As amnesty becomes Barack Obama’s latest Bright Shiny Political Object, let’s not forget the previous one: hiking the minimum wage. The Obamanomics argument for minimum wage hike is that wealth redistribution creates jobs. Any law that forces money to disperse from The Few to The Many supposedly creates jobs, because The Many run out and spend it like crazy, creating bountiful opportunities for business formation and hiring. The eager recipients of redistributed largess sally forth with wads of government-provided cash in their hands, and businesses rise up to meet their needs, like flowers emerging from fertile ground to drink the spring rain. The fact that this has never, ever worked in practice, either in the United States of the 21st Century or anywhere else, does not diminish the intensity of Obama’s belief that it will start working any day now. The next round of seizure and redistribution will surely do the trick!
In case the point needs clarification: yes, the minimum wage is a form of redistribution. Employers are forced to pay more for labor that has not increased in value. The increased costs are passed along to consumers, often the same people who benefit from the increased minimum wage. A very large number of people who do not benefit from the minimum wage hike also pay these inflated prices. The government’s benevolent hand is highly visible to the beneficiaries, while the grasping hand is completely hidden from those who foot the bill. It’s one of the most perfect redistribution schemes ever devised, with virtually zero cost to the advocates, even when they fail to convince the public that a minimum wage increase is wise policy at the present time. It literally never hurts to try.
So if the minimum wage, like unemployment insurance, is supposed to provide an Obamanomic stimulus to the sluggish economy, on the theory that higher wages = more consumer spending = STIMULUS!, then what’s the deal with handing out millions of work permits to illegal aliens – a policy guaranteed to depress average wages?
A relatively small percentage of the U.S. workforce actually earns the federal minimum wage – about four percent of hourly workers, and only 2.6 percent of the total wage and salary base, according to the Pew Research Center. Half of them are less than 24 years old. The “rising …read more