Thursday, January 30, 2014

Obama's Push To Raise Minimum Wage - Bogus

Socialist President Pinocchio Obama is out on the campaign trail, as usual, pushing to raise the minimum wage.  Playing to his PEEP's, the Liar Demagogue In Chief, claims that people working in low wage jobs should get $10.10 an hour, at a minimum.   Can we at least have an honest discussion concerning the minimum wage and who it helps, or hurts.  First, there should be a lower minimum wage for kids 18 and under, whatever it is; maybe $7 an hour so that teenagers can find and get part time jobs.  Kids from poor inner city families, in particular, need these jobs to supplement whatever family monies they may have.  So, hopefully, both Socialists and Republicans can agree that a lower minimum wage for kids 18 and under makes sense to prevent taking advantage of children. 

Next, raising the minimum wage to $10.10 will impact very few people in the United States anyway, since in most major cities, people must be paid more than what they might get on Welfare to entice them to work.   At this rate, someone working 40 hours a week, would earn $404 a week, depending on their family situation, about what they could get on Welfare and not including Food Stamps, so why work.   Earning just $21,008 annually is not going to bring anyone out of poverty; though it would qualify someone for the Earned Income Tax Credit, which could add another $6,000.   Even so, the combination of unlimited Welfare and Food Stamps could be more; so again why work.  This is the reason we have more than 47 million Americans on Welfare and Food Stamps, up 20 million since Obama liberalized eligibility.  So, this minimum wage issue is just red meat for Obama's PEEP's; but it is a bogus issue. 

But let's say the minimum wage is raised for adults to $10.10.  Obama just did it by Executive Order related to federal contracts.  Federal contracts are often bid on a cost plus a percentage basis.  Federal Contractors could care less.  They will just pass the additional cost on to the American taxpayers, so it will just add to our National Debt, as more money is borrowed by the federal government to pay for goods and services.  In the private sector, raising the minimum wage to the degree that it raises expenses will result in two actions.  First, companies can deduct more expense, which will lower profitability and taxes paid to states and the federal government in corporate income taxes.  And, or companies will just include the additional expense in their prices in attempt to maintain the same profitability, assuming the market will allow it.   Problem is, people will only pay so much for a pizza, so pricing elasticity can be a factor that results in job losses. 

The bigger issue is prices at a store like Wal Mart, where most Welfare recipients use their Food Stamp Debit Cards to buy food.  Assuming their monthly Food Stamp amount is not increased, which would require an act of Congress, if prices go up at Wal Mart, which is likely if wages go up, the poor will have less buying power.   So, if the minimum wage is increased, the poor will be able to buy less food to feed their families.  It is what it is.   These Socialist Schemes often hurt the very people they are trying to help. 

Finally, if the cost of labor gets too high, whether minimum wage or not, low level jobs that require little skill, or education are automated, or sent overseas.   Home Depot now has self service check out with one clerk watching over four registers.   That is three jobs eliminated.  It would very easy to redesign registers for McDonald's so that the customer places an order directly, with one attendant watching 2 - 4 registers just to collect the money and make change, if a cash sale.   Obamanistas better be careful what they ask for because as usual it will be another job killer.  With the exception of a minimum wage for kids under 18, this Blogger favors elimination of the Minimum Wage altogether because it really is irrelevant.  The Free Market can and does determine wages, which is the reason anyone with any job skill, or education makes more than $10.10 an hour.  

The real issue is making sure that every kid leaves school, either with a marketable vocational education, or path to a four year university education.   Plumbers and electricians make a whole lot more than $10.10 an hour.  Rather than demagogue this issue as Obamanistas will do for the next election cycle, can we at least have an honest discussion that produces a positive end result.        

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