United Liberty – by Jason Pye During a recent appearance at the American Enterprise Institute, Microsoft co-founder Bill Gates expressed concern about the effect a minimum wage hike would have on the demand for labor, intimating that the Earned Income Tax Credit as an anti-poverty measure makes more sense.
“You know, when people say we should raise the minimum wage, I know some economists disagree, but I think, boy, I worry about what that does to job creation,” Gates told a crowd gathered at the conservative think tank. “The idea that through the Earned Income Tax Credit, you would end up with a certain minimum wage that you’d receive — that, I understand better than potentially damping demand in the part of the labor spectrum that I’m most worried about.”
Though he’s a successful businessman, Gates isn’t a conservative. The multi-billionairebacked President Obama in 2012 and has expressed support for various parts of his agenda, including higher income and energy taxes. He’s even wished that President Obama had more power to get around political gridlock.
But this isn’t the first time that Gates has been skeptical of the proposed minimum wage hike, one of President Obama’s biggest recent economic proposals. Back in January, during an appearance on Morning Joe, the Microsoft co-founder was more pointed in his criticism of the minimum wage.
“You have to be a bit careful that if you raise the minimum wage, you’re encouraging labor substitution. You’re going to go buy machines and automate things or cause jobs to appear outside of that jurisdiction,” Gates said. “And so within certain limits, it does cause job destruction. But if you really start pushing it, then you’re just making a huge tradeoff.”
“And you have to say, which are the households that end up benefitting. Is it much more the teenager in a wealthy household, or is it that household in poverty? A lot of the problem there is that those people don’t have many hours,” he said, adding that “[t]hese are complex issues, it’s not as simple as just saying, okay, raise the wage.”
More than 500 economists, including three Nobel laureates, have signed a letter warning lawmakers of the “serious consequences” of raising the federal minimum wage to $10.10 an hour, a policy being pushed by President Barack Obama and most congressional Democrats. The Congressional Budget Office has determined that the proposal being pushed by the White House would cost between 500,000 and 1 million jobs.
Bill, you look exhausted in that picture. I’m guessing that managing us peasants was not as easy as you thought it would be. Maybe you should just quit now and hang yourself why you have the chance. Otherwise, very soon, we will come and do it for you.