Why would you vote for a candidate who advocates fewer job opportunities for low-skilled workers, or who favored policies that would cause the price of consumer goods to dramatically increase and trigger a recession, or who would stifle economic growth and innovation. The facts are that you probably would.
February 21, 2016
Here are some issues you should think about when you are choosing a candidate for political office. It could be for any office: city council, county office, Congress, Assembly, president.
- Would you vote for a candidate who advocated fewer job opportunities for low-skilled workers?
You would be shocked to discover that many politicians favor policies that destroy job opportunities for workers who haven’t yet developed skills needed by employers. These entry-level workers need jobs where they can learn how to work in a business environment and develop skills necessary to deal with fellow workers, bosses, and customers, where they can learn responsibility for an assigned task, where they can learn the need for punctuality and diligence in the workplace, and discover the dignity of a paycheck and pride in accomplishment.
Not everyone has these skills, yet employers are willing to employ these workers and give them that opportunity to better their lives. It’s a start.
The sad truth is that many politicians favor controls that arbitrarily set wages at levels higher than what many employers can afford to pay these workers. The restaurant industry is typical of these employers. It’s not that these business owners wish to charge low wages, but rather they cannot afford to do that because they know their customers are only willing to pay a certain amount for their meals and that their competitors will try to attract customers away if they can’t compete on costs. In fact, it is we consumers that set those wages by making choices of which restaurants to patronize.
Recently when Seattle imposed a $15 an hour minimum wage increase, some restaurants went out of business, and an estimated 1,000 restaurant workers were immediately let go. This minimum wage law not only reduced employment, but it discouraged the growth of new restaurant businesses that would hire low-skilled workers who would be willing to work for less.
And it’s not just restaurants.
- Would you vote for a candidate who favored policies that would cause the price of consumer goods to dramatically increase and trigger a recession?
No one wants to pay $30 for a $15 t-shirt, for example. We consumers want the best products for the cheapest price. If we think we are getting a mediocre shirt for too much, then we won’t buy it, or, if we do, we want it cheap. That drives manufacturers nuts because it forces them to compete for our dollars. The result: you can pay whatever you want for a t-shirt and decide yourself about quality and price. You can pay $15 at Costco or $200 for a designer label at Nordstrom. You choose. The bottom line is that your choices drive competition and the price you pay, not the manufacturer.
So retailers go to manufacturers to find the cheapest cost of production to meet the standards you want in a t-shirt. The mills in New England went out of business because labor costs were too high there and manufacturers took their jobs down South where land and wages were lower. All because you wanted lower cost goods.
Well, you know the rest of the story. They went to China, Indonesia, Vietnam, Philippines, Mexico, and India looking for the best prices because that is what you want.
And a marvelous thing happened. First of all, countries like China and Vietnam ditched their socialist orthodoxy and they climbed out of poverty. Capitalists (mostly foreign investors) provided capital, entrepreneurs created businesses, and millions of workers found good paying jobs.
The other thing was that instead of U.S. employment or economic growth going down, it went up. Because goods were cheaper, we all had more money to spend on other things. As well, entrepreneurs created new industries and new businesses that offered jobs paying good wages and our standard of living increased.
Some politicians want to choke these economic benefits by shutting down foreign trade. Mr. Trump is the candidate most loudly advocating that disastrous policy. He claims that China and Mexico are “killing” us economically and that we are fools for letting it happen. Nothing could be farther from the truth. If we take his advice, we will trigger a worldwide depression. (See: Great Depression; Smoot-Hawley Tariff Act).
Don’t let these guys fool you. Foreign trade is good for you and America.
- Would you vote for a candidate who would stifle economic growth and innovation?
We have the most vibrant and innovative economy in the world. We have a system which incentivizes clever people to invent new products which, they hope, we will want. These inventors and entrepreneurs know that if you like their products, that they will prosper, and, they hope, grow rich.
My favorite example of this is my iPhone. I love my iPhone. Who would have imagined a few years back that we would have a device in our pockets that connected us to everyone and everything in the world? Steve Jobs of Apple revolutionized the industry by perfecting the smart phone, a device so attractive and well-functioning that it has attracted hundreds of millions of users around the world and has elevated Apple to almost cult-like status.
Mr. Jobs became a billionaire as a result. Did he have billions of dollars stashed in a bank or in his vault? No. It was mostly in shares of Apple and Disney stock (Disney bought Pixar which he helped start).
Some candidates for president want to destroy the incentives that have propelled Steve Jobs and thousands of other entrepreneurs to create products that make our lives better.
Bernie Sanders would vastly increase taxes on these successful people. He would take more than half of their annual income. He would take more than half of their wealth when they die. He would increase taxes on their corporations, already the highest rate among the top 34 countries (35%). He would increase the capital gains rate for the rich to more than 50% versus the current 20%. Some say the capital gains rate is the main incentive for entrepreneurs to gain and keep their wealth. By the way, these one percenters already pay 45% of all income taxes.
After Bernie is finished we would be more like France taxwise, resulting in high unemployment and a stagnant economy like France.
Hillary’s tax plan isn’t much better. Both Bernie and she obfuscate the fact that everyone’s taxes must go up in order to pay for their programs.
It’s your choice in the voting booth. Make sure you know what you’re doing. These unintended consequences will kill us.