MCViewPoint

Opinion from a Libertarian ViewPoint

Bernie Sanders Might Learn Something from Venezuela’s Minimum Wage Experiment | Mises Wire

Posted by M. C. Fox on September 26, 2018

Socialism isn’t like the free market which progresses peacefully. Socialism requires a bureaucratic boot on the neck of business.

https://mises.org/wire/bernie-sanders-might-learn-something-venezuelas-minimum-wage-experiment

There are labor shortages all over the country. There are not enough truck drivers, plumbers, food waitresses, construction workers, and so on. The official unemployment rate is below 4 percent. It was just reported private sector wages popped 2.9 percent.

However, Bernie Sanders and other “progressive” candidates are endorsing the idea of a federal living wage. On his website, Bernie starts with,

Millions of Americans are working for totally inadequate wages. We must ensure that no full-time worker lives in poverty. The current federal minimum wage is starvation pay and must become a living wage. We must increase it to $15 an hour over the next several years.

His latest big idea is to

tax companies with 500 or more employees an amount equal to federal benefits received by their low-wage workers. The bill is designed to discourage large companies from paying their workers so little that they end up relying on federal benefits, such as food stamps, to make ends meet.

If Bernie were paying attention, there is a minimum wage experiment going on in real time in Venezuela right now. Sure, there’s some serious money printing going on there and plenty of socialist schemes to keep the shelves empty. However, the fact there’s nothing to buy hasn’t kept Venezuelan president Maduro from hiking that country’s minimum wage 24 times since 2013 when he took office.

The latest hike went into effect on September 17, and it was huuuge — 3,000 percent. Fabiola Zerpa writes forBloomberg,

7 million employees are guaranteed 1,800 bolivars a month — worth about $20 at the black-market rate. President Nicolas Maduro intended the mandate as political boost, but it’s having the opposite effect as companies, already hit by Venezuela’s epic economic contraction, tell workers they can’t afford to keep them.

No one should be stunned if employees are told to go home if the government by way of brute force increases pay by 30 times.

“I already told my four employees to go find other jobs,” Caracas garage owner Marcos Vizcaino told Bloomberg. “I’ve decided to close. There’s no need for me to keep to losing money for a third year in a row.”

Zerpa writes,

The higher minimum wage, which Maduro announced last month, was among several bids to steady the rapidly failing state’s economy and stanch hyperinflation. The socialist autocrat also devalued the currency and lopped five zeroes off denominations of the bolivar bill, which has been rendered almost valueless.

Lopping zeros off a currency has never worked and how on earth would raising the minimum wage by 30 times “stanch hyperinflation?” By the way, the zero lopping just happened a few weeks ago and price inflation is 100 percent for the new money…

Be seeing you

Sean Penn

Hero worship

 

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