Commentary: The scam of the year

In the very best scams, popular ideals of the public are used to coerce the target into taking an action they would otherwise never do. Modern politics, especially as used by the Obama Administration, Sen. Elizabeth Warren, Sen. Bernie Sanders, and several Democrat stronghold States (like New York), and specifically on the subject of minimum wage use the same principles.

Credit: Branco/thecornertableblog.com
The first objective of a scam is to identify what the mark is looking for. In this case its easy. People want something for nothing. Quick gains with no apparent consequences. It’s part of the reason Lotto is so popular. Increases of minimum wage fits the bill nicely. It actually only affects about 3% of the working population – even less of the total population. But it fits into the mantra of income equality, and appeals to the poorest of voters.

The second objective is to catch the attention of the mark. Between the constant declaration of the woes of income equality from the White House, and the headline grabbing declaration from Sen. Elizabeth Warren for a national $15/hr minimum wage, attention was easy. Counting on the fact that the news media would promote the controversial statements, and that the mass of voters have been trained to only read headlines and 30 second soundbites, the call for a $15/hr minimum wage has circulated on social media almost non-stop for over a year. The desire for free money, in the form of a wage increase without commensurate increase in productivity or qualifications, has drowned out all mentions of economic infeasibility and consequences (such as loss of government aid, increased taxes, and loss of jobs).

Third on the list is the draw the mark in. To this end politicians in California and New York, as well as in Seattle, where Democrats hold strong sway over public opinion, have rushed legislation through the system to enact limited minimum wage increases. In New York, as an example, the unjustified increase in wages is targeted to only fast food workers. This is done for several reasons.

By limiting the increase to this group, support from several large unions is gained (and in New York politics unions are critical for Democrats). In addition, jealousy combined with the desire for “free money” adds to the swell of those also seeking the increase. This places pressure on additional unions to join the fray. It also builds in a default scapegoat for any problems or negative repercussions. Any opposition is the source of all problems (from the view of those seeking the “free money”).

Lastly, the mark is taken. The masses, ignorant of consequences of an increased minimum wage that have gone unspoken by supporters and ignored by opponents as their arguments are too long for the headline focused majority, willfully lend their support to those offering the “consequence free money.” This takes the form of donations, votes, and positive word of mouth. Is it any wonder that Sen. Bernie Sanders advocates for the $15/hr minimum wage (though he is unwilling to pay his campaign staff this amount) and is surging in Democrat polls for the nomination?

In a successful scam, the mark (voters in this case) are felt either unaware they have been taken, or unaware of the consequences of being taken – at least until it is far too late. In this case, after donation have been made (and politicians are hoping after votes cast) the public is left with the following:

  • Instead of income equality, a new class of income disparity is created. Fast Food workers will have their income raised while other food preparers and workers will not. Nursing assistants, paramedics, day care workers, teaching assistants, and a host of skilled workers will be relegated to a lower class of pay much too their disdain.
  • Jobs will be lost, not created or “saved.” Already ample proof has been found in Seattle that many businesses cannot support the higher cost – even after passing part or all of the increase onto consumers. Those businesses in Seattle have closed, resulting in fewer workers. Even for those businesses that do remain open, the higher cost to consumers has also been matched with a reduction in the number of employees. In several fast food chains, reports are flowing in of expedited efforts to automate vast portions of the business to take into account the higher cost of the new minimum wage. Again, this results in net firings and more people hurt, not helped, by the unearned wage increase.
  • Costs to consumers are increased. As a result of having to find the funds for the higher wage, businesses can only cost cut so much before they are faced with closing the business. An interim step is to pass the cost onto consumers. At least a portion of the consumers affected are the very same low income voters who did NOT get the wage increase. Thus that group either loses more income for the same product at no added benefit, or they will forgo the product and the business will suffer from decreases in revenues – which can result in more people fired.
  • Loss of government benefits. At least a portion of the fast food workers make up part of the 150 million Americans receiving aid from the government. With the increase in wages, these workers will be salary capped out of those benefits. This includes food stamps, rent assistance, student loans and grants, Obamacare subsidies, and other assistance. While the higher wage theoretically pays for these losses, in the real world that is often not the case when the loss of all these programs are removed and taxes are considered.
  • Increased taxes. The bane of all working Americans. With an increase in wages, those getting the increase will enter a new category of taxation. Many will no longer receive refunds from the IRS, while others may owe taxes. Subsidies for Obamacare will decrease, shifting the burden for the healthcare cost onto the workers – something that they previously may not have had to account for. In fact, the change in Obamacare status may require a repayment of subsidies given, on top of any additional costs and higher taxes.
  • Loss of business. As has happened in Seattle, some businesses cannot afford to operate with the $15/hr minimum wage and will close. Some will choose to move to a location where it is more affordable and business friendly to operate. Either way, it means a closed business and job losses affecting the very people that were promised the increase in wage would benefit. Plus it will affect consumers that previously were using those services. States and local communities will also lose tax revenues from these businesses – which may require increases to make up the difference. That of course just hits the middle class, who otherwise were not involved in this.

    The trade off to get all these predictable consequences (and likely even more), is that politicians will continue to be elected to the offices they hold. The poor, as a whole will not be helped. The selected poor may suffer directly and indirectly. The middle class may well get tax hikes. The unemployed will remain unemployed. Businesses may suffer. In essence, a small sliver of the small percentage of jobs will benefit. And people wonder why the politicians touting the increase in minimum wage won’t answer the question, ‘and what happens after the increase takes place?’ But once the elections are over, and the low information voters have done their part of the scam and been used, when the repercussions hit, it will be too late. The politicians will have won and all others will suffer. How generous of them.

  • About the Author

    Michael Vass
    Born in 1968, a political commentator for over a decade. Has traveled the U.S. and lived in Moscow and Tsblisi, A former stockbroker and 2014 Congressional candidate. Passionate about politics with emphasis on 1st and 2nd Amendments.

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