Saturday, February 08, 2014

Minimum Wage Follies

"There is always a well-known solution to every human problem — neat, plausible, and wrong." - H.L. Mencken

Last week, a fry cook dared to complain to President Obama that Obamacare had forced his employer to reduce the hours that he worked. As a consequence, he was having more difficulty than usual making ends meet.

Because this man remains a loyal Democrat, he need not worry that he’ll suffer the same treatment as Joe the Plumber in 2008. In fact, considering the format, he and his question were probably screened and chosen for effect – which makes Obama’s response all the more interesting.

Obama replied that he intended to restore the man’s lot in life by increasing the minimum wage.

You can’t make this stuff up. The increased costs associated with Obama’s signature legislation worsened this man’s economic hardship.  And Obama’s proposed solution is to increase his employer’s burden, leaving the man less employable. The left cannot imagine the obvious peril to this man’s livelihood. 

The left’s only conceivable response to the devastation that Obamanomics hath wrought is more Obamanomics. Ignore the fact that the Congressional Budget Office just predicted that Obamacare is likely to cut over 2 million more jobs from the workforce by 2021. Never mind that, in 2010, then Speaker of the House Nancy Pelosi promised that Obamacare would create 4 million new jobs, “400,000 almost immediately.”

Past performance predicts future results. We may not want to place much trust in the Democratic Party’s economic policies.

Past performance also predicts another future result. With an electoral catastrophe threatening in November, the Democratic Party is seeking to distract the voters from its record; five years of economic stagnation, millions more people without health care insurance than when they started fixing things, and a far less stable world than the one that they inherited.

 In 2012, the Democrats changed the subject by inventing the imaginary War on Women. And even though reasonable people saw through this as ludicrous, the news media obediently joined the castrato section of the chorus and a meme was born.

For 2014, they’ve already telegraphed us their distraction. And it’s “income inequality.” Just how far the media will go to promote Democratic Party solutions to problems that Democratic Party policies created should make for entertaining reading.

When the Democrats trot out some 35 year-old head of a household who has been toiling in a minimum wage job for ten years, it tells us much more about the quality of people dependent upon the Democratic Party than it does about the morality or adequacy of the current minimum wage.

Here are a few facts about the minimum wage that need be a part of the debate.

First of all, according to data from the US Labor department and the Census Bureau, only 2.8% of workers earn the minimum wage and only 20% of them live in poverty. Most minimum wage earners make only a secondary contribution to a household’s income. Half are very young people in entry level jobs.

Should those jobs evaporate, many low income households now above the poverty line will fall into poverty.

But as bad as Obama’s solutions are, they pale in comparison to what Washington’s Democrats propose. While Obama wants to raise the federal minimum wage to just over $10 per hour, Seattleistas think that $15 is an even better idea.

Restaurants are already preparing for this with consoles that will replace the employees who stand behind the cash register taking your orders. Waitresses and paper menus are already being replaced with tablet computers that take your order wirelessly. Hamburger-making robots that can produce a gourmet quality burger, at half the price, are already available. Recently, a vending machine capable of assembling custom-made burritos to your specifications has found its way onto the market.

Raising the minimum wage will even eliminate those jobs that Americans just won’t do. A new, fruit-picking robot is nearly ready for use in the orchards. This machine can accurately select ripe apples from among those that need a few more days on the tree.

Overpriced and unreliable labor is always at risk. Work that can’t be done by robots will be performed overseas in nations with large pools of low cost labor and business-friendly climates.

If you believe that the US is still a great place to do business, consider that the World Bank ranks the US behind Rwanda, Azerbaijan and Belarus in new business creation.


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