”

Yet to make this argument Coates has to undercut his own thesis, as the officer who killed Prince Jones was black. Jones’ death can only be described as a reflection of race if one is willing to muddy the waters of rational discourse by suggesting all black police officers are white when it comes to their treatment of blacks.

The problem instead more truly reflects the consequences of charging law enforcement with impossible and often contradictory responsibilities. The most difficult assignment for public officials in general, not just police officers, is operating in our inner cities. Generations living in poverty, where the family structure and other institutions are weak and where crime is a rational choice, have given rise to a hostile, war zone environment for teachers, social workers, bus drivers, meter readers as well as police officers.

Can whites and blacks be blamed for leaving if they could? Coates would like to do so. He recalls seeing white children at ease in a mixed New York neighborhood and reflects on how black children are often told they have to be twice as good. “No one told those little white children . . . to be twice as good. I imagined their parents telling them to take twice as much.” (91)

Coates imagines a lot of things about whites that are just plain wrong. He imagines we make a big deal about being white to the extent we have lost our connection with our ethnic origins. Not true. He imagines we think differences in “hue and hair” are the right way to organize a society. Not for two hundred years. He imagines whites see race “as a defined, indubitable feature of the natural world.” I don’t think I’m alone in seeing only one race––the human one.

Has the fact that Coates grew up in a country that promises much it has not always delivered contributed to the level of his anger? Had he grown up in almost any other country in the world, he would not have had a foundation for his complaints, as nowhere else are people even promised what we are in the United States have been granted. Yes, America has often failed to deliver, but Coates questions whether the promises are genuine. That is his mistake.

Progress has always been achieved by those who believed the rights possessed by others were due them as well. What can you achieve if you give up before the battle has even started?

Hints in Between the World and Me suggest Samori Coates has moved beyond his father. The son’s experience is such that he takes for granted what the father still can not. While the father sees the death of young blacks at the hands of the police as evidence that nothing has changed, the son views those incidents as anomalous. Both would protest, but the son lives in a world where his opportunities are greater, where fewer pay attention to his skin color, and where the promise of the Declaration is closer than ever to belonging to all.

I read Between the World and Me at the suggestion of someone I had criticized for his use of the term “mass incarceration.” I heard that term again during the Democratic debate from the mouth of Hillary Clinton. Loose language and especially inflammatory language used loosely bother me greatly. They are signs that people have stopped dealing with particulars and fail to see the damage that is done by throwing out generalities whose meaning fails to stand up to scrutiny.

Ta-Nehisi Coates is extremely articulate. His phrasing speaks of genuine feeling and a bright intellect, but he also employs a lot of loose language. He sneaks in words whose meaning is inside baseball to those who think like he does.

Here are three examples. The italics are mine:

  • The destroyers (speaking of the police) are merely men enforcing the whims of our country, correctly interpreting its heritage and legacy” (10).
  • “[E]ducators spoke of ‘personal responsibility’ in a country authored and sustained by a criminal irresponsibility” (33).
  • “And today, with a sprawling prison system, which has turned the warehousing of black bodies into a jobs program for Dreamers and a lucrative investment for Dreamers” (131).

Words matter. If the words on the pages of Between the World and Me matter, then the words of the Declaration of Independence matter, the words of the U.S. Constitution matter, and the words of Lincoln’s Gettysburg address, which Coates discounts, matter. It’s unfortunate that Coates disputes that Americans who are not descendants from slavery mean to include Black people when we use the term people, but we do.

If Coates is not satisfied that two and a half centuries of American history have demonstrated a commitment to inclusion, I suggest he take another look. He sees the glass more than half empty. I urge him to talk to people who see it more than half full. They won’t be hard to find.

Empty Phrases, Empty Promises: A Review of the First Democratic Presidential Debate

Mrs. Clinton won the Democratic Party nomination Wednesday night by being the only adult on the stage. She was calm and rational. Jim Webb is in the wrong party based on his foreign policy positions; Lincoln Chafee should go live in Tibet; Martin O’Malley won’t even win the Maryland primary that’s how little the Democrats who know him think of him; and Bernie Sanders doesn’t live in the real world, but I have to give him style points for his theatrics. Let’s examine the issues.

 

  • Free Public College Education: How do you think the country’s hundreds of private colleges and universities feel about that concept? It will put most of them out of business as well as cause enormous problems because why would anyone even apply to a private college? The public institutions couldn’t handle the load, but even trying would double or triple whatever cost Sanders and O’Malley think they can cover by raising taxes on the rich.
  • $15 minimum wage: How can you complain about the high unemployment of blacks and Hispanics and then favor a policy that will guarantee even fewer will find jobs in the future?
  • Reforming the Criminal Justice System: May I point out incarceration rates have been on the decline, but the notion that anyone is in prison for smoking marijuana is total fiction. You can be sent to prison for selling very large quantities of marijuana, not for smoking a joint at a frat party or even on a street corner.
  • Comprehensive Immigration Reform: Let’s begin by admitting that 11 million or so illegals are here because our policies of the past fifty years virtually invited them to attempt the journey. Now we’re going to increase their benefits and people living in poverty in Mexico are going to stop trying to come here? Really!
  • Climate Change: The thing that always gets me about this issue is that the environmental organization spokespeople tell us it’s already too late to prevent things like the flooding of Manhattan. All that makes me want to do is not buy property in Manhattan.
  • Reign in Wall Street: Wall Street is a shortcut term for whomever the candidates want to blame for something bad. Sometimes it means corporations. Do they include Microsoft, Google, Apple, Facebook, Twitter, etc.––the MAJOR source of job growth in the economy over the past two decades? If not, they can’t attack Goldman Sachs and the other financial institutions. Why? If they didn’t exist to finance those high tech companies, Bill Gates and Steve Jobs would never have been able to leave their garages. Wall Street must mean big banks, but banking is one of the most highly regulated part of our economy. That doesn’t mean an occasional rogue individual doesn’t take advantage of a loophole, but most of what big banks do is both legal and necessary. Banking allows individuals and businesses to function, which benefits society and by the way results in more taxes to finance the federal government.
  • Reign in Insurance Companies and Pharmaceuticals: Without health insurance, our society would be hampered by tens of thousands of families each year going into debt to pay medical bills; without pharmaceuticals we’d be suffering more and dying sooner. That’s awful. Let’s crush them.
  • Lobbyists Control Congress: That’s correct. Here are the worst offenders: AFL-CIO, AARP, and NEA.
  • Gun Control and holding manufacturers responsible: We hold auto companies responsible for manufacturing defects, not if I drive my car into a ditch because I was texting. That’s the only standard that can work. Holding gun manufacturers responsible for how their products are use is absurd. In terms of reforms that would make it more difficult for people with mental illness and criminal intent to obtain weapons, I’d be in favor if it can be done without violating the U.S. Constitution.
  • The Decline of the Middle Class: For half of Sanders’ 40 years of decline we’ve had Democratic presidents: Carter (4), Clinton (8), and Obama nee Barry Soetoro (7). But beyond that what is the cure? Sanders would tax the “rich” to pay for public works jobs. How did that work with TARP? Shovel ready jobs weren’t and make-work projects were invented so that individual states got their share of the money. O’Malley would increase education spending, but college grads are already having trouble finding jobs. Clinton would do a little of this and a little of that, but nothing that adds up to the simple truth that businesses, not presidents, produce jobs.

 

Here’s what we need: Teach entrepreneurship in high school, provide internships for young people to see how businesses work, and clear the regulatory climate to enable people to start and expand businesses. Right now, going over 50 employees is not worth it. College and community-based incubators, technical assistance and other programs can help young companies get over the initial hurdle, although not all will succeed. One thing we cannot do is pretend the best way to grow the economy is to expand the public sector.

The Democrats offered empty phrases that can’t stand up to scrutiny and they offered empty promises that they cannot deliver on. What’s their plan B? Blame the Republicans.

The Price of Compassion, Part II

One of the ways the Washington Post works an issue is to frame a topic in terms of individual lives. A good example is the story in the Sunday September 13th Business section entitled “The Power of One More Dollar.”

The story amounts to a campaign piece on behalf of the $15/hr. minimum wage told through the life of a Guatamalan couple living in a basement apartment in Washington, D.C. The woman is trying to save $7,000 in order to send for her thirteen year old daughter so she can get an education in the U.S.––a noble ambition for sure. Laying out the families economics, the reporter––Lydia DePillis––explains how each dollar more per hour that Dalia Catalan earns means an extra $160/month that can be saved toward that end.

The Catalan family example, however, punctures a hole in one of the cornerstone agruments on behalf of the $15/hr. minimum––the notion that the current minimum, which in D.C. is $10.50/hour, is not enough to support a family because it shows that the typical minimum wage earner does not have to support her family on her or his salary alone. In the Catalan’s case, there are two wage earners plus they share the cost of their apartment with a second couple.

But the huge missing piece of information DePillis left out of this article is whether the Catalan’s are in the U.S legally or not. Since that question is never addressed, one must assume they are here illegally and their two-year-old son is their “anchor baby”––the means by which they hope to gain legal standing to remain in the U.S.
The Post’s story supports my contention that the $15/hour minimum will have a negative impact on economic opportunity for low income American citizens. The author interviews one employer who states that higher minimum wages hinder his ability “to take on the really hard to hire.” In other words, the higher the minimum wage, the harder it will be those who need jobs the most, primarily young minority men, to find them.

One person quoted in the story blames employers for cutting hours in the face of higher minimums. That attitude speaks to my assertion that most people, including most journalists, have little understanding of small business economics. They assume all business owners are rich and that they could increase wages if they weren’t so greedy. That’s a convenient ideological cubbyhole in which to place the blame, but let’s look at the facts.

First, we’re not talking about $1 more per hour to reach $15/hour, but in D.C. $4.50 more per hour or $180 more per week in gross salary. Add in taxes and mandatory benefits, including Obamacare, and we’re looking at $15,000 or more per employee annually over their current pay. That kind of increased cost for just a handful of employees would wipe out the entire profit for many business owners, which is why many will have to lay off empoyees or cut their hours.

No one should blame the Catalans for the choices they’ve made. Dalia says they’re better off here than they were at home. Plus, are unemployed American citizens going to clean hotelrooms like she does? But as a society we’re still making it too attractive for people to come here illegally, disadvantaging citizens as well as those who are applying to come here through the legal immigration process.

How long can we do what feels good without examining the real costs? Is it fair to help those who are getting the raises at the expense of others––namely, those who will be laid off or have their hours reduced and those who can’t find a job?

We also should examine the motives of those who advocate the $15/hour minimum. Who benefits the most? Certainly the politicians who can pretend they’ve done something good without telling the public the full story. Certainly union bosses who can use the $15/hour to leverage raises for their members. Maybe DePillis will tell a union boss’s story next week. How do their family budgets work out on their union salaries? And what about the religious Left––they too benefit because advocating a minimum wage increase is a cheap way to feel good about oneself since it doesn’t require addressing the more difficult problems facing our society.

The high cost of the $15/hour minimum wage

Leftists led by America’s labor unions are winning support in major cities from Seattle to New York to raise the minimum wage to $15/hour. Their rationale is the living wage theory, claiming people can’t live on less and therefore government needs to step in. Compassion is nice except when it harms the targeted recipients, which is the case here, but we shouldn’t be surprised that the Left and Labor Unions are doing damage to the very people they claim to care about. This is not the first time they have betrayed the “working class.”

People hold minimum wage jobs for a reason––some work part-time while going to school or to supplement a primary job; others hold a minimum wage job while looking for something better, while still others are entry level workers gaining experience with the promise of moving up in a company, and some simply fail to qualify for higher paying jobs. The $15/hour movement hurts all of the above.

Evidence is starting to roll in on the impact of the minimum wage raises passed in Seattle, San Francisco, and L.A. (See “A Post-Labor Day, Minimum Wage Hangover,” by Andy Puzder, WSJ, 9/7/2015.) While a few get higher pay, thousands are losing their jobs as the higher wages have lead to businesses closings, employers investing in labor saving technology or making do with fewer workers.

The sad part of the job loss caused by the $15/hour movement is that it has the greatest negative impact on young people and minority workers. With the labor participation rate already in the low 60% range and 6.5 million Americans working part-time because they can’t find fulltime work, a $15/hour minimum will make it that much harder for young minority job applicants to find work.

Leftists are prone to attribute job loss to business owners, but that’s like blaming car manufacturers for charging customers the cost of government imposed fuel standards. Many employers facing a $15/hour minimum will have no choice but to lay people off or go out of business.

Unfortunately, the average person has little understanding about how businesses work. They have been led to believe business owners can afford the raises, but are greedy. The truth is just the opposite.

Consider the restaurant industry. As anyone who watches the popular Food Network show Restaurant Impossible can tell you, people open restaurants without sufficient management experience. They’ve been taught by the media (movies and sit-coms are the worst offenders) all you have to do is open your doors and the profits will roll in. The restaurant industry is highly competitive, which means anyone saddled with high labor costs is automatically in trouble.

I blame liberalism (or progressivism, if you prefer) for the public’s lack of knowledge about small business economics. Typical is the Labor Day column that appeared in the Albany Times Union, written by a retired SUNY professor who undoubtedly never had to meet a payroll, which described today’s business owners as Robber Barons. The reality is rapid, continuous changes in technology and the world economy have made it extremely difficult for large corporations to meet their goals. Top executives often pay the price, as few last more than a few years. Nor is it much easier to run a restaurant, print shop, laundry, construction company, or any other of the hundreds of businesses that employ fewer than 50 people.

A small business with 50 employees would have an annual payroll in excess of two million dollars if the lowest paid workers earned $15/hour. Labor costs for small businesses can range from one third to two-thirds of expenses, and when business is slow, many an owner has to forego pay and/or take out a home loan to tide their business over.

Labor costs depend on each worker producing value in excess of his or her wage and, if labor costs increase, it’s not always possible to raise prices. To do so, may cost customers, which is the beginning of a death spiral for that business.

By definition, minimum wage jobs add minimum value to the bottom line. Although the workers may have skills they aren’t using, the job may not require those skills; hence the employer can only pay what workers brings in, not what they potentially could produce in another job or what they need at home.

Historically, labor unions take no responsibility for the consequences of their demands. The car, chemical, and steel unions nearly destroyed their industries by pushing up costs, while undercutting innovation and quality. Remember Ralph Nadar’s expose of the Chevy Corvair? The UAW took no responsibility for that death trap, but they were as responsible as GM management.

For years, unions won concessions from managers who should have acted more like robber barons, but instead gave in to union demands in hope that future revenues would cover future costs. That resulted in deteriorating product quality and opened the door to foreign competition from which we never recovered.

There is only one solution to the problems of Americans who need higher wages to meet today’s living costs––an expanding economy that produces more higher paying jobs. The steps that need to be taken to achieve that are outside the scope of this essay, but it has to be noted that there are always plenty of job openings for skilled people. Yet, those jobs require candidates possess specific credentials, which puts the burden on young people still in school to study subjects that can lead to employment and on the unemployed to take advantage of job training programs. Some of today’s minimum wage workers are where they are as a result of personal life choices, such as drug abuse, dropping out of school, and other self-inflicted wounds.

Compassion is not the sole province of Union leaders and Leftists, nor is it compassionate to advocate policies that harm those you claim to support. What sounds good needs to be subjected to rationale empirical-based analysis. The $15 minimum wage is simply bad policy because it will cost people jobs, and force businesses to close or to fire current employees. It should be vigorously opposed.