The Unreal World of Ralph Nader

April 19, 2013
by Bob Adelmann

Ralph Nader’s latest crusade is to get Congress to raise the minimum wage back to 1968 levels when it was $1.60 an hour. Adjusted for inflation (thanks to the Federal Reserve, which Nader fails to credit), that would mean that the federal minimum wage should be $10.50 an hour instead of the paltry $7.25 an hour that it is today.

He started his campaign in March in Connecticut by picketing some Walmart stores near his hometown. His protest was dutifully covered by the local media. When he picketed in Avon, Connecticut, he was surrounded by 13 ardent fans who also believe in miracles.

He asserted that, by paying them just the minimum wage, workers at places like Walmart are being “short-changed” – rendering them unable to even “buy necessities.” One of his supporters agreed, saying that “improving the wages of Walmart workers and other will have a ripple effect in our economy.”

It didn’t faze Nader when the true facts were disclosed by Kory Lundberg, a Walmart spokesman, who pointed out that the average full-time hourly Walmart employee in Connecticut already makes $13.66 an hour. And that number doesn’t take into account bonuses that Walmart pays out ($770 million last year) or the fact that employees enjoy a 10% discount while shopping at the store, worth another $550 million.

No matter. A crusade is a crusade. The show must go on. Last Friday, he showed up at the National Journal for an interview to promote the message that he now calls “Catching Up with 1968.” He said that if the minimum wage were raised to $10.50 an hour, more than 30 million workers would immediately get a raise. That would be good for the economy because the new money would then be spent, which would generate more jobs and more income and more jobs and more income and so forth, on and on, into the woodwork.

Nader believes so strongly in the myth he is promoting that he is now “negotiating” with top people at the hated Walmart to get them to raise their wages, “Not because they’re interested in doing something that will help people, necessarily, but for their own bottom line – they would profit enormously.” After all, Nader said, “They’re going to spend [their raises] at Walmart!” He no doubt added to his negotiating advantage by exclaiming:

Walmart’s asset is they think most of the people they hire are flotsam and jetsam and couldn’t get a regular job anyway. So they think they’re doing people a favor, and they think they’re a major antipoverty group. There’s a huge self-righteousness there….

Nader upped the ante in his crusade by reiterating his economic illiteracy in a letter to the Wall Street Journal (which it amazingly felt was worthwhile to publish), in which he said:

When low-wage workers receive a wage increase, they spend that money back into the economy to pay for the necessities of life….

Nader is not alone in his ignorance of how the real world works. He quoted:

Studies from the Economic Policy Institute indicate that a $10.50 hour minimum wage would increase economic activity by at least $30 billion over each of the first two years and add 140,000 jobs.

All of this was just too much for clear-headed thinkers who have studied the matter for years, such as Mark Perry and Donald Boudreaux. Perry took one look at Nader’s rants and said:

Wow, if only it was that easy!

And if it really was that easy, wouldn’t a 60% or 70% or 80% increase in the minimum wage create an even bigger economic stimulus and add even more jobs?

Boudreaux piled on, asking: “From where comes the money to pay the higher wages that low-skilled workers will then spend? Mr. Nader apparently assumes that it materializes out of thin air.”

Boudreaux then suggested that if raising the minimum wage made so much sense, why not pass a law establishing a “minimum clothing price” so that Walmart, Target, and all other retailers would be forced to raise clothing prices? After all, if Nader is correct,

These firms would then have more money to spend. That spending would raise the demand for clothing sufficiently to make it profitable for them to sell as much clothing as they like at those higher prices.

That this foolishness is allowed a significant public forum is a measure of the economic ignorance extant among the illiterati. Thankfully there are others who see the falsehoods and ignorance that underlie such rantings.

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Sources:

Ralph Nader’s Newest Crusade: Raising the Minimum Wage

Ralph Nader Pickets Walmart, Calls for Federal Minimum Wage Increase

What about a “minimum clothing price” law?

Maximum Illogic

Ralph Nader

America’s Miserly Minimum Wage Needs an Upgrade

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