In their war against jobs, President Barack Obama and the Democrats are raising the minimum wage, knowing it will cost beginners their jobs. Why? Using Orwellian doublespeak, Democrats hope it will be a winning campaign issue and divert attention from the mess they have made of health care and the economy.
Obama’s executive order increasing the minimum wage on new federal contracts affects a mere 16,000 workers (less than 1 percent of all hourly workers). It is unclear if it includes presently unpaid congressional interns. The Senate version, according to the non-partisan Congressional Budget Office will eliminate up to 1 million jobs, but help 16 million other workers, 29 percent of whom earn more than three times the poverty threshold.
Democrats are counting on a misinformed and ignorant electorate, the 25 percent who don’t know the Earth revolves around the sun, the 29 percent who don’t know the name of the vice president, and the 999 of a 1,000 who can’t name the First Amendment’s five freedoms.
Only 1.4 percent of wage earners in California receive the minimum “learning” wage, less than 1 percent of full-time workers and only 1.7 percent of full-time workers nationwide. Also, most people don’t know the majority of minimum wage earners receive a pay increase within one year of starting a job, according to the Bureau of Labor Statistics.
So why the all-out effort to raise the minimum wage? Because nearly every hourly worker ratcheted above the minimum wage (about 72 million workers) expects to get a pay increase whenever the minimum wage goes up (it is a requirement in many union labor contracts).
Union voters and campaign contributors are the Democrats’ target audience. The majority of workers who are non-unionized earning the minimum wage today are the sacrificial lambs — those seeking a first time “learning” wage job (27 percent of unemployed teenagers) and minority teenagers (50 percent unemployed), are the people who suffer the most from “good intentions.”
The very rare fraction of married adults with children who earn the minimum wage after one-year are entitled to an Earned Income Tax Credit up to $6,044 to bring them above the poverty level. There seems to be a correlation between unemployed teenagers and petty crimes committed by teenagers needing money, which is another downside. Ultimately, the minimum wage issue is a political sham for the sole purpose of generating votes and campaign contributions, when you look at the involvement of union members who mostly earn far more than the minimum wage.
An analysis by the Sunlight Foundation, a nonprofit that tracks political spending, of groups and individuals who wrote checks of more than $10,000 to super PACs and other political committees found big labor outspent big business by a margin of more than 2-to-1 during 2013. Why do you suppose that is?
Most of the time since 1974, when the minimum wage went up, unemployment went up. There are many conflicting studies on the effect of increases in the minimum wage, so you have to look to your personal experience to get to the truth.
What do you imagine would happen to “learning” wage jobs if the minimum wage was set at $35 an hour, as some New York labor unions are demanding? Their members, of course, getting $35 an hour would add the 27.75 increase over $7.25 to their $35 to get paid $62.75 an hour. Now there is real motivation to picket fast-food restaurants to raise wages.
Based on your own spending, do you generally spend more or less on something when the price goes up, such as food, clothing, shoes, homes, rent and so on? Is spending different when it comes to beginner wages? Why do you think millions of jobs for elevators operators, movie theater ushers, gas station attendants, newspaper boys, teenager lawn cutters, babysitters and doormen have disappeared? Formerly, millions of low-paying beginner jobs but nonetheless, honest starter jobs.
What about the income inequality argument? While it’s true mathematically that the gap between the highest income category as a group and the lowest group is increasing, individuals tell a different story. Only by conflating separate sets of facts does the gap between rich and poor appear to be increasing.
In his book, “The Thomas Sowell Reader,” Sowell, citing the IRS, points out the real incomes of those in the bottom quintile in 1996 rose 91 percent by 2005, while those in the top quintile rose by only 10 percent during the same period. “And the incomes of those in the very top 5 percent and top 1 percent actually declined.” Sowell writes that real flesh-and-blood human beings move from one statistical category to another over time, emphasizing that individuals should not be confused with categories or quintiles.
About half of all workers receiving the minimum wage are 16 to 24 years old, and of course they cannot remain in the 16-to-24 age category forever. As one cohort moves up in income, another cohort of young people takes its place, ensuring that as long as one definition of poor is the bottom 10 or 20 percent, the “the poor will always be with us,” Sowell wrote. If you want to create more jobs, the minimum wage should be abolished.
Schnaubelt, president of Citizens for Private Property Rights, has been a commercial real estate broker for 45 years and was a San Diego city councilman from 1977 to 1981.