“Patriotic Millionaires” and the Minimum Wage Myth
Democratic Senator Bernie Sanders and members of “Patriotic Millionaires” in Washington Wednesday unveiled what they call “a groundbreaking new unified Democratic minimum wage bill which will raise wages for millions of Americans.” So, who are the “Patriotic Millionaires?” If you missed some of the media coverage they have received:
The Patriotic Millionaires is a group of 200 high-net-worth Americans who are committed to building a more prosperous, stable, and inclusive nation. The group focuses on promoting public policy solutions that encourage political equality; guarantee a sustaining wage for working Americans; and ensure that millionaires, billionaires, and corporations pay a greater percentage of taxes.
In simple terms: Patriotic Millionaires are affluent Americans arguing in favor of a $15 an hour minimum wage. From a news release:
“The idea that we 1%ers can live in luxury while the 99% can’t even earn a halfway decent living is a complete non-starter. After all, who is going to buy all the products and services that we want to sell? Economic inequality on the present scale is not just bad morally and socially. It will ultimately destroy our economy,” said David Goldschmidt, Patriotic Millionaire.
“While I am not ignorant of or oblivious to the emotional and real life circumstantial challenges of those whose lives are constantly stressed due to inadequate income, I think a constantly ignored point, in this whole minimum wage discussion, is the economic one. And that is not the economy of the underpaid, but the economy of the nation! Why do we think that it is a sound argument to NOT pay a living wage to our employees and instead keep it in our own pockets? Why not put at least some part of it in the hands of those who will spend it?” said Patriotic Millionaire Stephen Prince, Founder and CEO of Card Marketing Services.
“In my city of San Francisco, workers critical to our growth–waiters, cooks, clerical workers and many others–are being forced out because wages are too low. Even the wealthy want these people to stay. In most cases the minimum wage won’t affect the business negatively, and where it does San Franciscans are happy to pay a little more for the products and services,” said Dale Walker, Patriotic Millionaire.
There is no small irony in Walker saying that “in most cases the minimum wage won’t affect business negatively,” in his “city of San Francisco.” In fact, a recent Harvard University study focusing on the Bay Area found that for every $1 increase in the minimum wage, restaurants have a 14% greater chance of “exiting the market” (going out of business):
Preliminary results of a new study based on data on San Francisco Bay Area restaurants suggest that higher minimum wages at restaurants increases the chance that an eatery of average quality will close.
The study titled “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit,” has not been published but is part of research being conducted at Harvard Business School.
The results show that when the minimum wage increases by a dollar the chance an average quality restaurant will go out of business increases by 14 percent.
Not only is “Patriotic Millionaires” oblivious to the business realities of dramatically increasing the minimum wage, they have quite a flare for the dramatic:
“Any corporation that makes money off of people working for poverty wages is enabling a form of slavery. Unfortunately, for too many business owners, that is actually just business as usual, and hence why we need a federal minimum wage that affords an above-poverty standard of living,” said Ryan Smith, Patriotic Millionaire.
Unlike slaves, of course, minimum wage earners are free to leave. And a restaurant or any other business that goes under because of the pressures of increasing minimum wage pays $0 an hour.