“I’m hearing from a lot of customers, ‘I voted for that, and I didn’t realize it would affect you.’” (IJ-Review)
Powerline has a great short article about minimum-wage laws pushed by Democrats bumping into the steel reinforced wall of reality:
Via InstaPundit, a lesson in economics for liberals. This time, it’s the minimum wage:
San Francisco’s Proposition J, which 77 percent of voters approved in November, will raise the minimum wage in the city to $15 by 2018. As of today, May 1, [Brian] Hibbs is required by law to pay his employees at Comix Experience, and its sister store, Comix Experience Outpost on Ocean Avenue, $12.25 per hour. That’s just the first of four incremental raises that threaten to put hundreds of such shops out of business. …
Hibbs says that the $15-an-hour minimum wage will require a staggering $80,000 in extra revenue annually. “I was appalled!” he says. “My jaw dropped. Eighty-thousand a year! I didn’t know that. I thought we were talking a small amount of money, something I could absorb.” He runs a tight operation already, he says. Comix Experience is open ten hours a day, seven days a week, with usually just one employee at each store at a time. It’s not viable to cut hours, he says, because his slowest hours are in the middle of the day. And he can’t raise prices, because comic books and graphic novels have their retail prices printed on the cover.
If he can’t stay in business, all of his employees will lose their jobs.
“Why,” he asks, “can’t two consenting people make arrangements for less than x dollars per hour?”
Exactly. Conservatives should oppose minimum wage laws on fairness grounds. If a person is willing to work for, say, $8 an hour, how dare liberals tell him he must remain unemployed instead? There are many, many people whose best offer of employment will be for less than the $15 an hour that San Francisco will soon mandate. Liberals are, in effect, making it illegal for these people to work, even though they are ready, willing and able to do so.
Minimum wage jobs are overwhelmingly entry level employment. They provide valuable training, experience and opportunity for advancement. Making it illegal for young people, especially, to seek employment at the wage they can command isn’t just economically stupid, it is deeply unfair.
As the #FightFor15 movement get fast food workers to strike in order to get a $15, and they watch businesses in Seattle closing because of the forced raise in wages. Automated cashier options are now an option to be weighed. Of course a business wants a human face to represent it. But the business wants to stay in business, so many are being forced to choose a cheaper, more sustainable option for its budget.
Would you like some microchips with that burger? McDonald’s Europe strikes another blow against human interaction by installing 7,000 touch-screen computers to take your order and money.
McDonalds recently went on a hiring binge in the U.S., adding 62,000 employees to its roster. The hiring picture doesn’t look quite so rosy for Europe, where the fast food chain is drafting 7,000 touch-screen kiosks to handle cashiering duties.
And this real world affect of what politicians can merely raise taxes to meet budgets with (or, on the Federal level just print more money [a dumb move BTW]) is that small business go out of business, thus affecting the poor who want jobs.
But now the option through technology is to replace workers for businesses altogether:
(Washington Policy Center) Everyone is predicting what the real world impact of Seattle’s newly passed $15 minimum wage will be. The truth is there will not be a mass exodus of businesses from the city, nor will the economy crash.
But many businesses will simply figure out how to employ fewer low-wage workers. They will do that by substituting machines and technology for people.
Service industry CEOs have cautioned a higher minimum wage is “encouraging automation,” which can improve efficiency. Even Microsoft co-founder Bill Gates warns that a higher minimum wage would “encourage labor substitution” and incentivize employers to “buy machines and automate things” and ultimately “cause job destruction.”
He’s right. When government increases the cost of labor, employers find other ways to save money.
Just look at how McDonald’s has responded to France’s $12 an hour minimum wage. In 2011, McDonald’s invested in 7,000 touch screen computers in France to reduce the number of workers needed. Restaurants around the country are already exploring automation as a means to cut costs; Applebee’s is installing 100,000 tabletop tablets for ordering and payments.
Many food businesses are considering a machine that can freshly grind, shape and custom grill 360 gourmet burgers per hour, no human labor needed. Alpha, the burger-making robot, can even slice and dice the pickles and tomatoes, put them on the burger, add condiments and wrap it up. The manufacturer makes the point that cashiers or servers aren’t even needed: “Customers could just punch in their order, pay, and wait at a dispensing window.” The maker says Alpha will pay for itself in a year.
The Guarding confirms the statement of Michele Bachmann (implicitly) in the emboldened portion — GM is pulling out of Australia… Toyota probably following. Minimum wage increases adding pressures to business:
…GM Holden will cease producing cars in Australia from 2017, putting 2,900 employees out of work and Australia’s remaining car and components industry and its 45,000 workers in immediate danger.
“The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world,” GM Holden’s chairman, Dan Akerson, said.
In a statement from Detroit, Holden said “approximately 2,900 positions will be impacted over the next four years. This will comprise 1,600 from the Elizabeth vehicle manufacturing plant [in South Australia] and approximately 1,300 from Holden’s Victorian workforce…
(As usual, you can click the article to enlarge) I do not have the time to delve into John’s latest like I would want, but simply, I wish to respond to three ideas in the article. For instance, John said:
Should the government never get involved in private enterprise or should it create a fair playing field for all participants? Most of the time, the latter is already the case.
Firstly, “never,” is setting up a false dichotomy, a straw-man. He is using an extreme to set up his case. secondly, this is the divide between progressives and conservatives that Dennis Prager zeroes in on so well — Prosperity or Egalitarianism:
Johns second statement is this one, and I will again zero in on some California examples (where John lives) so the reader can understand what government involvement means. John says
When I buy a product from a hardware store, I am satisfied, the owner is satisfied, the government gets its share and the employees get to keep their jobs. There are many win-wins. Why do some people perceive the government as a friend, others as an enemy?
Here is the answer with a great example from a few years back, right down the road a bit from both John and I… it comes from an article I have saved from the June 26, 2002 Daily News, Editorial Section, entitled “Killing Jobs”:
Billingsley’s Restaurant at the Van Nuys Golf Course may soon fall victim to the economic illiteracy of the Los Angeles City Council [almost all liberals by the by].
Five years ago, the council pandered to organized labor by passing a measure requiring all businesses that contract with the city to pay their employees a “living wage,” an hourly salary tied to the Consumer Price Index that tends to run about three dollars more than the California minimum wage.
The measure, intended to bolster economic status of the city’s working families, was a classic example of arrogant politicians thinking they could magically legislate wealth into existence.
But grandiose schemes have consequences. Extra money for salaries has to come from somewhere. Usually from customers, workers or taxpayers who end up paying the bill.
Billingsley’s is a case in point of what’s wrong with this scheme [which Santa Monica has made policy].
Because the restaurant’s lease on the city-owned golf course is up for renewal, it will soon have to start paying the living wage, which owner Drew Billingsley says will cost him $100,00 a year [keep in mind this is not only in wages, but the time and money spent on the mountains of new paperwork to make sure he is following this new regulation]. In an effort to meet that expense, he has laid off as many employees as possible, but its not enough.
Thus Billingsley now has two choices: Either he can raise prices and alienate his loyale clientele (which consists largely of retirees on fixed incomes), or he can close up shop altogether.
Either way, the community will suffer. That’s what happens when feel-good posturing, not sound policy, governs lawmaking.
City Hall has done its best to chase away well-paying jobs, and public schools have done their worst at educating people so they aren’t qualified for well-paying jobs. Artificial living wages won’t solve real people’s problems.
Loss of jobs and customer dissatisfaction are the result of government interference. Here are more examples noted by Dennis Prager:
And any person should acknowledge why someone should “fear” government more than business. In fact, I made this point on my FB outgrowth of this blog in talking to my liberal friend:
…you see, when the government chooses winners-and-losers instead of getting contracts with private companies (like Ford, GM, etc.), they are invested to [i.e., forced to] only choose a government run business and stock their fish (so-to-speak) with GM fleets… leaving the non-government company to flounder.
This next audio (below/left) deals with the differences of the Koch brothers, in comparison to the Left’s version of them, Soros. There are many areas that one can discuss about the two… but let us focus in on the main/foundational difference. One wants a large government that is able to legislate more than just what kind of light-bulbs one can use in the privacy of their own home. Soros wants large government able to control a large portion of the economy (see link to chart below), and he has been very vocal on this goal. The other party always mentioned are the Koch brothers. These rich conservatives want a weak government. A government that cannot effect our daily lives nearly as much (personal, business, etc) as the Soros enterprise wants. And really, if you think about it, what business can really “harm” you, when people come to my door with pistols on their hip… are they a) more likely to be from GM, or, b) from the IRS?
The possibility of them being from the IRS is even more possible with the passing of Obama-Care [i.e., larger government]. So the “fear” (audio in next comment) I think the Left has of “Big-Business” is unfounded, and the problem comes when big-business gets in bed with big-government. Here I am thinking of (like with the penalties that were found to be Constitutional in the recent SCOTUS decision) a government that can penalize you if you do not buy a Chevy Volt, or some other green car in order to save the planet. When this happens, guys coming to my door because of unpaid (hypothetical… but historical examples abound of the tax history of our nation) “fines” are likely to be IRS agents because of a personal choice made in the “free-market.”
Appendix: If the above example didn’t inspire any liberal fear (forced to go green or be penalized), maybe this one will
…First, the government needs to issue a mandate that all households must own at least one firearm. We will need a federal agency to ensure that people aren’t just buying cheap BB guns or .22 pistols, even though that may be all they need or want. It has to be 9mm or above, with .44 magnums getting a one-time tax credit on their own. Let’s pick an agency known for its aptitude on firearms and home protection to issue required annual certifications each year, without which the government will have to levy hefty fines. Which agency would do the best job? Hmmmm … I know! How about TSA? With their track record of excellence, we should have no problems implementing this mandate.
Don’t want to own a gun? Hey, no worries. Supreme Court Chief Justice John Roberts says citizens have the right to refuse to comply with mandates. The government will just seize some of your cash in fines, that’s all. Isn’t choice great? Those fines will go toward federal credits that will fund firearm purchases for the less well off, so that they can protect their homes as adequately as those who can afford guns on their own. Since they generally live in neighborhoods where police response is appreciably worse than their higher-earning fellow Americans, they need them more anyway. Besides — gun ownership is actually mentioned in the Constitution, unlike health care, which isn’t. Obviously, that means that the federal government should be funding gun ownership….
This is why people fear government, to answer John’s question. Thirdly, John tackles charity versus government mandated “charity.”
Why should charity be a virtue for a person, but a sin or fault for a government? Why is it a virtue for every church, but “socialism” for a government? You might say in one situation it is voluntary; in the other, it is mandated by law. You would be right, but ask people if they can do without their mandated Social Security or without their mandated Medicare. My guess is that most would be in deep poverty.
Here are some analogies to make the point and then some comparison of the effectiveness of such ideas.
A great analogy that explains the dilemma of our “redistribution program” here in America (welfare, food stamps, or Medicaid, etc.) is one of a triplex. I must thank Neal Boortz for this analogy (his book, The Terrible Truth About Liberals), by the by.
Our government, as our Constitution says, derives its powers “from the consent of the governed.”The idea here is that we cannot and should not ask the government to do anything for us that we cannot legally or morally do for ourselves. Sounds logical, doesn’t it? With that premise in mind, lets build the following scenario.
You live in a triplex. You are in apartment No. 1, Johnson is in apartment No. 2, and Wilson lives in No. 3. You discover that Wilson is ill and cannot work. He never bothered to buy a health insurance policy because he just didn’t believe he would need it for quite some time. Wilson, it seems, is not good at making rational decisions. He has no savings because it was more important to use that money for bondo on his Camaro and a good Panama City Beach vacation every summer.
You believe that Wilson is about to starve to death. His electricity is going to be cut off, and he can’t afford to buy his blood pressure medication. You decide to help, charitable soul that you are. You scrounge through your bank account and find $200 to help your neighbor out.
Good for you. What a guy!
A month later Wilson is still in trouble. Your $200 wasn’t enough. It turns out that he spent $20 for a case of beer and at least another $100 or so at the horse races. Things may not be all that desperate, though. One of the thirty-five Lotto tickets he bought with that carton of cigarettes might pan out.
You decide to visit Johnson in apartment No. 2 to see if he can chip in. Johnson tells you that, while he certainly understands the seriousness of Wilson’s situation, he needs his money to send his daughter to college in the fall and to pay some of his own medical bills. Besides, he’s trying to save up some cash for a down payment on a house so he can get out of this weird apartment building.
You make the determination that it is far more important for Wilson to have some of Johnson’s money than it is for Johnson to keep it and spend it on his own daughter’s education and a new home. So, here’s the question:
“Do you have the right to pull out a gun and point it right at the middle of Johnson’s forehead? Can you use that gun to compel Johnson to hand over a few hundred dollars for Wilson’s care, and then tell Johnson that you’ll be back for more next month?”
Obviously, when put like this, you won’t run into too many people who will tell you that they have the right to take Johnson’s money by force and give it to Wilson. They might say that they would try to talk Johnson into being a bit more charitable, but they don’t think that they have the right to just rob him at gunpoint. But this is the next question:
“Well, if our government derives its powers from the consent of the governed, how can you ask your government to do something for you that, if you did it for yourself, would be a crime? Why would it not be OK for you to take that money from Johnson by force and give it to Wilson, but it would be perfectly OK with you if the government went ahead and did it?”
Another aspect of this is exemplified in how well private business/charities/churches can do what government cannot. In regards to Social Security, the CATO Instituteexplains a bit about the Chilean model that would work well here in the Stetes:
…Chile allowed every worker to choose whether to stay in the state-run, pay-as-you-go social security system or to put the whole payroll tax into an individual retirement account. For the first time in history we have allowed the common worker to benefit from one of the most powerful forces on earth: compound interest.
Some 93% of Chilean workers chose the new system. They trust the private sector and prefer market risk to political risk. If you invest money in the market, it could go up or down. Over a 40-year period, though, a diversified portfolio will have very low risk and provide a positive rate of real return. But when the government runs the pension system, it can slash benefits at any time.
The Chilean system is run completely by private companies. We now have 15 mutual funds competing for workers’ savings.
We guaranteed benefits for the elderly — we told those people who had already retired that they had nothing to fear from this reform. We also told people entering the labor force for the first time that they had to go to the new system.
Today, all workers in Chile are capitalists, because their money is invested in the stock market. And they also understand that if government tomorrow were to create the conditions for inflation, they would be damaged because some of the money is also invested in bonds — around 60%. So the whole working population of Chile has a vested interest in sound economic policies and a pro-market, pro-private-enterprise environment.
There have been enormous external benefits: the savings rate of Chile was 10% of gross national product traditionally. It has gone up to 27% of GNP. The payroll tax in Chile is zero. Of course we have an estate tax and an income tax, but not a payroll tax. With full employment and a 27% savings rate, the rate of growth of the Chilean economy has doubled….
The bottom line: Government spends about 70% of tax dollars to get 30% of tax dollars to the needy. The private sector does the opposite, spending about 30% or less to get 70% of aid to the needy.
Again, the savings rate in Chile went up from 10% to 27% of GNP. There’s no payroll tax, and with full employment and that great savings rate, the economy has blossomed. Here is the second portion I think is important, that is, private interests redistribute a higher percentage per dollar. I will end with this great question/answer post:
About ten years ago you wrote: “When help is given privately, approximately 80% of each charitable dollar gets to a worthy recipient. Only 20% of each tax welfare dollar reaches the poor.”
This is a very powerful argument for why government should leave issues of the poor and disabled to non-profits and people who care. In fact, those numbers make it sound almost cruel to support government welfare programs. What’s your source for this estimate?
I am currently using a slightly more conservative figure, though it still makes the same point. I would now, if asked, say: “When help is given privately, 70% or more of each charitable dollar gets to a worthy recipient. But only about 30% of each tax welfare dollar reaches the needy.”
On pages one and two, Edwards cites two studies, over a seven-year period, backing up that figure. He writes:
“[Government] income redistribution agencies are estimated to absorb about two-thirds of each dollar budgeted to them in overhead costs, and in some cases as much as three-quarters of each dollar. Using government data, Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents of each dollar budgeted for government assistance goes not to the poor, but to the members of the welfare bureaucracy and others serving the poor. Michael Tanner (1996, p. 136 n. 18) cites regional studies supporting this 70/30 split.
“In contrast, administrative and other operating costs in private charities absorb, on average, only one-third or less of each dollar donated, leaving the other two-thirds (or more) to be delivered to recipients. Charity Navigator, the newest of several private sector organizations that rate charities by various criteria and supply that information to the public on their web sites, found that, as of 2004, 70 percent of charities they rated spent at least 75 percent of their budgets on the programs and services they exist to provide, and 90 percent spent at least 65 percent. The median administrative expense among all charities in their sample was only 10.3 percent.”
Later on he adds: “In fact, the average cost of private charity generally is almost certainly lower than the one-quarter to one-third estimated by Charity Navigator and other private sector charity rating services…” and tells why.
The bottom line: Government spends about 70% of tax dollars to get 30% of tax dollars to the needy.The private sector does the opposite, spending about 30% or less to get 70% of aid to the needy.
There is much more of interest in that article, including this important observation:
“[R]aising only half as much money through voluntary donations, the private agencies (and families) could deliver the same amount as the government, saving, in the process, all the costs the government imposes on the public through the compulsory taxation. Given that aiding the poor must have large support among the public for coercive government redistribution to be policy, couldn’t the supporters raise, through voluntary donations from among themselves, half the amount that would have to be raised through taxation, and avoid coercing the rest of the nonpoor public?”
That’s the promise the libertarian vision offers: more effective aid for the poor and needy than ever before, delivered voluntarily by the private sector at a far smaller cost than today’s welfare state.
I laugh sometimes at myself… because I started out the post with, “I do not have the time to delve into John’s latest like I would want.” I ended up giving a pretty thorough refutation as if I had time.
The establishment press will never tell their readers, listeners and viewers that the five best-performing states in job growth through the first eleven months of this year, as well as nine of the top eleven, have relatively conservative Republicans occupying their respective governors’ mansions. If these eleven star performers had only performed as well as the rest of the nation, over 300,000 fewer people would be working, and the unemployment rate would be at least 0.2% higher.
As will be seen after the jump, the list, based on date released today by Uncle Sam’s Bureau of Labor Statistics, includes several against which the Obama administration has undertaken significant job-killing or job-deferring actions (i.e., these states have outperformed despite the handicaps, and would have done much better without them):
I wanted to say something about Rachel Maddow’s “debunking” of Texas jobs,
and that is that she skews her stats on this a bit. Firstly however, minimum wage laws (which play a part in this waxing of the numbers) play a big roll in keeping people unemployed. This isn’t my main point however, here are some points made elswhere:
But there’s no escaping it. The number is real. Which means that if you care about putting people back to work at a time when nearly 14 million in this country are unemployed, maybe Texas has something to teach us.
Unfortunately, that’s not the posture many commentators have taken. Instead, when the data from Texas emerged — touted first by Richard Fisher, president of the Federal Reserve Bank of Dallas — conservatives were quick to celebrate, embracing the jobs tally as powerful evidence of the superiority of Republican ideas as well as proof that Texas Gov. Rick Perry would make a good president. But that’s overly simplistic.
Meanwhile, those on the liberal end of the spectrum immediately set out to shoot the numbers down. MSNBC’s Rachel Maddow, for instance, held up a giant bologna and mocked the notion of a “Texas miracle.” That view, however, is too cavalier….
To be sure, Texas is not without lots of problems. And its remarkable employment growth is not without attendant concerns. But for those on the left to dismiss the state’s jobs story out of hand, just because Republicans have embraced it as a showpiece, is counterproductive and foolish.
While the LA Times article struggled a bit, but ended up shining at the end, the following is what Maddow and the LA Times writer didn’t fully account for:
In her column for The Daily, Reason Foundation’s Shikha Dalmia delves into Gov. Rick Perry’s record and writes that Texas “has one of the lightest personal tax burdens in the country and a low cost of living, which are hugely attractive to out-of-work Americans. Their flocking to the state has bumped up Texas’ unemployment rate to 8 percent, prompting Rachel Maddow to jeer on the air that Perry’s jobs record is not a whole lot better than many other states. What she refuses to see is that while in those states high unemployment is due to anemic job growth, in Texas it is due to robust population growth. If anything, Texas offers proof that people prefer jobs, even low-paying ones, to lavish social benefits — repudiating the liberal tax-and-spend economic model.
Just wanted to include a quick rebuttal to Madcow’s many, many mistakes.
“…In 1994, nearly two-thirds of U.S.-born teenagers were in the summer labor force; by 2007 it was less than half. At the same time, the overall number of immigrants (legal and illegal) holding a job doubled. The evidence indicates that immigration accounts for a significant share of the decline in teen labor force participation…”
I am a native-born New Mexico Hispanic. I often write letters to newspapers on a subject which those without an Hispanic last name dare not write: the urgent need for immigration reform.
This nation’s immigration policy, begun in 1965, is a disaster. It hurts minorities, the poor, the environment – as we see dramatically here in the West on an almost daily basis – and immigrants themselves.
Because of my last name, I can call for immigration reform, although I, too, have been labeled a racist – a hurtful claim that is impossible to disprove. As Ventura, Calif., Navy Dispatch editor Samuel Francis wrote in a recent editorial, – ‘Hate’ now includes all opposition to immigration.” Yet, immigration affects us all, and we should be able to talk about it without fear of character assassination.
This trend has its roots in the national news media, where reporters almost invariably report on immigration as being good and those opposed to immigration as being bad or racist. These stories remind us that we are a nation of immigrants, while ignoring that the incredibly high rates of immigration to the United States are largely a recent phenomenon.
From 1915 to 1965, legal immigration ran about 220,000 a year – the number most immigration reform advocates want us to return to, since that number would stabilize our population. Since 1989, legal immigration has averaged about 1,063,000 a year. Another 1 million people a year immigrate illegally, according to one estimate.
On a personal level, I am concerned about over-immigration because it hurts me and others in a state where the tide of immigrants out of Mexico is crushing native-born Hispanics, flooding already stressed schools, and sharply increasing drug trafficking and violent crime.
The rumored economic boom, despite many news reports to the contrary, has left Hispanics behind. The Federal Reserve recently reported that the median Hispanic net worth fell a whopping 24 percent between 1995 and 1998 due to “an accelerating influx of poor immigrants.” Put another way, when workers ask for a raise, they are often reminded that there are many others who will do the same work for less, including for below minimum wage. We all, native-born and immigrants, know there is no “labor shortage” for many of our jobs.
For that matter, do any American workers at any level see employers clamoring to increase their pay? No, they see industry calling for the right to import more cheap workers.
While I care about the world’s poor – roughly 1.5 billion people fall into that category – I believe we cannot possibly welcome all these mostly economic (rarely political) refugees to the United States. Do advocates of high immigration believe our own slums are empty and that we no longer have citizens needing a fair chance at decent-paying jobs?
We must return immigration to traditional levels. To stop the cross-border flow and the peril the trek brings to Mexican nationals, we must impose sharp penalties for those employers who hire illegal immigrants.
….Unfortunately, teens are also learning personal lessons about price theory and supply and demand. While America’s youth were busy downloading the latest iTunes, those running the country savaged their job prospects. In July 2009, a month distinguished by the then-highest unemployment rate among teens since at least 1948, the latest of three hikes in the minimum wage pushed through by Congress in 2007 went into effect. As a consequence, the cost to hire part-time or unskilled workers jumped to $7.25 per hour, a full 41 percent increase from the 2007 going rate of $5.15. Some considered the hike overdue; a decade had passed since the prior increase. Others argued that carrying through with such a hefty jump was ill conceived, especially in light of the recession. The bottom line: The sharp rise in the minimum wage has almost certainly contributed to an equally harsh increase in unemployment among those not yet old enough to vote.
Why? Because teens account for a disproportionate number of those paid bottom-of-the-barrel rates. In 2009, for example, teens made up 6 percent of all workers paid by the hour, but 23 percent of those paid at or below the minimum rate. Put another way, some 5 percent of the nation’s hourly workers received minimum wage or less; nearly 19 percent of teens fall into this category. At last count, nearly 26 percent of all teenagers were unemployed, up from 24 percent a year earlier. This is a decidedly worse showing than the rate for adult men, for instance. In June, unemployment for men totaled 9.9 percent, actually down slightly from 10 percent the year before.
That higher minimum wages could lead to lower employment isn’t a shocking concept.
Naturally, the recession caused millions of all ages to lose their jobs. However, the disproportionate hit taken by young people can also, according to a recent study, be laid directly at the door of the hike in minimum wage. Economists William Even of Miami University and David MacPherson of Trinity University compared teen job losses in states impacted by the minimum wage hikes with states that were not affected. (Some states had independently passed a minimum wage as high or higher than the national level, thus rendering the federal hike irrelevant.) They conclude that the increase in minimum wage raised teen unemployment by 114,000….
Now, the 40-year-old is rethinking her lifelong support for the party. She has been without steady work for two years, lost her home and car and began receiving cash assistance from the state for the first time. This year, she says, “I’m willing to take a chance on something different.” Another possibility, she says, is that she won’t vote at all.
Ms. Jones is part of an unmeasured, agitated mass: unemployed Americans who don’t believe the Obama Administration and Congress have done enough to produce jobs. With elections coming up, their unease is especially troublesome for the Democrats, who control both chambers.
A poor economy never bodes well for incumbents. Cook Report, the nonpartisan political newsletter that tracks congressional races, estimates that 73 House seats are vulnerable—including Mr. Schauer’s. This group has two things in common. Almost all (66 of 73) are held by Democrats, and most include counties that have unemployment rates exceeding the national average, according to data assembled by The Wall Street Journal.
The Center for Freedom and Prosperity offers another entry in its Econ 101 series, this time about the minimum wage and the destructive consequences of government intervention in the job market. When Democrats insisted on passing the latest series of minimum-wage increases from $5.15 to $7.25, they claimed to have the interests of the poor and young in mind. However, the action destroyed those jobs normally accessible to those populations, even before the current recession began eliminating them. When the minimum wage remained below the floor of the market for entry-level positions, it did no direct harm, but the intervention by Congress in 2005 wound up hurting the low-skilled workers they claimed to champion: