Categorized | Commentary/Editorial

Obama: With the teen unemployment rate at 23.4%, now’s a great time to raise the minumum wage and index it to inflation





If you haven’t read Governor Palin’s summary of Obama’s speech last night, be sure to go here and read it. The Governor was all over the many ridiculous statements Obama made, and she does an excellent job of pointing out the yawning chasm between reality and Obama’s alternate version of reality. In addition to the many examples she called out attention to, there was something else Obama said in the middle of last night’s State of the Union show. Obama, who’s never created a single private sector job in his life, uttered the following:

“Tonight, let’s declare that, in the wealthiest nation on Earth, no one who works full time should have to live in poverty — and raise the federal minimum wage to $9 an hour.”

Why not make it $20 an hour? Or $100? A short time later, Obama followed that up with this pearl of wisdom:  

“…we need to build new ladders of opportunity into the middle class for all who are willing to climb them.”

Question: Can anyone point out the contradiction between Obama’s above two pronouncements? The only practical effect of the minimum wage, of course, is to yank that ladder out of the hands of the least-skilled in society. How will these low-end workers ever be able to develop the skills and human capital necessary to escape low-paying jobs if they’re not productive enough to justify the minimum wage? The short answer is they can’t, because they aren’t legally allowed to work for a wage commensurate with their productivity. The last time the minimum wage was increased, the teenage unemployment rate skyrocketed to the highest level ever recorded. With the teen unemployment rate still hovering at a catastrophic 23.4%, does Obama seriously thinks raising the minimum wage by another 24% is a good idea? Is this what he considers a "ladder of opportunity"? Minimum wage increases kill jobs, period. This is not rocket science.

But Obama wasn’t finished. He also wants to index the minimum wage to inflation so that it rises every year, thus creating an ever-expanding permanent underclass of unemployable workers who will never be able to find purchase on that ladder to which Obama refers because indexation will eliminate the lowest rungs on the ladder every year. Just as some low-skill workers see their productivity rise such that the bottom rung is in sight, Obama will snatch it away via indexation each and every year. Where did Obama get this indexation idea? If you listen to what he said last night, it’s easy to conclude that he got it from the same place he got his idea for Obamacare:

So here’s an idea that Governor Romney and I actually agreed on last year: Let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on.

About a year ago, when we first learned of Mitt’s affinity for minimum wage indexation, I predicted Romney’s support of this asinine idea would provide political cover to the Left, and that sooner or later they’d attempt to use it:

It was only a matter of time before liberals realized the gift Romney gave them with his announced support of minimum wage indexation, and those at the Washington Post were quick to exploit the opportunity Mitt gave them.  Obama and others on the far left have always revved up their base by promising to index the minimum wage to inflation.  Despite the fact that none of their members earn the minimum wage, Obama’s union buddies in particular are big supporters of the job-killing scheme since it reduces competition for union members in the unskilled labor market.  Obama promised to pursue indexation during his 2008 campaign and we again see it in his 2012 platform. But despite their campaign rhetoric, we rarely see any concrete legislation promoting this job-killing scheme.  Obama never formally proposed this, even when he had super majorities in both houses of Congress sufficient to ram ObamaCare down our throats (which has made elements of his kook base most unhappy).  Why?

The answer is simple: Even many liberals know this will effectively create a built-in job killer which will bite the economy each and every year as employers are forced to lay off those workers whose productivity doesn’t justify the artificial price floor imposed by Washington. Since Republicans, at least until Mitt Romney, refused to go along with this self-destructive measure, Democrats didn’t want to assume sole ownership of a hare-brained law that the overwhelming majority of economists — and empirical evidence — agree will inevitably increase unemployment among the ranks of unskilled and low-skilled workers each and every year when the COLA is applied.  Democrats have been content to use the issue mainly in deep blue districts to rally their uneducated Democrat voters (a redundancy, I know) by painting Republicans as “out of touch” or something, knowing full well the proposal was never going to become law.

But those days are over since we’re now faced with the appalling likelihood that Mitt Romney will be the standard bearer for the Republican Party.  And given that Romney is in favor of such an abomination to free markets, how can Republicans oppose it?  Ann Coulter and other Romney apologists have been forced to tie themselves in knots to justify government decreed mandates that private citizens enter into private contracts under the force of law as a conservative stratagem.  Now, assuming Mandate Mitt does indeed secure the nomination, Republicans will be forced to justify minimum wage indexation. They’ll have to in order to support his candidacy. I’ve written several posts in the past ridiculing Democrats for their support of the minimum wage. I never thought I’d be writing them about a Republican candidate for president, though.  But that was before Mitt came to town.

The irony is palpable. As the Wall Street Journal notes, even the “Pelosi Democrats” avoided legislative action to index the minimum wage to inflation when their party controlled both Capitol Hill and the White House. Despite the protestations of their base, they knew it was too risky politically. Not anymore. If Romney’s the Republican nominee, they’ll have their cover.  If they’re smart, they’ll name the legislation the “Mitt Romney Minimum Wage Indexation Law.

 They waited longer than I thought they would, but where liberals are involved, bad ideas never die. Just last month, the geniuses at the New York Times also called for a minimum wage increase. With the economy about to feel the brunt of Obamacare, expect a concerted effort by Obama and his surrogates in the mainstream media to shift the focus from Obama’s disastrous policies. Liberal nonsense like the minimum wage and "free" birth control, to name just two, are perfect issues for them to focus on in order to distract the public from the real cause of their misery: Obama and his far-left policies.



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  • http://lenbilen.com/ Lennart Bilén

    The last time the minimum wage was increased Obama voted against it. You see, it was more important to deny our armed forces the funds to continue the Iraq war and make the surge succeed than to increase the mimimum wage. Those two were bundled together into one vote.
    By the way, Hillary Clinton voted against it too.

    These are notmal politicians.

    Sarah Palin 2016 – if not sooner!!

  • John_Frank

    Doug, thanks for this post.

    As to the effort by Obama et al to shift the focus, that is why we must keep the focus on the real problems, along with offering up viable solutions that make sense and will work.

  • MarkRNY

    What’s more frightening is that there are 10s of millions who think this is a good thing.

    Difference this time is that there are millions out of work who might realize now how destructive this touchie feely Leftist crap is–but do we have an Opposition Party that isn’t terrified to touch it?! And the opposition to it shouldn’t be mumbled furtively, it should be slammed in their faces! This is insanity and/or intentionally destructive, not just a "bad idea".

  • CBDenver

    Here is the flaw " Let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on."  The minimum wage is not intended to be a wage you can live on.  It is the wage that inexperienced workers start at.  After gaining valuable job experience, a worker then either asks for a raise or moves to another job where he can earn more money based on his previous work history. 

    Businesses can’t hired unknown entities who have no job history or experience at a high wage.  The lower wage compensates the business for all the on-the-job training that the inexperienced worker will need.  Most businesses will bump the wages of new hires after they have proven they can do the job and be productive.  That is the true "ladder to success" — get your foot in the door, gain experience, prove you can do the job, and then you are worth a higher wage.

  • conservativemama

    Pass the Excedrin please.  I have a headache that won’t stop.  It really sucks to be intelligent, aware, and economically literate in the Age of Obama.

  • freeperjim

    Comrade Ubama is a communist who hates America, our Constitution and free-market business.

    This is simply another way to punish the free-market job creators and force more to become dependent on Big Socialist Government.

    It has ZERO to do with creating jobs or growing the economy.

    Ubama the communist/mooslum continues his undeclared war/jihad on America and uses Taqiyya to implement his plan of destruction.

  • c4pfan

    Just another reason why I knew Romney would lose!

  • DougBrady

    test

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