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December 05, 2013

With ObamaCare In Shambles, Liberals Have Decided To Pivot To...The Minimum Wage

After once again demonstrating their prowess on all matters economic with ObamaCare, liberals have turned their attention to another economy crippling idea...increasing the minimum wage.

Naturally all the usual suspects, Obama, the media, and professional liberal agitators are united for the push.

First, Obama had his big economic speech yesterday in which he called for hiking the minimum wage to address income inequality. Gotta spread it around, right?

This was tied to today's strike against fast food shops in selected cities across the country.

And then there's the lefty propaganda under the guise of non-partisan scholarship.

Whether or not most of those who work 40 hours a week at the minimum wage or near it and are supporting families believe that they are entitled to food and housing, the fact is that they are doing what we have long believed was fulfilling our basic social contract—work hard, be productive, and you and your family can live a decent life with a place to live, food on the table, clothes on your backs, and other necessities. In the past, Republicans thought that the market ought to set wages, and that a combination of government devices—including the earned-income tax credit, housing subsidies, food stamps, Medicaid, and other social-welfare programs—could fill in the gaps to make that social contract work, while also trying to remove disincentives from work via welfare reform. There is not only a continuing belief in some quarters that markets should set wages, but strenuous efforts to make deep cuts to food-stamp funding and slash other programs that help low-income workers—condemned as “takers.”

It is a fact that our economic system continues to have big gaps. The web of subsidies can create real disincentives for those at the bottom of the scale who want to work but would actually lose more benefits than their minimum-wage income would bring in. The effective marginal tax rate for a couple both making low wages if the second person works can be more than 100 percent because of benefit formulas. A couple of weeks ago, when I wrote about the war on food stamps, I mentioned a D.C. woman who is struggling to feed herself and her daughter, but calculated that she would need a job paying $15 an hour to do better. That is an artifact of poorly constructed, patchwork policies. Liberal cant notwithstanding, there is a culture of dependency that can discourage work among many. But the fact is most people out of work want to work—it defines their self-worth.

So because the liberal welfare state has become so (relatively) generous that the minimum wage would need to be nearly doubled for it to make economic sense for a person to get a job. It then of course falls to businesses to somehow find the money to pay workers more money, even though they are not providing any additional value for that increased wage.

Of course the money for that new higher wage will come from a combination of fewer workers or increased cost to consumers. Meanwhile the consumer and business owners who are expected to carry the increased wage burden will still have to pay the taxes to fund the welfare benefits that compete with wages in a never ending upward spiral.

And that's going to create economic growth?

According to Barack Obama, yes.

Do these people really believe this or are they just messing with us?

Of course no policy fight in the Age of Obama would be complete without liberal totalitarians wondering if King Barack I could just do this on his own without all the messiness of congressional involvement.

Well, progressives say, there's a whole group of low-wage workers that he can fix this for, just with the stroke of a pen. The chairmen of the Congressional Progressive Caucus, Reps. Raul Grijalva and Keith Ellison, wrote a letter that urges the president to circumvent Congress and sign an executive order to raise the minimum wage for workers employed through federal government contracts with private companies. This letter comes months after 49 members of the CPC requested the same thing from the president, only to hear radio silence about it from the White House.

"It's frustrating," says Ellison, who hand-delivered the letter to the president after his speech Wednesday. "We know his heart is in the right place and he wants to do something, and this is something he can do."

It's especially frustrating for Ellison and his caucus considering there is no chance such a measure could pass the Republican-held House and that Obama said months ago that he would use "whatever executive authority I have to help the middle class."

Unrelated prediction: Liberal love of robust unilateral executive action will end the second a Republican wins the White House again.

The minimum wage fight comes down to a fight between two camps..people who understand economics and the vast majority of Americans. You either understand that wages are a function of labor supply and demand as well as individual skills or you think pay rates are simply social constructs that can be raised or lowered devoid of any connections to real world conditions and consequences.

But hey, the same coalition that brought the wonders of their economic understanding of health insurance market to us through ObamaCare can be wrong, can they?

In crass political terms the fight to raise the minimum wage is simply about paying off Democratic constituent groups like the young, minority women and union workers with other people's money.

What's not to love about that? Unless of course you are the one being stuck with the bill or a worker who will either lose their job or fail to get one because reality will kick in no matter what liberals want to believe.


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posted by DrewM. at 11:11 AM

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