Minimum Wage, Free Education, and Outsourced Jobs

As we get closer to the United States presidential election, four candidates remain. Bernie Sanders, Hillary Clinton, Ted Cruz, and Donald Trump. They all have one thing in common: their positions are radical in different spectra. Bernie Sanders is the democratic socialist, Hillary Clinton the moderate, Ted Cruz the classic conservative, and Donald Trump the ill-spoken, billionaire, liberal conservative. Do any of them have the ability to govern well? That’s a question for another day. The labels I just gave them aren’t conclusive, nor do they accurately represent the candidates. A few words can never do that. In order to fully understand a candidate’s potential you must examine their previous voting records, their proposed policies, and their stances on particular topics. Anyone using these labels in conversations or debates is ill-informed and has a mental ineptitude deeper than their political incompetence.

Calling Bernie Sanders a socialist is somewhat unfair. He won’t dismantle capitalism, because he can’t. Removing capitalism would destroy the western world and no rational working person would agree with that ideology. But he can attempt the next closest action: reducing income inequality. There are a number of ways he will try this: raise taxes on the 1%, raise the federal minimum wage, and provide free college education to everyone, legislation he believes will boost the economy, reduce inequality imbalances, and provide millions with educations they couldn’t otherwise obtain because of financial restrictions.

Wouldn’t that be the ideal outcome? It would, if it worked that way. In a capitalistic society the greater goal is increasing economic prosperity. If everyone earned in excess of livable wages, we could theoretically solve a lot of the issues discussed in common American discourse. But idealization rarely falls within the confines of reality and therein lies the problem with Senator Sander’s philosophy.

In order to fully grasp the ramifications of his potential actions, let’s examine a failed attempt at a socialist state. Fidel Castro’s communist regime alienated the middle and upper class Cuban citizens in the 1960’s. By claiming, dividing, and redistributing wealthy landowner’s property, reducing the cost of living for low-income citizens, and increasing taxes on the wealthy (among a number of other pro-impoverished legislative acts), he gave the educated, wealthy, and skilled citizens a reason to leave Cuba, which they quickly did in a matter of a couple years. What was left? A country with an unskilled populace, souring economy, and counter-socialist rebels. Why would our situation be any different?

Let’s say we raised federal minimum wage to $15, brought back the 2.7 million jobs we outsource to 3rd world countries, increased taxes on everyone (we can’t only tax the 1%, more on this in another article), and provided free education to all our citizens. Where would that get us? Those working 40 hours per week on $15 would make $30,000 per year before taxes instead of the minimum ~$15,000. As it stands, that would increase post-tax amounts from ~$13,000 to ~$26,000.  But increasing taxes to support a fully provided education system means that $26,000 might actually be $24,000. Taxing only the 1% at a reasonably higher rate (without backlash) won’t provide nearly enough money to fund this free education system, so the rest needs to come from everyone. Now this hardworking, 40-hour-per-week, minimum wage citizen makes $24,000 per year. This is hardly a living wage in the current economy. But this isn’t where it ends. Because we brought back those 2.7 million jobs, businesses are required to pay their new workers much higher wages than what they were paying 3rd world workers. This means the cost of running a business is much greater, less margin for profit, which raises the prices of products in every sector of the economy. Any increase in commercial prices means the minimum wage raise to $15 is valued at that percentage increase less. In addition, residential house prices would increase because there would be a higher demand than there was before. So in reality increasing minimum wage, bringing home jobs, and increasing taxes raised net income, but also raised the cost of living.

We’re required to finish high school. It’s the law, therefore we’re obligated to follow it. This means our admittance is also required by law. A free college education system brings with it the same requirements. If something is free, that means everyone is entitled to it. Not only will this greatly increase (by a very large margin) the number of college attendants, this will require a vast influx of highly educated professors and dramatically devalue the provided education. The reason why skilled jobs are difficult to obtain is because companies value education and years of rigorous coursework. Not any regular person is capable of doing those jobs without the proper training. Trying to provide those educations for free will ultimately reduce a four year degree to the equivalent of a high school education; all you can do is work retail.

Many of these assertions require more detailed explanation, too much for one article. Explanations will come in further posts, breaking down each point in this article.


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