The Democrats have a jobs plan. They want to kill about a half million of them.
President Barack Obama, Kentucky U.S. Senate candidate Alison Lundergan Grimes, U.S. Rep. John Yarmuth, and Kentucky Speaker of the House Greg Stumbo propose gradually increasing the minimum wage to $10.10 per hour. This forced wage hike is their big idea for distracting voters from the Obamacare disaster before November's elections.
The non-partisan Congressional Budget Office estimates that the Democratic plan would eliminate about 500,000 jobs. Democrats deny it, but do not really care.
For them, it is all about the political gesture, not the real life results. Raising the minimum wage polls well so the liberals listed above could not care less that it would reduce already anemic employment.
Many media stories present the CBO report as if the job loss is somehow offset by increased incomes for some. In truth, the report reveals that raising the minimum wage would produce a lot of other bad consequences, too.
For example, just 19 percent of the increased earnings for low-wage workers resulting from the higher minimum wage would go "to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold."
That's not all. CBO says "the increased earnings for some workers would be accompanied by reductions in real (inflation-adjusted) income for the people who became jobless because of the minimum wage increase, for business owners, and for consumers facing higher prices."
Administration apologists who praised CBO as the gold standard when it issued reports favorable to aspects of Obamacare are attacking this report. But CBO Director Doug Elmendorf stands by it, saying the "analysis on the effects of raising the minimum wage is completely consistent with the latest thinking in the economic profession."
Grimes tried to act as if the CBO's stinging indictment of her top campaign issue did not happen. She issued a typically obtuse and pandering statement that suggested the minimum wage increase would affect only women.
This CBO report comes on the heels of another concluding that Obamacare "will reduce the total number of hours worked" by numbers that represent "a decline in the number of full-time equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024." Thus, according to CBO, the increase in American job growth over the period "will be smaller than it would have been in the absence of" Obamacare.
Elmendorf, a former Clinton administration apparatchik whom congressional Democrats put in charge of CBO, recently testified that Obamacare "will reduce the total number of hours worked in the economy by between 1.5 and 2 percent." He added, "By providing heavily subsidized health insurance to people with very low income, and then withdrawing those subsidies as income rises, the Act creates a disincentive for people to work."
White House spinners peddled the preposterous party line that it was a good thing that those receiving Obamacare subsidies could quit work or cut hours. Will these same propagandists who are utterly unfamiliar with basic economic principles now claim that it is a good thing that so many would be liberated from work by raising the minimum wage?
A higher minimum wage and Obamacare both increase labor costs to employers. The demand for labor therefore goes down. But Democrats just do not get it and resist anything that would make it more attractive for businesses to hire more workers.
The U.S. labor force participation rate was 63 percent in January. That is down 2.9 points since the Obama administration began in 2009 and is the lowest rate since the comparably incompetent administration of Jimmy Carter in 1978. Yes, Baby Boomer retirements play a role, but so do bad Democratic economic policies.
As if the bleak employment picture was not enough, Elmendorf also recently reminded Congress that, "The large budget deficits recorded in recent years have substantially increased federal debt, and the amount of debt relative to the size of the economy is now very high by historical standards."
He warns, "Such large and growing federal debt could have serious negative consequences, including restraining economic growth in the long term, giving policymakers less flexibility to respond to unexpected challenges, and eventually increasing the risk of a fiscal crisis (in which investors would demand high interest rates to buy the government's debt)."
2013 ended with a record number of Americans on federal disability (11 million) and food stamps (48 million). Clearly, the U. S. economy still stinks.
Despite the devastating CBO report (available here: http://www.cbo.gov/publication/44995), Democrats stubbornly support a minimum wage increase that will kill jobs. Surely Americans will decisively reject such nonsense come November. If not, despair is warranted and we deserve the depressing future we will get.
John David Dyche is a Louisville attorney and a political commentator for WDRB.com.
Check out these recently discussed stories and voice your opinion...