Economy

Trump’s Top Economic Adviser: Minimum Wage is Bad, Health Care is Bad

JM Ashby
Written by JM Ashby

If you didn't already have enough reasons to get out and vote, consider the words of Trump's top economic adviser Larry Kudlow; the man responsible for telling Trump what he should think.

Kudlow spoke at a forum hosted by the Washington Post where he freewheeled as if he were back at this old job at CNBC where his opinions were safely ignored.

Kudlow said Republicans will try to repeal Obamacare again next year and he's far from the first Republican to say that, but he also called for abolishing the minimum wage and that's not something you'll hear every day.

And not just the federal minimum wage. Kudlow believes state and local minimum wage should also be eliminated.

“My view is a federal minimum wage is a terrible idea. A terrible idea,” Kudlow said at a Washington Post Live event, adding that raising it would “damage” small businesses by forcing them to face higher payroll costs. Kudlow later called the idea of hiking the federal minimum wage “silly.” [...]

“Idaho is different than New York. Alabama is different than Nebraska. That’s why the federal minimum wage doesn’t work for me,” Kudlow said.

Kudlow appeared to also oppose minimum wages at the state and local levels, citing conservative arguments that it constrains business growth by adding to their costs. But he said the federal government shouldn’t interfere.

“I would argue against state and local, but that’s up to the states and localities,” Kudlow said.

Kudlow brought it up so I want to take a minute to consider what would actually happen if minimum wage laws were eliminated.

He says Idaho is different than New York, which is true, but if you repealed the minimum wage in Idaho it would allow businesses in the state to pay people even less than they already do. And in that event, labor in other states would be outsourced to Idaho in a race to the bottom of labor costs. Idaho would become the new sweatshop.

None of this is necessarily hypothetical. We can already observe the fact that states with anti-union "right to work" laws on the books have lower wages and attract some of the biggest manufacturing operations in the country as a result. If businesses in these states were not required to pay a minimum wage, wages would be even lower than they already are.

Kudlow says minimum wage forces businesses to face higher payroll costs, but it's suppose to. That's the whole point. We wouldn't have much of an economy if businesses weren't required to pay their employees a minimum amount. And the amount we require isn't even that much.

Republicans in Congress will never have the numbers or the political capital to eliminate the minimum wage, but Trump's top economic adviser makes it clear that they wouldn't even consider legislation for raising wages.

You may call that ironic given that Republicans said their tax cuts would raise wages. They were lying, of course.

  • muselet

    Larry Kudlow is a crank and a charlatan, an economist only in the minds of supply-side simpletons.

    Which makes him a perfect fit for Donald Trump.

    –alopecia

  • Username1016

    Democrats need to get loud and point out that it’s NOT a law of nature that profitable businesses reward C-level execs and shareholders but not workers. It’s the result of a series of choices, many of which were put in place during the Reagan era. We can make different choices. We can force businesses to pay their workers a living wage, even if (oh no!) the CEO gets one less yacht. Government overreach? My Aunt Fanny. Government is the only thing that CAN stand up to business on behalf of ordinary people, and it should be doing exactly that.

  • Badgerite

    Sounds like a new gop moto. The party of “We’re lying, of course.”
    Know how you can tell if a Republican is lying. His lips move.

  • gescove

    What ever happened to the concept of the virtuous cycle? You know, where higher wages -> increased consumption -> business growth and profits?

    • JMAshby

      I think this died around the time Republicans realized you can just pass fiscal stimulus (tax cuts) to pad profits and simulate real foundational growth.

    • muselet

      The GOP abandoned such evil socialistical nonsense when it embraced what George HW Bush rightly called Voodoo Economics, a/k/a Supply-Side Economics, a/k/a Trickle-Down Economics, a/k/a Giving Rich Folk More Money.

      –alopecia