Socialism doesn’t work: Entry 5,003,214,346,227,214…give or take.
Venezuela, the “how not to be a country” poster child, has been in dire economic straights for a long time. That much we know.
In fact, so dire is Venezuela’s economy that a video game’s virtual currency is worth far more than its real-life currency the bolivar. As such, many Venezuelan’s can’t afford simple things like bread or toilet paper.
As a quick fix, Venezuela’s socialist President Nicolas Maduro ordered that minimum wage in the country be jacked up some 3000 percent so that Venezuelans can have a living wage. What resulted was a lot of firings as businesses could no longer afford their employees.
Starting this week, 7 million employees are guaranteed 1,800 bolivars a month — worth about $20 at the black-market rate. President Nicolas Maduro intended the mandate as political boost, but it’s having the opposite effect as companies, already hit by Venezuela’s epic economic contraction, tell workers they can’t afford to keep them.
While there have been many similar moves in the past, never has one been so disruptive, arriving amid hyperinflation, depression and devaluation. Some employers are restructuring costs, rejiggering pay scales and negotiating settlements with workers. Others are simply dismissing people. Much of the action happens secretively as companies try to avoid punishment by the government, which has been jailing those it believes are flouting the rules.
How the Venezuelan government didn’t see this coming is beyond me, but when you’re a socialist dictator looking to score political points in your failing country, the correct answer is always “give someone else’s stuff away.” That it would have brought people back into the realm of milk and honey is a pipe dream. You can’t give to one without taking from another, and when you take too much from one, they run out of stuff for you to give out.
This pattern is seen repeated throughout the world, even here in the U.S.
Starbucks had to close over 100 stores in June in areas where the “Fight for 15” crowd had victories, choosing instead to move the stores to a less expensive area.
In fact, research was done to see what would happen if California was able to secure a $15 an hour for the state by the Employment Policies Institute, and found Californians will have lost over 400,000 jobs by 2022 due to the fact that businesses wouldn’t be able to afford the extra expense.
The punchline is that raising wages does nothing to help. It only leaves people jobless.