Buried Paybacks

Joe Biden owed some debts. Don’t make a big deal of this. Every pol owes debts to those who backed him, and Biden is no different. The only question was who he would pay and how much. One payback, bringing Catherine Lhamon of Title IX infamy* to the White House, was sadly expected. Joe was in charge of buying off feminists in the Obama Administration, and it costs the government nothing to curry favor at the expense of male students denied due process to prove how much he cares about “survivors,” provided they’re not named Tara Reade.

But his announced stimulus package, at $1.9 Trillion dollar, was just as ripe for the pickings as the two stimulus packages during Trump’s term. And buried therein were some long-favored changes, but curious in a stimulus bill given their obvious consequence.

Mr. Biden also wants to raise the minimum wage to a uniform $15 an hour nationwide. It’s hard to imagine a more destructive policy for small businesses struggling to survive, especially in rural areas and mid-America states with lower wage levels than New York City. The strange economic logic seems to be to make it more expensive for businesses to rehire workers while giving those workers less incentive to return to work.

Raising the minimum wage isn’t the most controversial Dem policy change, in itself, although businesses are struggling, if not dying, and increasing the cost to survive might be better left for a time when they’re back on their feet. But we know a bit about the other consequences of this shift.

We know that a $15 per hour minimum wage isn’t enough after taxes, to sustain a family in a city. We know that it means young people, who once held jobs to learn responsibility, perhaps a skill, and to earn some money, won’t be hired. We know that businesses will weigh the cost of staffing against automation, eliminating the “better paying” jobs that would have paid somewhat better if they still existed, but they don’t because it’s cheaper to order from a kiosk at McDonalds than to have human being at the counter who complain, slack off, steal, get sick and might claim it’s a hostile work environment.

But there are some other details relating to this shift.

Biden including a $15 minimum wage in his stimulus plan is huge

Biden moving to abolish the tipped minimum wage and sub-minimum wage for people with disabilities in his stimulus package is even bigger IMO

— Hayes Brown (@HayesBrown) January 15, 2021

If you have any familiarity with the circumstances of people with disabilities, which is a large and ever-increasing cohort in the workforce, some employers will provide gainful employment to workers who would otherwise be unemployable. This is a matter of charity, to some extent, as employers try to help people who aren’t necessarily capable of performing jobs, no matter how wonderful they are as people. What becomes of disabled workers if no one will hire them at that rate of pay?

Then comes the restaurant conundrum, where tipped workers weren’t entitled to the same minimum wage as non-tipped workers. Do servers deserve decent pay? Of course, just like anyone else. But will restaurants, whose survival is dubious at best, be able to pay them? This is where the basics of economics gets ignored, but can’t if you want a sustainable fix.

To assert the need for restaurant workers to earn a decent wage is understandable, but it exists in conjunction with the two other pieces of the puzzle. If the restaurant fails, then the servers are out of a job. Where does the money to pay servers come from? And if the restaurant chargers diners more to cover their increased staffing costs, can the diners pay? Do they not exist in the same economy as restaurants and servers?

The point is not to say that these are not questions, values, worthy of debate. The question is whether these are policy shifts that belong in a pandemic stimulus bill, much as was the pork and extraneous crap that was included in the two stimulus bills under Trump. The inclusion of unrelated and, often, dubious changes in law buried in bills that are otherwise popular is nothing new. It’s just that it wasn’t good before, and it isn’t any better now.

As bad as it was under Trump, it’s unlikely to get better under Biden. But now that Trump cost the Republicans the Senate, there will be little moderation beyond those Dems who represent a less radical constituency, and they understand that there are debts to be paid. There won’t be much to discuss, since the cost of getting your $1,400 stimulus check will be eliminating jobs for the disabled, probably the poor, and shoving the knife that final inch into the back of restaurants. The question is whether Biden will have paid off his debt to the fringe elements of his party this way or is this just the beginning of repaying the mortgage?

At least Biden says he’ll prioritize small businesses. Some small businesses, anyway.

"Our priority will be Black, Latino, Asian, and Native American owned small businesses, women-owned businesses, and finally having equal access to resources needed to reopen and rebuild." — President-elect Biden pic.twitter.com/pIyDuhf5pH

— Biden-Harris Presidential Transition (@Transition46) January 10, 2021

The thought is that white people enjoy generational wealth accumulation and own assets that can be used as collateral against their future, while marginalized people rely solely on the government for their survival, so they should be given favored consideration and set-aside funding. While this is shockingly stereotypical based on race, there is significant doubt that this is constitutional. Then again, Biden is bringing Lhamon into the White House, and there are few people who care less about the Constitution.

Biden isn’t Trump. But Biden is still Biden. Buckle up, for the ride won’t be a lunatic claiming to be a stable genius who knows more than the generals, but it will still be bumpy.

*Perhaps the only cases to do worse in court than the Trump election challenges are the Title IX cases following Catherine Lhamon’s “guidance,” where it has lost in hundreds of federal court challenges.