Want to make income inequality worse? Elect Bernie Sanders
By Isaiah Garner
As we head into the 2016 presidential election, many people have been surprised with how well Bernie Sanders is doing in the polls. A self-proclaimed socialist, Sanders's plan for the U.S. economy seems to be attractive to many Americans. But many of his ideas would prove to be disastrous if they were ever implemented. In this essay, I will be focusing on the problems with three of Sanders's plans to ‘reduce income and wealth inequality' in America.
Bad Idea Number 1: ‘Demanding the wealthy and large corporations pay their fair share in taxes.'
Whenever you see the word ‘fair', a warning bell should go off in your head. Judging whether or not something is fair is completely based on personal opinion. In fact, the wealthy are already paying close to 50% taxes. If we raise taxes for the wealthy even more, people will not work as hard to become rich. After all, why would someone want to spend a lifetime working hard, just to be punished for it by paying extremely high taxes? If you reduce the incentives for becoming rich, fewer people will try. If fewer people try to become rich, the American economy will go down the tubes because of a lack of worth ethic.
Bad Idea Number 2: ‘Increasing the federal minimum wage from $7.25 to $15 an hour by 2020. In the year 2015, no one who works 40 hours a week should be living in poverty.'
It is true that raising minimum wage to $15 an hour would bring some people out of poverty. But for every person who benefits from a higher wage, there will be many others who are unemployed or unable to enter the labor force because wages have been set way above equilibrium. As you can see in the graph below, this will cause a surplus of labor. Many people will want to work at $15 an hour, but firms will have to compensate for the higher wage by hiring fewer employees. This will lead to higher unemployment and actually increase income inequality.
Bad Idea Number 3: ‘Making tuition free at public colleges and universities throughout America. Everyone in this country who studies hard should be able to go to college regardless of income.'
To illustrate the error in this kind of thinking, let's talk about the Super Bowl. According to Stubhub, tickets to the 2014 Super Bowl sold between $1,964 and $353,180 leading up to the big game. With these enormous prices, who do you think would be willing to buy a ticket: A fanatical life-long fan of the Patriots, or a person who only has a passing interest in the Super Bowl and only pays attention to when the commercials come on? Of course, the fan is much more likely to buy the ticket that the commercial-watcher.
Now, here is my main point: Because the opportunity cost of going to the Super Bowl is so high, only people who love football will attend. Likewise: Because the opportunity cost of going to college is so high, only people who love learning will go. What will happen if you let all students go to college for free? Not only will the U.S. get even further into debt, many students who do not care about learning will attend college. Is it a good idea to spend hundreds of millions of dollars to send careless, unprepared students to college?
Bernie Sanders heart is in the right place when it comes to income inequality. However, his head is in the entirely wrong place. Raising taxes for the wealthy, increasing minimum wage and making college free may sound like good ideas. But when you look at the economic principles behind Sanders's plan, it becomes obvious that Bernie Sanders' policies would wreak havoc on the economy and make income inequality worse.
NOTE: All information is this essay about the opinions of Bernie Sanders on how to fix income equality are direct quotes from his official website: https://berniesanders.com/?nosplash=true/
© 2015 Isaiah Garner