The New Welfare Queens

Employers in Seattle are learning how progressive economic policies create barriers to employment, and workers are learning how those policies create disincentives to work. Activists masquerading as workers pressured the city of Seattle to pass a minimum wage ordinance. Starting in 2017, the floor on wages will be $15/hour.

Labor activists used the hashtag #FightFor15 and slogans like "Stop Wage Theft." They aren't asking for much, just a living wage, decent benefits like paid sick leave, and the right to bargain collectively. And they are winning. The minimum wage is going to $15/hour in Los Angeles and San Francisco. The New York State Wage Board formally recommended a $15.00 minimum wage for the fast food industry in New York, and Governor Andrew Cuomo is expected to move it into law.

These measures are a burden on the employer, and inhibit the employer from hiring.

These measures are also creating disincentives to work. Seattle workers are asking to work fewer hours. All of these welfare programs are means-tested. If a person wants a "decent place to live," they can apply for Section 8 housing assistance. Section 8 is available to families whose income does not exceed 50% of the median income for the county or metropolitan area in which the family chooses to live.

So, if a person wants to live within walking distance of Pike Place Market, and they have no marketable skills, they can always game the system. And if they want to buy artisanal, locally sourced arugula with their SNAP benefits, they need to work fewer hours to continue to qualify. Therefore, the minimum wage can be thought of less as a way to move people out of welfare, and more as a progressive tax on employers.

One of the arguments for minimum wage is that welfare programs socialize the loss of wages. That is, the taxpayer picks up the difference between what the worker takes home and what the person needs to survive. The progressive argument states the desire to avoid the socialization of these "lost wages," and also avoid the privatization of excess profits. The progressive socialist claims to flip the script, and privatize the losses, while socializing the gains (people using less of the relatively scarce entitlement resources).

In reality, the new, higher minimum wage is moving very few, if any, people off welfare.

Maybe we can start to think of these workers as the new "Welfare Queens." Wikipedia defines a welfare queen as a pejorative phrase used in the United States to refer to people, usually women, who are accused of collecting excessive welfare payments through fraud or manipulation. Thus, anyone who games the system to maximize their entitlement handout is a welfare queen.

Maybe we should stop referring to the results of the activist progressive approach as "unintended consequences." After awhile, they start to seem more intentional.