Maybe this was just an April Fool’s joke, but if so, it was rather elaborate. Yahoo News even put together a meme video, complete with obnoxious background music, in support of senior editor Dylan Stableford’s contention that Ted Cruz had missed Alexandria Ocasio-Cortez’ point about $7 croissants at LaGuardia Airport. Except it appears that Stableford is the one missing the point … and the facts.
First, let’s see the original AOC tweet, complete with an Edward Munch scream emoji (via Twitchy):
Croissants at LaGuardia are going for SEVEN DOLLARS A PIECE 😱
Yet some people think getting a whole hour of personal, dedicated human labor for $15 is too expensive??
— Alexandria Ocasio-Cortez (@AOC) April 1, 2019
That got Cruz’ attention:
Oh the humanity! Here’s the answer: government-mandated FREE CROISSANTS FOR ALL. And we’ll just force the bakers to give all of their time for free. #SocialistLogic #AprilFools https://t.co/1mx00FegwS
— Ted Cruz (@tedcruz) April 1, 2019
Stableford and Yahoo decided to stage an intervention at this point:
Sen. Ted Cruz, R-Texas, seized upon Ocasio-Cortez’s croissant tweet, but he seemed to miss her point. …
Ocasio-Cortez and other progressive lawmakers have called for an increase of the nationally mandated minimum wage, which since 2009 has been $7.25 per hour. In recent years, numerous states have raised the minimum wage to $15 per hour.
According to the U.S. Department of Labor, as of March, the minimum wage in 29 states was higher than the federal minimum wage.
In New York, the minimum wage is $11.10 per hour. In Texas, it is $7.25.
Even on its own, this is a strange argument to make for missing the point on high prices. If wages were being artificially suppressed at LaGuardia, then raising them would only increase the cost of the croissant, as practically everyone pointed out immediately after Ocasio-Cortez’ tweet. Higher labor costs means increased product costs, a basic economic fact that doesn’t take a college degree to grasp.
In this case, though, the higher labor costs already exist. The minimum wage in New York may be $11.10 an hour, but the minimum hourly wage for jobs in the Port Authority jurisdiction is presently $13.60 at JFK and LaGuardia. That will escalate to $15.60 in September of this year on its way to $19.00 by September 2023. It’s still unclear to me what the minimum wage of Texas has to do with a croissant in LaGuardia, but perhaps Yahoo will issue another instructive meme video to explain that connection.
Ted Cruz didn’t miss the point — Stableford and Yahoo did, which Cruz gleefully pointed out:
Yahoo News “reports” I missed @aoc point. Uh, no. (1) LaGuardia croissants are $7 BECAUSE it is govt monopoly w/ $19 min wage. (2) Medicare for all promises “free” healthcare by forcing doctors (by analogy, bakers) to give away their labor for govt wages. https://t.co/OJyBVwsvxK
— Ted Cruz (@tedcruz) April 1, 2019
Cruz used the endpoint minimum wage rather than its present status, but otherwise he’s correct. It’s not just the higher minimum wage that drives the croissant price at LaGuardia; it’s the high rental costs, the licensing fees, the restricted marketplace, and so on, all of which are government interventions in the marketplace. However, the higher minimum wage plays a part in it too, which is why AOC’s tweet tying her complaint about high prices to an argument for hiking the minimum wage was so worthy of mockery.
Minimum wage hikes are inflationary by their nature, because they artificially increase the cost of labor without increasing its economic value to the business. That forces producers to either increase prices or decrease labor (usually both), which is why we see fast-food restaurants transitioning to tablets for food ordering rather than hiring teenagers to take orders. Technology has become cheaper and more reliable as the cost of labor gets further from its economic value. And that’s one reason why that $7 croissant at LaGuardia is likely to cost $12 in 2023, and why Ocasio-Cortez will likely have to get it from an automat.