President Obama threw around quite a few deliberately misleading ‘statistics’ and ‘facts’ last night during his State of the Union, but among the most stupidly egregious was his claim (nay, his refrain) that the corporate world is currently rolling in the chips at the direct expense of the middle class, and that the middle class’s dire straits can only be absolved with more forcible big-government engineering: “Corporate profits have rocketed to all-time highs – but for more than a decade, wages and incomes have barely budged.”
Okay, President Obama, have it your way — the average hourly wage in real dollars has in fact been pretty flat for about fifty years, but wages and incomes are far from necessarily accurate measures of the economic growth and prosperity that make everyone better off. This is what economic growth really means: Not that incomes’ numerical value is increasing (which can be entirely meaningless, thanks to inflation), but that those incomes’ purchasing power is increasing.
Now, it is definitely true that our economy has struggled to create jobs and wealth throughout this longtime economic “recovery” — which is stubbornly lingering because of the many top-heavy, overly bureaucratic and regulatory, growth-discouraging progressive policies under which businesses have been fighting for survival in the past few years. One of President Obama’s proffered solutions to this pickle? More government intervention and completely fake stimulus, obviously:
We know our economy is stronger when we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, nineteen states have chosen to bump theirs even higher.
Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets. In fact, working folks shouldn’t have to wait year after year for the minimum wage to go up while CEO pay has never been higher.
(Do you suppose that maybe Big Labor is mad at him for something? Because this was about as pitiful as a bold-faced pander can get.)
Out of what magical hiding place is all of this extra money for minimum wage hikes supposed to come from? From the greedy, hoard-happy CEOs yucking it up over the little people? Wrong-o: This proposed minimum wage increase would make itself felt in the rest of the economy in any of several ways, mostly via higher prices and fewer jobs.
Higher prices and fewer jobs do not grow the economy, do not stimulate the middle class, do not enhance anyone’s purchasing power, and in the long run make everybody worse off. Just like pretty much all “well-meaning” government mega-programs and regulations meant specifically to stave off poverty, ever, the regressive consequences end up hurting the very people they’re meant to help.
I mean, come on; out of everything he might’ve proposed, a mandated minimum wage hike is practically tailor-made to worsen our national unemployment rate:
But the business community says it would be a job killer. A minimum wage hike “could be very problematic for segments of a struggling small-business community,” says the National Small Business Association in a statement.
David French, senior vice president for government relations at the National Retail Federation, said in a statement: “A minimum wage hike right now would be one more factor driving up costs for employers and creating headwinds for job creation, especially among the small businesses that create most of our nation’s new jobs.”
The Employment Policies Institute (EPI) has multiple studies showing how minimum wage hikes, “including the one called for by the president, lead to job loss, not job creation, as well as fail to reduce poverty or stimulate the economy,” says EPI spokesman Stephen Ford. …
Research published in the Southern Economic Journal from economists at Cornell and American Universities have estimated that a minimum wage hike proposed by the President “would eliminate at least 467,000 jobs,” notes EPI’s Ford. “The study also found that the higher minimum wage would not reduce poverty, as a majority of beneficiaries live in households with incomes about the poverty level.”
Obamanomics: Ruining the economy, one mistaken big-government attempt to fix it at a time.