Bill Gates, billionaire co-founder of Microsoft and political liberal, appeared at the American Enterprise Institute last week for a wide-ranging discussion with Arthur Brookson the economy, market failure, common core curriculem and other topics. But what he said about the minimum wage should make progressives’ ears perk up.
GATES: When people say we should raise the minimum wage, I think… I know some economists would disagree, but I think boy, I worry about what that does to job creation. The idea that through the Earned Income Tax Credit, you’d end up with a minimum wage that you’d receive – that, I understand better than potentially damping demand in the part of the labor spectrum that I’m most worried about.
Gates is a darling of progressives when he talks about raising tax rates on the rich, but they’re listening to the wrong part of his message. He’s a billionaire, and mostly unconnected from the tax brackets that actually feel the effects of tax hikes. But what he is also is an entrepreneur – unlike a lot of pro-minimum-wage-hike progressives, he actually built a business. He knows what it’s like to calculate the cost of adding a new worker and how much it will take to compensate them. Adding to the marginal cost of hiring a new worker – especially one at the low end of the income scale – would be disastrous for those workers who are marginally attached to the labor force and have fewer skills to fall back on if they’re priced out of the work force.
This comes on the heels of a letter from 500 economists, including five Nobel laureates, that excoriated Democrats for threatening to raise the minimum wage in this economy. If Democrats were smart, they’d listen. Unfortunately, Bill Gates’ political views only matter when they’re convenient to liberals – and economists are only useful when they agree with Democrats.