Bernie Sanders Jobs-for-All Plan is More Vermont Madness

Nikitas3.com has declared socialist US senator Bernie Sanders of Vermont as the leading candidate for the Democrat nomination for president in 2020.

The reason is simple: Sanders almost toppled Hillary in a surprisingly strong 2016 campaign and thus he is “next in line” for the nomination since he already ran so well nationally.

Second, Sanders’ activist followers are going to raise political hell if he is not the nominee. This would cause major disruptions in the Democrat party, and possibly lead Sanders to run as a third-party candidate. This would be very bad news for Democrats.

The question is: What created Bernie Sanders? What is ultra-liberal Vermont really like?

Nikitas3.com went to college in Vermont (at Middlebury), lived in Vermont afterward, and has spent a lot of time there. Thus I know a few things about Vermont, about Sanders and about the people and ideas that put him into the national spotlight.

Rural, rugged and small-town Vermont was historically a conservative Republican farm state. Vermont then experienced a big influx of liberal out-of-staters (‘flatlanders’) in the post-World War II economic boom of the 1940s and 1950s during which many ski areas were built and expanded. These newcomers generally came from the big cities and suburbs of the bustling Northeastern US.

In the 1960s and 1970s tens of thousands of even more liberal college-educated young people moved to Vermont to escape the cities and suburbs that they were raised in. This was part of the ‘back to the land’ movement and the ‘hippie’ movement. This gives Vermont today a population of only 628,000. Bernie Sanders was one of them. He came from Brooklyn (part of New York City).

These young people totally changed the political face of Vermont. With their increasing numbers the state became politicized toward the left. For instance Vermont’s old-fashioned annual town meetings, held the first Tuesday in March, often turned from local discussions like road repairs to opportunities for these young radicals to rant about nuclear power, foreign policy, women’s rights, solar energy and every other issue.

Nikitas3.com went to college in Vermont from 1971 to 1976 and then lived in Vermont for three years from 1978 to 1981 with a group of Ivy League-educated ‘green’ socialists in the small town of Warren. They came primarily from the suburbs of New York City, Philadelphia and Boston.

During that time I noticed something troubling: Despite the influx of young people with lots of energy and new ideas, often from moneyed backgrounds, these newcomers were virtually all leftist obstructionists, which they learned about in the universities, i.e., that all economic development is bad, i.e., that American capitalism drives development, and thus is bad.

They sought to block many types of development and imposed a strong ‘green’ agenda on the state including Act 250, one of the pioneering environmental laws in the country.

Nikitas3.com departed Vermont in 1981 predicting that the economy would stagnate from this obstruction. And lo and behold by the year 2000 the departure of thousands upon thousands of Vermont’s younger, skilled and educated population had reached a crisis stage. Today the problem continues. In short the flow of young people into Vermont was reversed by the very policies brought in by the ‘back to the land’ generation of the 1960s.

Meanwhile next-door New Hampshire, which has a long history as a conservative state (no state income tax, so state sales tax, state motto is ‘Live Free or Die’), is thriving today and has been for decades.

Now look at this from Fox News:

Sen. Bernie Sanders … is preparing to unveil a plan for the federal government to guarantee a job offering $15 per hour and health care benefits to any American worker “who wants or needs one,” The Washington Post reported Monday.

It is not clear when Sanders will announce the plan and a Sanders spokesperson told the Post that it was still being crafted.

It is also not clear how Sanders’ plan would be paid for. Republicans have long opposed a federal jobs guarantee, saying such a plan would be too expensive and impractical.

The Post reported that an early draft of Sanders’ plan calls for the government to fund hundreds of projects in categories such as infrastructure, education and the environment. Americans would be entitled to receive a job with one of those projects or receive job training to do so.

So here’s the big question: If Vermont stagnated after decades in which it religiously followed the left-wing policies that Sanders embraces, what would be different if he sought to impose a jobs-for-all policy nationally, even perhaps as president?

The answer is obvious: Nothing would be different. His plan would never work; it is classic socialism. Finland recently tried a guaranteed universal income program and abandoned it for its high cost. Even Vermont discussed a universal health-care system and abandoned it for being too expensive.

On the other hand the improving national economy under president Trump already has taken 2 million Americans off of the food stamp rolls. Millions more will follow as the economy improves.

Nikitas3.com calculates that that the Trump economy, if allowed to continue to thrive with reduced taxes and regulations, will by the year 2025 produce up to 24 million jobs or 10 million to 12 million more jobs than would have been created under Hillary Clinton’s Obama-era policies. And those Trump jobs are and will continue to be better-quality jobs with higher pay and longer hours than those of the Obama years, many of which were part-time.

Sanders, on the other hand, wants to reverse the progress that the private-sector Trump economy is making and go further left than even Obama. He would create millions of make-work jobs through government fiat at artificially high wages while squelching private-sector jobs with the same policies.

This won’t work and the proof is in our economy today. The most naturally prosperous and growing economies in America are in the low-tax, low-regulation, business-friendly conservative states like Texas, Georgia, North Carolina, Florida and Arizona where private enterprise flourishes. Many young people from Vermont have gone to these states.

On the other hand the most troubled economies are liberal places like Vermont, Illinois, Connecticut, California and New York state. The stories about expanding homeless encampments in California are becoming the stuff of legend. Wisconsin, Ohio and Michigan had become economic basket cases under decades of Democrat rule until Republican governors fixed them.

We already have 22 million Americans working directly for the government on the federal, state and local levels, and millions more on government grants, contracts, etc. That is more than enough government employment and government-subsidized employment. We need private-sector jobs to create wealth for all.

What’s worse is that Sanders is proposing that these subsidized jobs pay at least $15 an hour. But by observing the negative consequences of the $15 minimum wage on cities where it has been implemented, like Seattle, the folly of Sanders’ thinking is further exposed. USA Today reports:

As companies look for ways to cut costs, Seattle’s $15 minimum wage law may be hurting hourly workers instead of helping them, according to a new report.

A report from the University of Washington (UW) found that when wages increased to $13 in 2016, some companies may have responded by cutting low-wage workers’ hours. The study, which was funded in part by the city of Seattle, found that workers clocked 9% fewer hours on average, and earned $125 less each month after the most recent increase.

“If you’re a low-skilled worker with one of those jobs, $125 a month is a sizable amount of money,” Mark Long, a UW public-policy professor and an author of the report told the Seattle Times. “It can be the difference between being able to pay your rent and not being able to pay your rent.”

In 2014, the Seattle City council voted to incrementally raise the minimum wage to $15 per hour. The minimum wage increased from $9.47 to $11 per hour in 2015, and to $13 in 2016, according to the report. Under the law, businesses must raise the minimum wage to $15 for all workers by 2021.

Here are some other drawbacks of such a big increase in the minimum wage:

*Not only are hours being cut back for employees – and Seattle is not even at $15 yet – but benefits too, and perks (like free meals for employees of a restaurant) are being cut in order to pay for the higher minimum wage.

*Prices for customer meals or other products are often raised to pay for higher wages, i.e., the minimum wage increase is a transfer of wealth from customers to workers, which harms one group while helping another (which is classic socialism). Increases in prices also can fatally harm the competitive edge of a business.

*Some businesses are closing or declining to expand in Seattle.

*Entry-level workers simply are not being hired; $15 an hour, or $30,000 a year, is a lot of money to a small business for entry-level work. If they don’t have to spend it, they won’t.

So which is better? A low-skilled person with no job at all, or with a job making $9 or $10 an hour and with an opportunity to advance naturally?

Here is the Nikitas3.com proposal for how wages should be determined:

The business owner should set the wages he will pay according to his costs and the labor market.

The federal minimum wage is now $7.25 and some states have much higher minimums. Then let us say that a dishwasher is making $9 an hour and demands a raise to $10 but that the restaurant owner, operating on a slim profit margin, does not think that the job is worth $10 or feels that he cannot pay $10 (the raise is equal to $2,000 per year in extra wage costs).

The owner should then advertise the job at $9 an hour. If a suitable applicant is found, then that applicant should be hired.

In other words the labor market is providing a dishwasher willing to work for $9 and so there is no reason to pay more, i.e., the labor market sets the wage naturally just as all of capitalism is based on natural fluctuations in the economy.

If a suitable replacement cannot be found at $9 then the dishwasher should get the raise.

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