Ashley Carter of the Independent Women’s Network and I spent Equal Pay Day with some young women (and a few men) at a coffee shop in Harrisburg, Pa.
We were there to discuss the “facts” promoted by those who want government bureaucrats to become more involved in setting wages in the private marketplace.
Though it was not on our discussion agenda, the minimum wage came up. After the discussion, the young man who managed the coffee shop said he couldn’t help overhearing what we were saying. He wanted to tell us why he opposes minimum wage hikes: he started working at the coffee shop several years ago at a very low wage, worked hard, gained skills, and is now earning more than twice his starting salary.
He said that a high minimum wage might have kept him off the first wrung of the ladder.
It would be great if more people, especially people in politics, grasped this basic economic principle (along with the secondary principle: in addition to the wages, you acquire skills in that all-important entry level job; then you move up and earn more). Here is the first thing I read this morning in the Wall Street Journal:
Just in time for Wednesday’s nationwide walk-out by fast-food workers to demand a higher minimum wage, Hillary Clinton emailed supporters this week to complain about pay differentials in American business. According to Reuters, Mrs. Clinton griped that “the average CEO makes about 300 times what the average worker makes.”
Of course, as with most things Clinton, there is an element of irony here:
Many of these CEOs can only wish they were rewarded for their time as handsomely as Mrs. Clinton is. The expected 2016 Democratic presidential nominee has been paid as much as $300,000 per speech.
Supporters of Wednesday’s worker rallies are hoping that Mrs. Clinton will endorse their demand for a $15 minimum wage. That’s more than double the current federal minimum of $7.25. And for the sake of argument let’s assume that $15 per hour is what event staff were paid at the venues where Mrs. Clinton spoke. We’ll also assume about 90 minutes of her time for a speech plus a question-and-answer period. Mrs. Clinton’s fee in this scenario would be more than 13,000 times the earnings of the typical worker.
Not many CEOs can come close to scoring that high on the Hillary Ratio—the difference between the highest-paid worker and the typical worker in a given situation (or you could think of this as the gap between Clinton rhetoric and Clinton reality).
Mrs. Clinton said in her Sunday campaign video that the “deck is still stacked in favor of those at the top,” and she would know based on her taste for amenities and expenses along with her speaking fees. “She insists on staying in the ‘presidential suite’ of luxury hotels that she chooses anywhere in the world, including Las Vegas,” the Las Vegas Review-Journal wrote last August. “She usually requires those who pay her six-figure fees for speeches to also provide a private jet for transportation—only a $39 million, 16-passenger Gulfstream G450 or larger will do.”
And one other irony:
There’s one more way she and husband Bill have stacked the deck in their favor. The average worker—if she could even dream of pulling down $200,000 for an hour of work—would pay taxes on this income; Mrs. Clinton often doesn’t.
By routing speaking fees through their family’s foundation, the Clintons ensure that the money won’t be taxed before it is directed to support foundation travel, meals and promotional events, among other things. The highly compensated political influence peddlers at the top of the untaxed sector of the U.S. economy have found their champion.
Yes, Mrs. Clinton knows how to demand and receive exorbitant fees for speeches composed of gracelessly delivered clichés. She receives these fees and other perks based on the possibility that she could be the next president of the United States. (Right now she's playing down her perks and traveling in her own private, Secret Service-driven van. What a drag it must be! For Charles Hurt’s hilarious take on Mrs. Clinton’s ride in the Scooby Doo van, go here.)
What she doesn’t know is nearly as much about economics as the young man I met yesterday in Harrisburg.