Free Markets, Free People

Unemployment the people’s main priority? So let’s hike the minimum wage …

A poll came out the other day saying that the majority of American’s first priority is unemployment.  And it should be given the incredible low we’re now suffering in labor force participation.

So what bright idea are Democrats pushing in spite of that?  Hey, let’s raise the minimum wage?

Result? Well, even the CBO, the Dems favorite “go to” agency to support their ideas (when it actually agrees, of course), doesn’t see this as a particularly bright idea if they’re concerned about the people’s priority:

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects.

Notice it says reduce “total employment” by 500,000.  It also says it is only a projection and that it could actually be higher than that.

Wonderful.

But, but … it will help the poor!

The increased earnings for low-wage workers resulting  from the higher minimum wage would total $31 billion, by CBO’s estimate. However, those earnings would not  go only to low-income families, because many low-wage  workers are not members of low-income families. Just  19 percent of the $31 billion would accrue to families  with earnings below the poverty threshold, whereas  29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates.

Or said another way, Democrats are willing to see a half million plus lose their jobs to serve 19% (and that assumes that all of the 19% keep their jobs).

But, but … it will give the poor more to spend!

Moreover, the increased earnings for some workers would  be accompanied by reductions in real (inflation-adjusted)  income for the people who became jobless because of the  minimum-wage increase, for business owners, and for consumers facing higher prices.

Those are facts, folks.  Democrats don’t deal in facts, they deal in emotions … and if they can pass a minimum wage bill, they’ll feel wonderful about themselves.  And if they can’t, they’ll blame it all on the mean old Repubicans who want you to be able to keep your job or something radical like that.

~McQ

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18 Responses to Unemployment the people’s main priority? So let’s hike the minimum wage …

  • Of course, without indexing the tax tables for the low end of incomes, these folks are more likely to pay additional taxes, so you know who wins here.

  • When you artificially raise the cost of anything…especially anything essential to an entire economy like a unit of labor…you also lower the value of money.
    You inflate the currency.  The economy simply adjusts around the artificial increase in cost (empirically).
    Nobody you SAY YOU INTEND to help is benefited by that.
    You also squeeze people who are directly paying minimum wage employees to apply the Law Of Substitution.  They will look to replace more expensive workers with anything that provides the same utility.

    • “They will look to replace more expensive workers with anything that provides the same utility.”
      Viola!  Undocumented Democrats!  Boehner is eager to help.

      • Well, not so much in reality.
        An employee…regardless of their immigration status…at a fast-food franchise is going to be paid the minimum wage.  In my experience as a contractor, NOBODY worked below the minimum wage.
        One substitute would be robotic burger flippers.

        • I haven’t worked in fast food, but suspect the many places here in San Diego county that offer Mexican food might have illegals. McDonald’s and such won’t, but independents are another matter. And I won’t pick on the mex food places either, except we have a bunch of those (many quite good), many are independent, and in almost all cases the workers are hispanic and speak Spanish.  

          A raise to the min wage would be a raise for those working under it as well. Maybe not directly, but the market forces will tend to drive under the table wages up.

          • Exactly!  That phenomenon is call “inflation”.
            If an hour of labor CAN’T buy you X amount of groceries when it used to, you are going to have to seek a wage for that hour that DOES.
            And everybody RATIONALLY WILL, all things being equal (or no other government distortions applied).

    • You inflate the currency.
      Isn’t that what the Federal Reserve has been trying to do with trillions of faux dollars, by buying up most of the T-bills (after a delay) from the Treasury auction ?

      • Well, it COULD be argued they were not TRYING to do that, but that it was incidental to their policy.
        It COULD also be argued that everything the Obami have done is Cloward-Piven bound (though it could be pointed out the Fed is not the Obami, proper).
        Still…

        • Oh I think after five years of rampant ass-hattery we can assume that he’s not an ass-hat by accident.
          Not even a fool could do that much damage unintentionally, and would occasionally would do a good thing, if only by accident.

          • The law of averages tells us an elephant with a dart-board could do much better.
            SO….

    • I suppose inflation would be part of it, but it will also involve much more pressure on small buisness. That pressure on small buisness will result in some mix of fewer jobs, small buisnesses going under, or small buisnesses using under the table labor.

      That said, I say, “do it!”. Raise the fu*king min wage already. Let’s get this party started. Hell, raise it to at least $50/hr.

  • The Democrats are not pushing this because of their emotions. They are pushing it to win politically.

    Due to Obamacare the Dems are in a difficult spot for 2014. They need to change the subject to something that helps them. Minimum wage is popular, even among Republicans, and it is more popular among independents and Democrats. The fact that it is economic stupidity is besides the point, this is about winning elections . . .

    Many unions index their pay based upon minimum wage, so this will be a big hike for unions, who will contribute some of that back to the Dems. Those laid off will blame their boss/company, not Obama and the Dems. this will fire up the leftist base. And help keep unemplyed youth, particularly blacks, firmly on the left.

    Dems don’t care about poor people, except to exploit their vote. It is exactly the same with respect to immigration “reform”, win-win-win for Dem politicians even as it keeps those they claim to want to help at the economic margins.

  • “The beatings will continue until morale improves.”
    That is the basic message of all central planners.

  • Everyone that keeps a job will credit Democrats for more income.  Everyone that loses a job will look to Democrats to extend/enhance unemployment benefits.  Win-Win.