Signup for our free newsletter:

Why Donald Trump is Right about Minimum Wage

Written By Geoffrey Pike

Posted May 11, 2016

trumpminDonald Trump is maintaining his flexibility. Some would say this means he has a lack of principles. Some would say this means he has to continually fine-tune his populist message. Some would say his flexibility allows him to backtrack from previous off-the-cuff remarks.

It is probably all true to a certain extent. But I would rather him backtrack from bad comments and bad positions than to maintain them for the appearance of standing firm and with conviction.

Flexibility is good in the sense of keeping an open mind and even being open to shifting your opinion based on new information. But it can also be problematic when you are learning new things while on the campaign trail.

Trump’s views are often refreshing as compared to the establishment views shared by most politicians. That is part of the reason he is popular. Trump has an authoritarian streak, but at the same time is not always taking the view of offering more government as a solution.

One recent issue where he has showed this flexibility is the minimum wage. When running in the Republican primaries and fighting for conservative votes, Trump was not too fond of the minimum wage. Now that he is the presumptive Republican nominee, Trump seems to be warming up to the idea of a higher minimum wage.

But we have to listen to his words carefully. Trump said he doesn’t understand how someone can live on $7.25 per hour. I don’t understand that either. But this doesn’t mean you have to advocate a higher minimum wage.

The minimum wage isn’t supposed to be a wage that you can live on comfortably, let alone actually support a family. Most people with minimum wage jobs are young people and people with other sources of income.

With that said, it is really irrelevant whether you can live on $7.25 per hour. The minimum wage doesn’t mean you have to make this amount or that you are supposed to live on this amount. It only prohibits an employer from offering a job that pays less. It doesn’t require that an employer offer a job if the person’s skills are worth less than the minimum wage.

It is interesting that there are unpaid internships that are allowed by law. So a company can pay somebody nothing, yet paying them $5 per hour would be illegal.

But why would anyone work for free? It is obviously done for the experience and opportunity that it might present in the future.

When Trump says that he doesn’t understand how someone can live on $7.25 per hour, he is right to say this. It is probably saying it to appeal to voters, but it is true.

States’ Rights

While Trump is saying that people should have higher wages, he is hedging on proposing a higher federal minimum wage. He has actually come out and said that we should let the states decide.

I think minimum wage laws are harmful in cutting off the bottom rung of the ladder for people with fewer skills, or even for those just looking for something low key. If the minimum wage is set low enough, it may not have much of an impact. But if there is a recession and wages need to fall in order to clear the market, then it may result in an excess supply of labor, or in other words, higher unemployment.

But while minimum wage laws in general are a bad idea in terms of economics, these laws should be handled by the states if at all. That is the federalist system that was designed back in the 1780s.

The federal government is supposed to only do what is listed in the Constitution. If it isn’t an enumerated power, it should be left to the states or the people according to the 10th Amendment. Since minimum wage laws (or any labor laws) aren’t a function for Congress, they should be left to the states.

If destructive laws are going to be passed, it is better that they only impact one state at a time, rather than one bad law impacting 320 million people.

I like this side of Trump. I am not saying he is a Constitutionalist, but he is actually coming down with the right position here. He is playing his populist tune saying that he is going to bring companies back to the country and that wages will go up. At the same time, he is not locking himself into a position of supporting a higher federal minimum wage.

If Trump becomes president, we really have no idea what he will do once he is in office. Most politicians are far worse once they actually get in office. Many of them will talk about civil liberties or smaller government when they are on the campaign trail, only to continue with big government once they are in office.

Trump has surprised us in so many ways, we don’t really know what to expect. He has gone against the grain. The problem is that we don’t know if he will continue to go against the grain once in office.

On the issue of the minimum wage, let’s hope that he maintains this position of states’ rights. If California wants to pass a $15 minimum wage, at least it will just impact that one state, even if it is a big one.

When the next recession hits, Californians may be faced with much higher unemployment and a choice of whether to admit they were wrong in hiking the minimum wage. But we shouldn’t all be forced to suffer.