The following was originally published as part of Dr. Mark Skousen’s regular publication, Investor Café. He is also the editor of the Forecasts & Strategies, High-Income Alert, Five Star Trader, TNT Trader and Fast Money Alert investment advisory services.
The Democratic Party, which has exhibited such socialistic tendencies that I am nicknaming it the Democratic Socialist Party, pushed through the Raise the Wage Act in a 231-199 House vote, lifting the federal minimum wage from $7.25 to $15 an hour for “nearly all” American workers by 2025. Now it will go to the Senate.
Senator Mike Lee told me at FreedomFest last week that it has “no chance” of getting through the Republican-controlled Senate. Nevertheless, some states have already adopted the $15 an hour measure: California will reach $15 an hour in 2022, Massachusetts in 2023, New Jersey in 2024 and Illinois and Maryland in 2025.
Minimum wage legislation is one of the worst examples of bad economics, yet it appears on the surface to be good politics. It makes legislators look as if they are compassionate and concerned about the well-being of its poor and middle-class workers, but what if a $15 minimum wage ends up putting people out of work, or having them cut back their hours?
A reduction in hours is exactly what Senator Bernie Sanders did when his campaign staff complained they were earning less than $15 an hour. He responded by boosting their pay to $15 an hour but cut back their hours! It is amazing how misguided the Democrats are when it comes to understanding basic economics.
Whether it’s advocating the minimum wage, Medicare for All, or free college tuition, they fail to understand the principles of accountability (user pays), or welfare (help those who need help, but don’t help the well to do).
It is what I call the A&W principle (see my column on the A&W principle at by clicking here.)
Good investing, AEIOU,
Editor, Forecasts & Strategies