Feeling the Bern, Donald Trump had to completely retract one of his key points that he has been repeating over and over again. After he was called out on his gibberish by Bernie Sanders, Trump took back the statement and reversed his position.
Trumps was nailed on his statement that wages were too high in a presidential debate. In a follow-up on MSNBC he said “We have to become competitive with the world. Our taxes are too high, our wages are too high, everything is too high.” Through his statement, he was implying that workers are paid too much.
In response, Bernie Sanders called out Trump, saying that our wages are actually too low and workers should be paid more. He also pointed out that the rich are getting all the benefits from low wages saying “[T]his is a guy who does not want to raise the minimum wage. In fact, he has said that he thinks wages in America are too high. But he does want to give hundreds of billions of dollars in tax breaks to the top three-tenths of 1%.” After hearing that, Trump quickly retracted, posting a series of tweets attacking Bernie Sanders personally while stating that he thinks wages are actually too low.
The debate about the minimum wage and whether or not wages are too high is a key debate between Republicans and Democrats. Republicans argue that a minimum wage kills jobs because they make hiring people to expensive. As a result, businesses lose money and close down, which ends up reducing the total number of jobs. They also argue that it makes us noncompetitive in the global market. Donald Trump argues that we are losing jobs to China and other countries because our wages are too high and our factory workers are paid too much.
However, the response to these accusations are fairly clear. First of all, corporate profit rates are historically high and there is much more room for an increase in employee costs. Secondly, increasing wages would actually end up benefiting companies more because the lowest paid workers will spend every penny of increased income. That results in more revenue for big companies. On the other hand, when the rich receive tax cuts, they only spend a portion of those benefits, so the resulting benefit to the economy is lower.
Secondly, we actually do not want some of the jobs that we have lost to China or the other lowest income countries. Bringing back sock factories where workers are paid $1 an hour would not help the economy because those workers would need so much government support just to get by. Instead, it makes more sense to invest in new technologies and industries that generate higher wage jobs, rather than try to get back the worst paying jobs.
Lastly, the income inequality is historically large. The rich keep getting richer while the poor are getting poorer. A raise in the minimum wage would counteract that trend only in the smallest way.
Overall, the argument is clear. Trump got Berned and he was forced to retract his ridiculous statement about wages.