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THE INC. LIFE

Here’s 1 Big Lesson You Can Learn From the Alexandria Ocasio-Cortez $7 Croissant Tweet

There’s a reason AOC is so good at sparking national debate.

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BY Minda Zetlin - 03 Apr 2019

alexandria ocasio cortez tweet

PHOTO CREDIT: Getty Images

As so many things do these days, it all began with a tweet that probably took less than a minute to write.

Many opponents of the $15 minimum wage immediately shot back responses, notably Ted Cruz:

The debate piled on from there.

Many critics tweeted or wrote in articles--often with withering condescension--that a $15 dollar minimum wage would only serve to drive the croissant prices even higher. For the record, that's probably not true. A lot of people have argued that a higher minimum wage must lead to higher prices. But 20 states and 24 cities unleashed minimum wage hikes at the beginning of this year, which suggests that if raising the minimum wage led to higher pricing, we should see inflation on the national level increase at least slightly in 2019. In fact, according to the Bureau of Labor Statistics, inflation through the first two months of this year is 1.5 percent, the lowest rate since 2015. We may only be two months into the year, but research suggests that if companies are going to raise prices in response to a higher minimum wage, they tend to do it in the first month after an increase, so the effects from January 1 should be felt by now.

The fact that inflation has slowed (at least, so far) in a year when the minimum wage is up in many places simply reflects an economic reality that most experts--and business owners--know: Pricing is a function of many different elements and influences and is mostly controlled by the rule of supply and demand--that is, businesses will rarely charge more for something than its target customers are willing to pay. The "captive" customer base in places like airports and sports stadiums is what accounts for the high prices there.

In any case, as Ocasio-Cortez explained in a response to Cruz's tweet, her point wasn't that the croissant is too expensive. It was that an hour of human labor for less than $15 is too cheap. That's a point on which many reasonable people, including readers of this website, can disagree, and I'm not trying to settle it here.

But consider: Once again this 29-year-old congresswoman has commanded national attention. Whether you love her or hate her, for that brief moment, her tweet drove the conversation. She did it by the simple means of taking an experience we've all had and all agree about--paying seemingly outrageous prices for everyday items in airports--and found a way to tie it to a larger statement she wanted to make. Next time you're tweeting, posting, or making a presentation, that's a useful tool to keep in mind.

 

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