by Shayne Spence
Billionaire Microsoft investor and advocate of liberal policies Bill Gates was recently on MSNBC’s Morning Joe to discuss what he sees as three myths that block progress for the poor. The Bill and Melinda Gates Foundation provides aid worldwide to low-income countries, so Gates has plenty of experience with what lifts people out of poverty.
After talking about issues ranging from foreign aid to education, co-host Mika Brzezinski asked Gates, “What do you think about the minimum wage? Should it be raised? And should we want to see models more like Costco – where companies pay their employees a lot more than the minimum wage?”
Gates’ response was not what she expected. He said, “Well, jobs are a great thing. So you have to be a bit careful: If you raise the minimum wage, you’re encouraging labor substitution, and you’re going to go buy machines and automate things – or cause jobs to appear outside of that jurisdiction. And so within certain limits, you know, it does cause job destruction.”
Gates also pointed out that lawmakers should look at who minimum wage increases really benefit – “Is it much more the teenager in a wealthy household, or is it that household in poverty? A lot of the problem there is that those people don’t have many hours, it’s not the actual wage level.”
Brzezinski responded, “Well, like fast food workers, I mean, a lot of those people are households in poverty.” To which Gates quickly replied, “88% in non-poverty households, so there is about 11% of those are from the poverty households.”
Shayne Spence is the Outreach and Development Coordinator for the Ethan Allen Institute.