At the first night of this week’s Democratic presidential debates, candidate Pete Buttigieg claimed it was anti-Christian not to drastically raise the minimum wage.
Buttigieg, however, failed to note the specific federal minimum wage hike from $7.25 to $15 per hour he and most other Democratic presidential candidates support could lead to disastrous consequences, with the Congressional Budget Office warning the increase could cause 1.3 million jobs to be lost.
The federal minimum wage hike is a longtime progressive plan that in the past was marketed as a “living wage.” The living wage scheme, deployed in the past locally, has a history of hurting small businesses, negatively impacting local economies and decreasing employment opportunities for low income workers. Indeed, the living wage has monumentally failed during numerous high profile trials.
The living wage was a legacy project of the controversial former group known as ACORN, or the Association of Community Organizations for Reform Now, which played a central role in enacting the scheme in several cities. It was backed by a who’s who of radical leftwing groups.
At the debate, Buttigieg got in a dig at “so-called conservative Christian senators” for refusing to back a House bill that would raise the federal minimum wage for the first time in a decade from $7.25 to $15.
Buttigieg complained: “The minimum wage is just too low, and so-called conservative Christian senators, right now, in the Senate, are blocking a bill to raise the minimum wage, when Scripture says that ‘whoever oppresses the poor taunts their maker.’”
Like most Democratic presidential candidates, Buttigieg has pledged to work to raise the minimum wage to $15 if he is elected president.
The current bill and the general progressive push for the hike to $15 is the modern day, rebranded inception of the so-called living wage.
As this reporter has previously thoroughly documented, the concept of a living wage got its start in the mid-1990s in Baltimore, when a coalition of left-leaning church leaders, unionists and other groups were able to persuade the City Council to raise the base salary from the federal minimum of $4.25 an hour to $6.10 for city employees and local companies contracted by the city.
Paying careful attention was Jen Kern, an ACORN organizer, who then attempted to bring the so-called living wage to several other states after studying regulations and court decisions to find locales where ACORN could work to raise the minimum wage beyond the federal minimum.
ACORN said that it disbanded in 2010, six months after undercover video footage infamously showed some of its workers giving tips on how to cheat on taxes. However, some of ACORN’s biggest chapters, including its branches in New York and California, rebranded themselves under new names and continue to be active.
An extensive January 2006 New York Times magazine profile documented how ACORN’s Kern worked to mount ultimately unsuccessful campaigns to raise the minimum wage in Denver, Houston and the state of Missouri.
However, ACORN was successful in 2004 and then again in 2006 in Santa Fe, where the ultra-liberal city council enacted what became the highest minimum wage rate in the country at the time – $9.50 an hour. ACORN soon set its sights on attempts to bring the living wage to Arizona, Colorado, Michigan, Ohio, Montana, Oklahoma and Arkansas.
ACORN’s living-wage campaign website is still active.
The ACORN site documents the radical group’s successes in advancing the living wage:
Over the last decade, ACORN chapters have been involved in over fifteen living wage campaigns in our own cities, leading coalitions that have won living wage or minimum wage ordinances in St. Louis, St. Paul, Minneapolis, Boston, Oakland, Denver, Chicago, Cook County, New Orleans, Detroit, New York City, Long Island, Sacramento and San Francisco.
Contributing to the living wage campaign was the George Soros-funded Brennan Center for Justice at New York University’s law school. The Center’s lawyer, Paul Sonn, took a leading role in helping to craft wage ordinances and ballot measures for numerous cities and states, the Times reported.
ACORN also worked in the 1990s with a coalition of other left-wing groups pushing the living wage agenda, including the Industrial Areas Foundation. The Foundation was the main organizing outfit of radical community organizer Saul Alinsky.
The living wage was also heavily pushed by the Soros-financed Tides Foundation, which is one of the biggest backers of far-left causes in the U.S. Organizer Wade Rathke, who founded ACORN in 1970, was a founding board member of the Tides Foundation and continues to serve as an adviser.
Also, this reporter previously documented that the socialist-leaning New Party was instrumental in living wage lobby efforts in Baltimore. The living wage campaign was one of the main platforms of the party. The New Party and ACORN worked closely together. The New Party, which went defunct in 1998, supported former President Barack Obama’s early political career in Chicago.
Santa Fe: Massive cost for businesses, declining revenue, hiring ceilings
In Santa Fe, where the living wage was enacted, Robert Pollin, an economics professor at the University of Massachusetts Amherst, served as an expert witness for the city in a lawsuit brought by local businesses worried about the effects of the living wage campaign.
Pollin conceded that the project would cost local businesses a total of $33 million to cover the wage increases, and that, as the Times related, “restaurants and hotels and stores would probably need to raise prices between 1 and 3 percent.” Still, a state judge ruled on behalf of the city and allowed the living wage to be enacted there.
Months later, the law’s negative consequences were already on full display, as documented in a preliminary report on the matter issued by the University of New Mexico’s Bureau of Business and Economic Research.
The Bureau found that an exemption to the living wage law for businesses with fewer than 25 employees prompted local businesses to avoid exceeding that amount, meaning less workers were being hired. Also, some businesses reported that workers from outside cities were drawn to Santa Fe to get the higher minimum wage.
In a damning revelation, the report documented that the cost of living in Santa Fe increased by a staggering nine percent, while the city’s gross receipts declined since the enactment of the living wage law.
Baltimore: ‘Crash and burn’ after living wage enacted
Back in Baltimore in the 1990s, meanwhile, the original template for the modern living wage campaign was an abject failure.
Writing in 2003 in City Journal, which touts itself as nation’s premier urban-policy magazine, Steven Malanga highlighted how the living-wage campaign in Baltimore in the 1990s was a significant factor in the tanking of the city’s economy.
Far from turning into a workers’ paradise, Baltimore saw its economy crash and burn during the mid-1990’s, with 58,000 jobs disappearing, even as the rest of Maryland added 120,000 jobs and other cities across the country prospered. The living-wage bill was just one expression of a fiercely anti-business climate that helped precipitate Baltimore’s economic collapse. Sensible observers would call Baltimore in the nineties an urban disaster, but to the nascent living-wage movement, the city became the poster child for future activism.
Indeed, the city’s unemployment rate in the mid-1990s was double that of the rest of Maryland.
Seattle: Minimum Wage Hike ‘Hurting Workers’
A University of Washington study reviewed the effects of a 2016 minimum wage hike in Seattle to $13 (it was again increased this year to $15 in keeping with a law passed by the liberal Seattle City Council), finding the hike actually resulted in lower wages for low-wage earners.
“Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent,” the authors of the study found. “Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase.”
The study results contrast with another study done by the University of California, Berkeley that found “no significant disemployment effect” on Seattle restaurants for increasing the minimum wage to, as the New York Times characterized it, a “level that is about half or less of an area’s typical wage.”
However, Jillian Henze, a spokeswoman for the Seattle Restaurant Alliance, expressed alarm over the University of Washington study’s negative findings and said the data comports with what she was hearing.
“We think the U.W. study needs to be taken seriously by the city because the data echoes the anecdotes we’ve been hearing,” said Henze.
Big Businesses Replacing Workers with Machines
Forbes reported on what it termed the “ugly side” of the minimum wage movement, contending it has been “disconnecting pay from performance, turning business enterprises into welfare agencies.”
The magazine reported on a general nationwide trend of major firms replacing workers with machines as the minimum wage increases:
So, when the government hikes the minimum wage, corporations change the way they produce things, replacing workers — who are now more expensive — with machines, which usually become more efficient and less costly overtime.
In response to minimum wage hikes, for instance, major retailers like Wal-Mart and Target are already replacing cashiers with self-checkout counters. Restaurant chains like McDonald’s and Panera Bread and the like are also replacing cashiers with apps and ordering kiosks.
Indeed, a study by economists Grace Lordan and David Neumark found that “increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become unemployed.”
Aaron Klein is Breitbart’s Jerusalem bureau chief and senior investigative reporter. He is a New York Times bestselling author and hosts the popular weekend talk radio program, “Aaron Klein Investigative Radio.” Follow him on Twitter @AaronKleinShow. Follow him on Facebook.