By Tom Quiner
That’s a harsh headline.
I know some great people who hold liberal views, and they are not shallow people. In fact, so very many of them are bright, caring people that I hesitate to describe their worldview as shallow.
But how can I not, in light of the silliness of the president’s State of the Union address, and its aftermath?
The president says the way to increase jobs is to increase the cost of labor by increasing the minimum wage by $1.75 an hour. The MW is currently $7.25. The president wants to boost it to $9 by 2015. As I mentioned in yesterday’s post, this comes on the heals of a 41% increase in the MW since President Obama took office.
Does anyone really think this will increase jobs?
Let’s say you own a small business, maybe a restaurant. You have ten employees who work an average of 35 hours a week.
Obama’s increase in the minimum wage will cost you an extra $61.25 per employee per week.
That’s an extra $612.50 per week in payroll for you.
Extrapolating further, this increase in the MW costs the owner an extra $31,850 each year.
Where’s the money going to come from? Can he increase his prices to recoup it? Doubtful, especially in the stagnant Obama economy.
If not from higher prices, where will the bucks come from? Mr. Obama doesn’t know this, but small businesses run on a tight margin. The owner of our hypothetical business is going to have to cut back. He’ll have to let at least three employees go to make up for the government-imposed increase in his labor costs.
I go back to my harsh headline. An increase in the minimum wage is illogical if you desire to increase employment. Mr. Obama exhibits shallow thinking on the surface. There is an underlying political motivation, though. He wishes to support labor unions who desperately want to see the MW increased. Why should they care? After all, union members earn far more than the minimum wage.
Here’s why, according to the late, great Nobel laureate economist, Milton Friedman:
[Unions] “favor an ever higher minimum wage as a way to protect the members of their unions from competition.”
Does Obama care about folks with low skills? Maybe he does, but the MW doesn’t. Again, as Mr. Friedman points out:
“The minimum wage requires employers to discriminate against persons with low skills. No one describes it that way, but that is in fact what it is.”
Liberal thought demands that small businesses pay someone what they need rather than what they’re worth. What shallow thinking. If you do it that way, several things happen. The low skill person has less incentive to develop new, more marketable skills since they are not being paid what they’re really worth.
As a result, the employer is forced to either subsidize his employee’s low skills and pay him more than he’s worth; or else fire the employee; or else go out of business when government-mandated wages become more than the business can bear.
That raises a question: is a person better off employed at $7.25 or unemployed at $9 per hour? The president and his party, along with the mainstream media, refuse to address this question.
Rather, they devote endless air time discussing the Republican response by Senator Marco Rubio. Instead of discussing what Mr. Rubio says, they focus their energies on the fact that he took a drink of water during his speech.
CNN asked if this would be a “career ender” for Marco Rubio?
The president presents an illogical policy initiative, that the way to increase employment is to club small business owners over the head by increasing labor costs.
And all anyone on the left talks about is that Senator Rubio took a drink of water when he got thirsty.
The shallowness of liberalism.