Peter Schiff on Why He Believes the Minimum Wage Hurts Workers

don't you agree? There should be a minimum wage that are in demand There's plenty of people that are bidding against me for those same workers, right? And so I have to pay the market rate. I can't just underpay them. They'll go work someplace else I understand. Do you think there should be a minimum wage? No, there should be zero minimum wage. Wow. That's we discussed that before I know but I still always freak out when you say that. The reason that I don't think there should be a minimum wage is because I think Individuals should be free to accept employment opportunities that they want to accept. See the minimum wage doesn't hurt businesses It hurts individuals that have low skills Right and that's always the problem when you when you have people defending the minimum wage They are opposing minimum wage hikes. They always say oh, it's gonna hurt businesses because you know It's gonna increase their labor costs You know what? It doesn't necessarily increase their labor costs because they don't hire as many workers, right? They hire skilled workers instead of unskilled workers. They automate they find ways to do without workers. They outsource They hire people in other countries the minimum wage law hurts the most Low skilled people and they tend to be young people teenagers minorities That should get get hit the hardest, you know before we had all these programs You know that the black teenage unemployment rate once upon a time was actually lower than the white teenage unemployment rate Now it's like double or triple as high but before we had all these laws It was actually lower because they got disproportionately impacted by the minimum wage law, which prices them out of work I mean, when were these laws implemented? When were these laws implemented? Well, the minimum wage didn't really start until the Great Depression Alright, so it started but it didn't apply to there were a lot of jobs that it were exempted from it So it really started kicking in more in the 1960s and then it really you know started Can I ask you this playing role? Has anybody ever tried to have no minimum wage as an experiment like maybe a town or a city? Well, first of all, we had no minimum wage before it was implemented and we had much lower rates of unemployment real unemployment And this is a great country that don't have the minimum wage. There's not that many left anymore I mean most countries have made this mistake because the minimum wage is good politics because it sounds good, right? If you're for the minimum wage, it sounds like you care, right? Oh, yeah We you know, is anybody against you know people working for low wages? No, okay, so it sounds good But all you do is you destroy jobs and you destroy employment opportunities But there are countries like Singapore for an example has no minimum wage, you know Wait a minute don't think you don't they can you Singapore don't they cane you a few graffiti shit? Right Found it behind that over there. That was that was a famous place. I'm talking about that. I know we're talking about me wage I mean there's other countries that have some kind of weird minimum, but if you know, it's not the same as as ours I feel like I feel like there could be a Minimum wage and we still hold the same values that you're talking about in terms of competition to keep people from getting fucking shitty With their employees Have you ever seen an employer like yell at their employees or like being like one of those? corporate gathering situations where someone has a lot of control over their employees now imagine if That guy was making all the money and he was only giving these employees a dollar an hour and making them Wait, but it's not slavery I agree with you only remaining your job if you like it if you think it's the best alternative look people quit all the time Because they can get a better job, right? so by definition if the best job I can get is the job I have and Nobody will offer to pay me more money then I'm not underpaid if nobody will pay me more. It's a free open market There's all kinds of employers out there and remember you're free to work for yourself Nobody forces anybody to accept a job. Everybody can start their own business. Everybody can be self-employed, right? So if you don't think your boss is paying you what you're worth then quit and and start your own business. I feel I Completely feel where you're coming from but couldn't we just say that? There's a level of pain if you make someone work 40 hours a week and they don't have enough money for food or shelter After 40 hours a week couldn't we say that maybe that is not a good level like let's let's just as a community So everybody agrees we're all competing But let's let's make it so that if someone is under your employment and it's a human being and they're doing 40 hours of work Every week they should have enough money for food and shelter that seems reasonable as a community I know what you're saying in terms. I know what you're saying from like this economic standpoint I know what you're saying like let you free market capitalism Let it ride figure it out get paid what you're worth and if you don't feel like you're getting paid enough quit I understand what you're saying, but wouldn't it be nice backtrack then? Okay, so good in general, right? If you don't have any skills Right if the most you're able to earn at your job and let's say there's no minimum wage and you're just a young kid You don't have any skills, right? And the most you can earn is four dollars an hour. That's because Again, it's you're paid based on your productivity Businesses are there to make a profit for the owner of the business because that businessman is taking a lot of risk He's bearing the potential for losing money. Of course, you know, and so a Businessman is not gonna hire somebody if they're not adding value to the business. So if somebody can add $5 of value to my business. I'm not gonna pay them 725 an hour because I'm gonna lose 225 for every hour that person works So the only way I can hire somebody who is providing Five dollars worth of value is if I can pay him four dollars and then I can make a dollar for every hour He works. I'm not the business is not there to lose money. They're there to make money So let's say you're a young kid and you can only provide five dollars worth of value And so you get a job for four dollars and your employer makes a buck an hour off of you Chances are you don't have a family you're young you're living with your parents. You don't have rent You don't have you know, yeah, so making a little bit of money is okay You just need some spending money to go to a movies or maybe go out on a date or something You don't need a lot of money. What's important is the work experience having that job Developing some skills get your foot in the door step on that first ladder of the job the rung of the job ladder So that by the time you're 30 and you're ready to settle down and get married and have kids You've now increased your skills to the point that you can make $50 an hour where you can Afford to support a family if you try to tell a business that you need to pay Somebody who has no skills and as minimal economic value if you have to pay that person enough so that you can support a family Nobody's gonna hire that person. All you're doing is pricing those people out of a job So it's really good to say it's not right if somebody is working and only making you know Ten dollars an hour and they can't support a family. It's not the employers responsibility It's not his fault that he's hiring somebody that doesn't have a lot of skills And if you impose that minimum wage all you're doing is making it impossible for this guy to get a job It really what the minimum wage law is is it makes it illegal for you to work? Unless you have enough a certain amount of productivity So if the minimum wage is $15 an hour what that means is if you only have ten dollars an hour work of productivity Right you can't work that you have to turn down every offer of employment you get if someone offers you ten dollars twelve dollars That's illegal. You can't accept those jobs Even if you want them even if you think that that's the beginning of your first step on a road to higher wages in the future The government says no You can't accept that unless you can find somebody who will pay you fifteen dollars an hour It is illegal for you to have a job and that is not good economic policy That is and it's not even compassionate because now you've taken away all the honest Ways that somebody can make a living and they end up turning to crime a lot of times I see what you're saying and that actually makes a lot more sense the way you're framing it about like if you only provide ten dollars worth of Value to the company. Why should they pay you fifteen dollars and they won't I think I agree with you I see what you're saying. I see what you're saying. You're making me think about it in a different way for sure I think a lot of people would say well if they're really only providing ten dollars worth of value Do you really need that person? Sure, I mean ten dollars worth of value is still value. Yeah, I see what you look think of all these look I get very frustrated all the time. You know when I make phone calls And I can't talk to a human being I have to talk to a a computer Yeah, and and the reason for this is because they we've priced the human beings out of the market Well, you know what else is interesting Peter What's it what's horrible about this for all of us is when you do do that and you know you you're dealing with these? Goddamn computers. It's like where we're losing part of our connection when it comes to doing business We're doing I like if I do business with a company. I like to be able to call them up I like to there's I'd love it if there's a thing when I'm when I'm doing something I'd like to make contact with the person if everything is being done through automated systems. It's getting weirder and weirder for us More and more look at you remember do you remember back the original back to the future movie? Yes remember when when he when he goes back to 1955 for the first time and he sees that car pull into a gas station and like five people descend on the car and start Watching the windows. Yeah, I got the tires doing all that stuff, right? What happened to all those people? Stations were like sorry for the minimum wage. Did you know where's jobs? I worked in a gas station Do you ever work in a gas station? I never did but I look I delivered groceries. I delivered pizza I worked in a shoe store I had all kinds of jobs in high school that you know, the probably kids don't have those opportunities today They just think they think they can't get but going back to the gas station, right? Do you like pumping your own gas? I do because I used to I used to work at a gas station and I know what happens when you let kids pump your fucking gas I don't want anybody. They spill it they fuck up There's some weirdos got a highly flammable fluid next to a piece of your property and they get to stick it I think look I think if we didn't have a minimum wage You'd have a lot more kids working mostly for tips. I mean we used to tip if you remember I'm still old enough to remember Tipping the guy then pump my gas. Yes, they check your tires But but you know what used to happen these young kids that got low paying jobs as pump jockeys What they would do between Phillips is they would go and hang out with the mechanic Yeah was there working on cars and they would get a free education and auto mechanics and they would actually learn a trade Have you guys I mean we'd have more auto mechanics. They get a skill some of these guys would end up, you know Opening up their own service stations. Look, it's yeah, it's good to allow young people to have employment opportunities Not to price them out of the market by just by mandating a minimum wage I mean the minimum wage benefits high skilled workers unions by by eliminating competition with younger, you know lower skilled workers You're forcing employers to hire high skilled people instead of a more numerous Number of lower skilled people that that's what happened. Have you ever seen the movie The Hustler with Paul Newman Jackie Gleason? Yeah, it's a great movie. I saw the remake with with What's his name Tom Cruise Tom Cruise But the point my point is they're both good movies they're great movies But in the beginning of The Hustler Paul Newman pulls into a gas station and he tells the guy check the air and tires Check the oil do all this and in the guy fill them up mister They go out there and they have like they they do all kinds of shit for you It's not just as simple as they pump your gas. They pump your gas check your tires check your fluids They do everything but there was less people Cars were in better shape because you know every time you went into a gas station Somebody made sure you had enough oil and made sure your tire pressure was good Well, we're reliable today. Those were those cars were bullshit those cars Like you had to check the air you had to check the tires. It was bleeding oil But it's just interesting to see the difference. They used to have look they used to have ushers in movie theaters Yep, I would just show you to your seat with with the there was the service sector has really been obliterated all these low-skilled Look, they're working on these kiosks now. Look, they're gonna get rid of all the workers anyway, ultimately all these fast food restaurants There's not gonna be anybody there. They're all gonna look like self-serve gas stations Yeah, you're gonna go in you're gonna order off your smartphone and the food is gonna You know come come down a shoot through some machine. You can't there's there's gonna be nobody there