The Continued Assault On Undereducated And The Underskilled

Posted on February 14, 2013 | 3 Comments

On Tuesday night, Barack Obama announced a continued assault on the prosperity of America’s most vulnerable; the undereducated and the underskilled.  He did this in his annual State of the Union Address when he announced a desire to raise the federal minimum wage to $9.00 an hour.

While the president may very well feel that he can slow the rise of the oceans:

Yes, while he may slow the rise of the oceans, he is not able to defy the laws of economics.

Now don’t get me wrong, the intentions are noble and honorable, if you are to believe politicians are capable of such things.  We all would like to see the folks who make the least be able to earn more and enjoy a better life.  We want to see a steady rise n the incomes of the poorest among us so that they too may avoid the constant worry of bills past due and the need to feed hungry children.

But that isn’t what Obama is doing.  In fact, what Obama is doing is sacrificing the very people that he claims to be helping in order to make a catchy and effective sound bit during his speech.  See, raising the minimum wage doesn’t help the people who are the ones making the least amount of money; it hurts them.

The minimum wage prevents business from hiring them in the first place.  It raises the barrier to entry past the meager skills that they posses.  At a time in their life when they should be willing to take a job, any job, to learn new skills, become proficient in new trades and crafts, during a time when they need to begin to understand the expectations of employers as it relates to employees, they are being priced out of the market.

The market is very effective at setting the value of scare resources.  And labor is nothing more than a scare resource; we all want more of it as cheaply as we can get it.  And so, in the course of voluntary trade, we set the rate at which we are willing to pay for it.  And most labor, believe it or not, is set at rates already ABOVE the minimum wage.

But for those entering the job market, such as high school kids, they are finding that they lack the skills required to demand such a wage.  And as a result, they are being left behind and find themselves unemployed.  This at a time when we need these young people working.  The years lost at the beginning of the working career are very difficult to make up.  And the longer they are out of the work force, the further and further they fall behind those in it.

If you wanted to target the poor an the undereducated, many of which are minorities, you would be hard pressed to contrive a more malicious program that would guarantee to make life worse for those folks than the impacts of minimum wage laws that Obama supports.

But who benefits?

Unions.

Barack Obama has made a decision.  He has placed a bet that he can secure the Union vote by selling out the poor, the undereducated and the underskilled all the while using words and rhetoric that would cause that group of people to support him.

It is depravity at its worst.

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3 responses to “The Continued Assault On Undereducated And The Underskilled”

  1. Scott Erb | February 14, 2013 at 1:50 pm | Reply

    I don’t think you’re right here – I think the minimum wage helps more than it hurts. It’s not something that can be argued just with economic theory though (economic theory at this level is either too simplistic so it seems like a clear argument, or fulls apart when complexities add up). The only way is to look at what happens in the US and elsewhere when minimum wages are set or go up. We need empirical evidence.

    • Pino | February 14, 2013 at 2:10 pm | Reply

      It’s not something that can be argued just with economic theory though (economic theory at this level is either too simplistic so it seems like a clear argument, or fulls apart when complexities add up). The only way is to look at what happens in the US and elsewhere when minimum wages are set or go up. We need empirical evidence.

      I found this today:

      Abstract
      We review the burgeoning literature on the employment effects of minimum
      wages – in the United States and in other countries – that was
      spurred by the new minimum wage research beginning in the early
      1990s. Our review indicates that there is a wide range of existing estimates
      and, accordingly, a lack of consensus about the overall effects
      on low-wage employment of an increase in the minimum wage. However,
      the oft-stated assertion that recent research fails to support the
      conclusion that the minimum wage reduces employment of low-skilled
      workers is clearly incorrect. A sizable majority of the studies surveyed
      in this monograph give a relatively consistent (although not always
      statistically significant) indication of negative employment effects of
      minimum wages. In addition, among the papers we view as providing
      the most credible evidence, almost all point to negative employment
      effects, both for the United States as well as for many other countries.
      Two other important conclusions emerge from our review. First, we
      see very few – if any – studies that provide convincing evidence of
      positive employment effects of minimum wages, especially from those
      studies that focus on the broader groups (rather than a narrow industry)
      for which the competitive model generally predicts disemployment
      effects. Second, the studies that focus on the least-skilled groups that
      are likely most directly affected by minimum wage increases provide
      relatively overwhelming evidence of stronger disemployment effects for
      these groups.

      It reduces employment AND it reduces employment in those group whom the initiators claim to be helping.

      For the life of me, I can’t understand why a subset of Americans continue to support a political party that has such a harmful impact on them. While at the same time promoting the greedy interests of a rich group of labor elites.

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