Posted on 02/18/2013 10:08:10 AM PST by Kaslin
Of course President Obama does not hate poor people, nor does the most avid tea partier. Few (if any) policies are intended to harm the poor; in fact, most policies are intended help the poor. Unfortunately, good intentions do not always equal good results; such is the case with minimum wage.
Obama claims simply raising the federal minimum wage to $9 per hour “could mean the difference between groceries or the food bank, rent or eviction, scraping by or finally getting ahead.”
It’s not that simple, though.
“In the real world, setting a floor under the price of labor creates winners and losers,” the Wall Street Journal points outs. While “some workers will get a $1.75 raise” “others -- typically the least educated and skilled -- will be priced out of the job market and their pay won't rise to $9.” Going from $7.25 per hour to $0 isn’t going to get anyone ahead.
In an effort to avoid the unavoidable truth that minimum wage hurts low-skilled workers, theWashington Post’s Wonkblog explained “there are a variety of ways that labor markets can respond — and they don’t all involve more unemployment.”
Wonkblog explains employers could “respond by cutting back on benefits or hours or training.” For those living below the poverty line, those sort of cuts would not be welcomed, and a decrease in training will mean less opportunity for a low-skilled employee to advance, all but ensuring the cycle of poverty continues.
Of course, the minimum wage hike would not take effect in isolation. If implemented, it would occur side-by-side with the ongoing implementation of Obamacare. As Heritage and many others have pointed out, the poor will be hardest hit by the Obamacare taxes and the ripple effect caused by the regulatory burden.
One of the destructive side effects of Obamacare is the costly employer mandate. Employers now have an incentive to give workers just 29 hours per week to avoid triggering the law’s definition of a “full-time” employee. Once a worker becomes “full-time,” the employer must provide the worker with costly health insurance or pay a hefty fine to the federal government.
As National Review’s Andrew Stiles explained, a minimum-wage employee working 40 hours a week could see their weekly wage increase by $70 per week under the President’s proposal. However, if employers cut hours to avoid Obamacare, as some have already announced, that same employee, even with the mandatory wage increase would lose $29 per week.
Wonkblog was not done, though.
Employers could respond to Washington’s wage dictate by “cutting wages for other, higher-paid workers,” essentially transferring money from a $12 per hour worker to a $9 per hour worker. Wonkblog notes there are “plenty of theoretical papers” suggesting “people might work harder and be more productive if they’re suddenly paid more.” Of course, for those workers who were making $12 per hour, effectively $24,000 per year, the incentive may be just the opposite when they are held back for the purposes of pay parity.
Of course, companies could “raise their prices in response” or “just settle for fewer profits.” An increase in consumer services and products is not good for America’s struggling middle class, let alone the working poor. And the idea that increased costs won’t be passed along to the consumer is simply a pipe dream, and something Wonkblog acknowledges is “pretty inconclusive.”
Finally, there is the theory a mandated wage increase is actually good for the employer. Wonkblog explains businesses could “react by trying to squeeze more productivity out” of their minimum-wage employees. (Insert union joke about evil corporations exploiting low-skilled workers here.) But the employer benefits do not stop there. Companies, Wonkblog argues, “might actually save money” because there would be less turnover among entry-level employees.
As the Wall Street Journal editorial board exclaimed, “No doubt employers are slamming their foreheads wondering why they didn't think of that.”
That same editorial notes University of California at Irvine economist David Neumark found 85% of major academic studies focused on the minimum wage "find a negative employment effect on low-skilled workers."
If you’re a low-skilled worker, be on the lookout for a fancy sounding bill to be introduced in Congress, something like the Eliminating Poverty in America Act. If history is any guide, the EPA Act will do you more harm than good.
Wrong question...its not about poor or rich. No matter what your class, standing etc if you get in his way too bad for you. Its all about Barry all the time.
Case in point. Albuquerque just raised the minimum wage. Here is an article from KOB on how one restaurant is coping with the additional wage problem.
http://www.kob.com/article/stories/S2935132.shtml?cat=500
Welcome to the real world people.
hey! I am all for makign it $15 an hour
As long as they are going to do it, lets see its true effect.
My mortgage payment should stay the same but my income should double, too, as massicve inflation hits.
BUY PROPERTY
Well at least he isn’t a racist. He just hates poor people in general.
Democrats all love the poor.
That’s why they spend so much of their time and our money making so many of them.
Knowing that I am “preaching to the choir” here at FR, what is it that 0bama and liberals do not understand about economics?
If the raise the minimum wage, then the costs to the consumers go up. We consumers do not have an endless supply of money. If the cost of a meal at McDonalds (for example) goes from $6 to $8 so they can cover the increase in minimum wage, then I am going to go to McDonald’s LESS. And they will need FEWER employees. So that will put MORE on welfare benefits, unemployment, etc.
Why is this impossible for liberals to understand?
Because they never outgrew the magical thinking of their childhood - they still think wanting an outcome badly enough will make it so (kinda like some conservatives with the War on Drugs).
Obama is a sociopath who loves only himself. He is incapable of normal feelings. He neither loves or hates the poor...he regards them as a tool, a hammer say, to be used to achieve his goal of bringing down the successful.
$9 an hour works out to about $18,000 a year. That would lock families into food stamps, free school lunch, housing help and Medicaid. How is that helping anyone?
Actually, yes, he does hate the poor, if they are born American. He hates all Americans. Not being one of us, he mostly despises all things American.
I don’t think that he hates all Americans. Just certain races and religions of those who are Americans.
I should have said, just those Americans who are of certain races and belong to certain religions.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.