Skip to comments.Obama’s Minimum Wage Push: ‘Fairy-Tale Economics’
Posted on 03/12/2014 4:14:20 PM PDT by mcf1
Make Jobs, Not Propaganda
President Obamas 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.
Its time to give America a raise, Obama said. Its not bad business to do right by your workers; its 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 Obamas 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 nations poor. The White House defiantly said the CBO estimate contradicted the consensus of most economists, but the pushback didnt 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 couldnt 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 wont 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 administrations push back against the CBO estimate fairy-tale economics that defies the facts. To underline the point, Samuelson reiterated the CBOs 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 dont have jobs and many low-income workers are part-time (47 percent).
●Higher incomes would lift about 900,000 people above the governments poverty line in 2016 ($24,100 for a family of four). Thats 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 administrations minimum-wage campaign wont help. The administration, he says, needs a new spirit: Make jobs, not propaganda.
Is this from the President who is still underpaying his female staff members?
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.
So what, people STILL won’t be able to afford Obamacare.