At a time when unemployment is at a multi-year high and rising, what do Congress and the President do? Raise the minimum wage, of course. A minimum wage is a bad idea under any circumstances, but to raise it now is a blatant display of political cynicism.
Labor is a commodity and wages are the prices. High unemployment means the labor supply exceeds the demand. It’s like a car dealer with too much inventory raising the prices. It only exacerbates the problem. I know, this is so basic it should be unnecessary to say it.
What about the “living wage” canard? Not every job needs to be able to support a household to have value. The lowest paying jobs are entry points to get people started up the job ladder or a source of supplemental income for low skill second earners and pensioners or teenagers living at home.
The minimum wage is the reason we already have such high unemployment among the young and minorities. You can not make a persons labor worth more to an employer simply by raising the minimum wage. All it does is raise the bar preventing that low skill or entry level person from getting an opportunity to climb that economic ladder.
The minimum wage (MW) is the government telling a person that he/she may not sell his/her labor for less than the government-mandated price, now, $7.25 per hour. If his skill level is such that no one will pay him that much, tough. Is it any wonder that so many young people turn to crime? Stupid government policy makes crime a rational career choice for many.
Another argument one hears for the MW is that it gives people more money to spend. Nonsense! It redistributes money, giving those with jobs a little more, but causing others to lose their jobs entirely or be less likely to find one. Plus, as market conditions permit, employers, to remain profitable, soon will pass on the increase in the form of higher prices. So people with jobs may be slightly better off for a short time, but everybody else is worse off. It is, in effect, a regressive tax.
Politicians, even as stupid as many are, know this. But they do it anyway because it is “feel good” policy that plays well with the average voter and because it is another payoff to the unions. I know, union workers don’t get MW. But when the MW goes up it eventually pushes wages higher all the way up the scale. Many union contracts even have clauses triggering a raise whenever the MW is raised.
The result of the new MW increase, especially coming during this period of rising unemployment, will be even higher unemployment, especially for the young and unskilled.
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Saturday, July 25, 2009
Thursday, July 23, 2009
ObamaCare About Ideology, Not Health
Going back to the time before abortion became, as Sonja Sotomayor says, settled law, the left insisted that “the government should stay out of a woman’s body,” and that a woman’s reproductive health, i.e., her right to kill her unborn baby, was “between her and her doctor.” Now that the issue is another one of their Holy Grails, healthcare, they insist that the government get into everybody’s body and that you and your doctor should have very little to say about it.
When Obama was campaigning he promised that we all could have health insurance plans just like members of the Washington mafia, otherwise known as Congress. But when the 1500 word plan appeared, Congress and all federal employees were excluded. He also claimed that you could keep your current plan. Forget that: the Lewin Group projects that 83 million people will lose their insurance because employers will drop their plans and pay the 8% additional payroll tax instead.
Although there are 1,300 insurers competing for the business, Obama’s Chief of Staff, Rahm Emanuel, says we need a government insurance provider, the so-called Public Option, “to keep the private insurers honest.” Then why don’t we need a government auto insurance option? For that matter, since food is a greater need than health insurance, why not have government farms and grocery stores? No, the purpose of the public option is to drive out private companies with a taxpayer-subsidized competitor, leaving the government as the sole provider.
The two reasons we need a government system, say proponents, are the 45 million uninsured and to reign in rising costs. Re: the uninsured, see this blog, June 25"Politics Trumps Healthcare." As for reducing costs, the Director of the Congressional Budget Office said that Obamacare would not significantly reduce the upward trajectory of healthcare spending and would, over ten years, add $239 billion in budget deficits.
Now Obama says he will pay for this socialist fantasy by putting a surtax on people earning over one million dollars per year, pushing our top tax bracket above those of France and Italy. He believes taxpayers will not change their behavior in response to incentives, in this case negative incentives,to avoid higher taxes. Plus, there is less money to be had here because this is the group whose income has been hit the hardest by the current downturn.
Obama and the Congressional Democrat leaders, like all socialists, are levelers. What they want, on purely ideological grounds, is a European/Canadian-style, government run system with equal, albeit lower quality, healthcare for everyone. Except, of course, themselves.
When Obama was campaigning he promised that we all could have health insurance plans just like members of the Washington mafia, otherwise known as Congress. But when the 1500 word plan appeared, Congress and all federal employees were excluded. He also claimed that you could keep your current plan. Forget that: the Lewin Group projects that 83 million people will lose their insurance because employers will drop their plans and pay the 8% additional payroll tax instead.
Although there are 1,300 insurers competing for the business, Obama’s Chief of Staff, Rahm Emanuel, says we need a government insurance provider, the so-called Public Option, “to keep the private insurers honest.” Then why don’t we need a government auto insurance option? For that matter, since food is a greater need than health insurance, why not have government farms and grocery stores? No, the purpose of the public option is to drive out private companies with a taxpayer-subsidized competitor, leaving the government as the sole provider.
The two reasons we need a government system, say proponents, are the 45 million uninsured and to reign in rising costs. Re: the uninsured, see this blog, June 25"Politics Trumps Healthcare." As for reducing costs, the Director of the Congressional Budget Office said that Obamacare would not significantly reduce the upward trajectory of healthcare spending and would, over ten years, add $239 billion in budget deficits.
Now Obama says he will pay for this socialist fantasy by putting a surtax on people earning over one million dollars per year, pushing our top tax bracket above those of France and Italy. He believes taxpayers will not change their behavior in response to incentives, in this case negative incentives,to avoid higher taxes. Plus, there is less money to be had here because this is the group whose income has been hit the hardest by the current downturn.
Obama and the Congressional Democrat leaders, like all socialists, are levelers. What they want, on purely ideological grounds, is a European/Canadian-style, government run system with equal, albeit lower quality, healthcare for everyone. Except, of course, themselves.
Friday, July 10, 2009
G-8 Global Sham
The heads of the G8 nations, including, of course, our own Messiah, have decided to put a lid on global warming. Yep, now that evidence is mounting that the earth is not warming and, in fact, may be cooling, our fearless leaders have committed to cap the planet’s temperature increase at no more than 2C or 3.6F degrees.
Yes, the same geniuses who can’t balance their nations’ budgets or stop tinhorn, nutcase dictators from acquiring, and threatening their neighbors with, nuclear weapons have decided to tackle a more realistic goal, controlling the temperature of Earth.
Just to be on the safe side, they set the deadline out at 2050, by which time they all will be safely out of office. Not that it really matters, anyway, because China, the biggest greenhouse gas emitter, and India are not signed on. They are perfectly willing to let the west commit economic suicide. Not that any of the signers, perhaps, alas, save Obama, have any intention of following through. They all signed on to Kyoto and then, wisely, forgot about it.
This charade has two objectives: placating green voters at home and trying to put each others countries at an economic disadvantage. The only objective they are really committing to is using the most egregious scientific hoax of our lifetime to scare their citizens into surrendering more freedom to the ruling-class.
Yes, the same geniuses who can’t balance their nations’ budgets or stop tinhorn, nutcase dictators from acquiring, and threatening their neighbors with, nuclear weapons have decided to tackle a more realistic goal, controlling the temperature of Earth.
Just to be on the safe side, they set the deadline out at 2050, by which time they all will be safely out of office. Not that it really matters, anyway, because China, the biggest greenhouse gas emitter, and India are not signed on. They are perfectly willing to let the west commit economic suicide. Not that any of the signers, perhaps, alas, save Obama, have any intention of following through. They all signed on to Kyoto and then, wisely, forgot about it.
This charade has two objectives: placating green voters at home and trying to put each others countries at an economic disadvantage. The only objective they are really committing to is using the most egregious scientific hoax of our lifetime to scare their citizens into surrendering more freedom to the ruling-class.
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