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Obama’s Minimum Wage Push: ‘Fairy-Tale Economics’
Western Free Press ^ | March 12, 2014 | John Walker

Posted on 03/12/2014 4:14:20 PM PDT by mcf1

“Make Jobs, Not Propaganda”

President Obama’s income inequality campaign – the centerpiece of his effort to save vulnerable Democrats from the Obamacare disaster – is fast losing steam in the face of raw facts and political reality.

The President wandered up to Connecticut the other day to sing the praises of a minimum wage increase with friendly Democratic governors who have moved to raise the minimum wage in their states. His refrain was familiar.

“It’s time to give America a raise,” Obama said. “It’s not bad business to do right by your workers; it’s good business.” As usual, the president chose an audience of enthusiastic college students, the very group that all too soon will learn the dire consequences of Obama’s failed economic policies.

Only recently, the Obama minimum-wage campaign ran smack into the facts presented by the Congressional Budget Office (CBO) that said a wage hike would cost about 500,000 jobs and would have a minimal impact on the nation’s poor. The White House defiantly said the CBO estimate contradicted the “consensus” of most economists, but the pushback didn’t sell.

Then came the political reality. Senate Majority Leader Harry Reid was itching for a vote in the Senate to breathe life into the wage boost issue. That failed as well. Reid couldn’t get enough of his Democratic caucus to stand up and be counted. In tough economic times, Democratic senators fighting for their political lives were not about to vote for another job killing proposal.

Panicky about turning out the true believers in the Democratic base in November, Obama won’t let go of the issue. He knows that his base loves populist rhetoric and every effort he makes to demonize the opposition.

Writing in the Washington Post, the highly respected columnist Robert Samuelson calls the Obama administration’s push back against the CBO estimate “fairy-tale economics” that defies the facts. To underline the point, Samuelson reiterated the CBO’s main conclusions:

● The higher minimum wage would reduce jobs by about 500,000, or 0.3 percent of projected 2016 employment. The CBO admits that its estimates involve much uncertainty. Job loss, it says, might be as high as 1 million or as low as almost nothing. The half-million figure is its best judgment.

● Up to 25 million workers would receive wage increases, about 16.5 million below the proposed minimum and possibly 8 million more just above it. Wage increases would raise the incomes of families in poverty by about 3 percent, or $300 annually. The effect is muted because most people in poverty don’t have jobs and many low-income workers are part-time (47 percent).

●Higher incomes would lift about 900,000 people above the government’s poverty line in 2016 ($24,100 for a family of four). That’s about 2 percent of the projected 45 million poor. The small impact also reflects the fact that many low-income workers, presumably young, come from middle-class families, including 33 percent from families with incomes exceeding three times the poverty line.

Samuelson goes on to say that an increase in the minimum wage is more compelling as politics than as social policy.

“The best way to help low-income workers would be to expand the Earned Income Tax Credit (EITC), which is a wage subsidy. This would eliminate hiring disincentives and focus benefits on the poorest workers.”

But, Samuelson adds, the EITC lacks the “political charms” of the minimum wage.

“The minimum wage is liberals’ symbol for showing how much they care for the poor — and how much they despise inequality — while demonstrating conservatives’ callousness. Congress gets to dispense pay increases to millions of workers, using private dollars. By contrast, expanding the EITC would require scarce on-budget dollars.

Samuelson grants that weak labor markets reflect the hangover from the recession, but the administration’s minimum-wage campaign won’t help. The administration, he says, needs a new spirit: “Make jobs, not propaganda.”

TOPICS: Constitution/Conservatism; News/Current Events; Politics/Elections
KEYWORDS: incomeinequality; minimumwage; obama

1 posted on 03/12/2014 4:14:20 PM PDT by mcf1
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To: mcf1

Is this from the President who is still underpaying his female staff members?

2 posted on 03/12/2014 4:18:07 PM PDT by Don Corleone ("Oil the the cannoli. Take it to the Mattress.")
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To: mcf1

Spreading the wealth around fail part 1.5

By the time this marxist is done with his term the country will be totally transformed for the worst.

3 posted on 03/12/2014 4:23:42 PM PDT by RginTN
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To: mcf1

So what, people STILL won’t be able to afford Obamacare.

4 posted on 03/12/2014 4:33:26 PM PDT by Blood of Tyrants (Haven't you lost enough freedoms? Support an end to the WOD now.)
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