Sen. Bernie Sanders, I-Vt, isn’t one to mince words when it comes to corporate greed. On Wednesday, the presidential candidate attended a Walmart shareholders meeting and blasted the company’s leadership for supposedly paying “starvation wages,” as well as for its allegedly “grotesque” greed.
Now, as my colleague Tom Rogan has already observed, Sanders’ attacks on Walmart are exaggerated and largely unfounded. The company employs millions of people at well above minimum wage, and it does a public service in making so many goods so affordable. Yet, the biggest problem with Sanders’ war against Walmart isn’t that his criticisms are off-base; it’s that the senator’s socialist solutions are far worse. As history should have taught us by this time, they would destroy the blue-collar workers he claims to be fighting for.
Take, for instance, Sanders’ fight for a mandatory, $15 dollar federal minimum wage, the policy he used most of his speaking time at the Wednesday meeting to promote. On its face, this sounds like it would benefit workers. But think about it. Walmart currently provides a wide variety of low-skill employment: clerks, cashiers, managers, and laborers. Many of these jobs are already on the path toward automation, and nothing will get them there faster than a sudden 50% or 75% increase in labor costs for all low-skill workers.
Consider McDonalds. That company, which arguably originated the fast-food industry, is revolutionizing it once again by introducing automated ordering kiosks in a third of its locations, replacing many cashier jobs. There’s little doubt that, were Sanders’ dream of a $15 minimum wage to become reality, doubling the current rate, then employers would hasten this process. Computers don’t call in sick or miss their shifts. They don’t require health insurance or retirement benefits. And not only do they require smaller investments in the long run, but the money you put into them doesn’t end up diffused into the coffers of the IRS and the Social Security program.
This intuition is confirmed by empirical evidence: For example, a 2017 study found that a $15 minimum wage “increases the likelihood that low-skilled workers in automatable jobs become nonemployed or employed in worse jobs.” Sanders’ socialist fantasies wouldn’t help most Walmart workers. They’ll just hasten the point at which their current job no longer exists.
Sanders’ betrayal of his working-class supporters doesn’t stop there. The senator has long pushed for “free college for all” — a plan to make all public colleges tuition-free. Yet with the exception of a few workers who have the financial cushion to go back to school, this wouldn’t help working-class Americans. Rather, it would hike their taxes to pay for rich people to go to college.
The Brookings Institution has found that free college would overwhelmingly benefit society’s richest, who are more likely to attend college and hold more student debt. Unsurprisingly, students from higher-income families would receive “24 percent more in dollar value from eliminating tuition than students from the lower half of the income distribution.” That doesn’t help Walmart workers or their families. In fact, it leaves them relatively worse off.
Faced with a housing crisis, Sanders embraces backward rent-control policies that have made urban housing so expensive in the first place. Nearly all economists agree that arbitrary price controls only make housing affordable for a lucky few, and in the long-run, they limit the supply of new housing by disincentivizing construction, ultimately causing rents to skyrocket (except for those fortunate few who locked in early leases) and making the crisis worse. And this has been the experience of cities like New York and San Francisco, and wherever else rent control has been tried. If Sanders really cares about Walmart workers, he should stop trying to raise their rents.
It’s the same story with Sanders’ protectionist trade policies. He bills his approach to trade as a “fight for workers,” but tariffs and other trade barriers almost always destroy more jobs than they create, and usually raise prices for consumers. Right now, even many working-class Americans — like Walmart employees — are able to afford an ever-increasing material quality of life, in large part due to the relatively low and ever-declining prices of things like dishwashers, grills, and microwaves, as well as smartphones and other electronics. Sanders’ backward approach to trade, which is unfortunately shared by President Trump, tends to raise prices and hurt everyday workers and consumers.
This isn’t to say Sanders’ concern is insincere. But he seems impervious to learning from socialism’s terrible demonstrated track record of all the policies he advocates.
