President Obama, fresh off a three-day weekend of golf and “climate change” scare-mongering in California, has once again turned his attention to the issue Americans care most about: Raising the minimum wage to $10.10.
Just kidding. Actually, Gallup did a poll just last week on what Americans feel is the country’s biggest problem. The Top 10 list went like this:
• Unemployment and jobs
• The economy
• Dissatisfaction with government
• High cost of health care
• Federal debt
• Illegal aliens
• Family decline
• Poor education
• Lack of money
Shockingly, raising the minimum wage for the lowest-level jobs didn’t make the Top 10. One reason, perhaps: You have to have a job before you start worrying about what you’re getting paid.
Congress created the minimum wage in 1938 during FDR’s “New Deal.” The rate started at 25 cents (that equals $4.13 in 2014 dollars). Over the last 76 years, the rate has averaged about $6.75 an hour. It hit a high of $9.37 in today’s dollars during LBJ’s “Great Society” and a low in the post-World War II boom of 1948 ($3.87 today). Then again, the unemployment rate that year was half what it is today, 3.4 percent.
Earning just the minimum wage, working 40 hours a week 52 weeks a year, would now net a worker $15,080 — not exactly a great wage. Still, that puts the worker almost $3,600 above the federal poverty level, and if that worker has a significant other who also makes minimum wage, the two of them wouldn’t be below the poverty line until they have four children ($31,590 for a household of six). Of course, that’s pre-tax.
So the question is: Should minimum wage be higher? Probably. A rate of, say, $8.50 would bump that single worker’s pay by $2,600 — nothing to sneeze at. But a jump to $10.10 an hour would bring with it a slew of other problems, including a hefty burden for small businesses.
The nonpartisan Congressional Budget Office on Tuesday released a new report that said such a dramatic increase could cause employers to lay off workers or hire fewer, which would reduce employment by 500,000 jobs — or maybe twice that.
“Today’s CBO report shows that raising the minimum wage could destroy as many as one million jobs, a devastating blow to the very people that need help most,” Senate Minority Leader Mitch McConnell said in a statement. And the estimate comes on top of another report that found Obamacare could reduce the workforce by some 2.5 million workers.
Once again, though, the White House — which cites CBO numbers when they fit the Democratic agenda — took issue with the latest findings. Obama spokesman Jay Carney said “respected economists” say the opposite of the CBO, “that there is not evidence that it has a significant impact on jobs, and that, to the contrary, it’s beneficial to the economy and to efficiency and productivity.”
“And the theory behind the opposition to raising the minimum wage — that it costs jobs — if you tease it out all the way, then there shouldn’t be a minimum wage at all,” he said. Ah, the White House, always ready to “tease it all the way out.” And the media? They couldn’t care less — there was just one question on the minimum-wage increase asked at Tuesday’s briefing.
The president and congressional Democrats are once again looking for a wedge issue to divide and conquer during the 2014 midterm elections. In 2008, it was “The 1 Percent”; in 2014, it’ll be the 2.2 percent of Americans who earn the minimum wage. “We’ve got to build an economy that works for everybody, not just a fortunate few,” the president said last week.
But they ignore the real problem: Lack of upward mobility. A functioning economy needs a steady flow of increasingly experienced workers. Sure, right out of college, young people can get stuck with an entry-level, minimum wage job. But within a few years, they have moved up the ladder, opening slots for more entry-level workers.
Now, however, millions of young people — college graduates, many in their mid-20s — are struggling to find that first job. While they should be moving into Job 2 or 3, with the pay raises that come with promotions, they’re not even working. Millions have been forced to move back in with their parents.
Mr. Obama says Congress could raise the minimum wage “without requiring a single dollar in new taxes or spending. It will give more businesses more customers with more money to spend — and that means growing the economy for everyone.”
The non-partisan CBO says not so. But the president doesn’t really care, he just needs an issue. Americans, though, know the real issue — jobs. Without a job, the minimum wage doesn’t matter one bit.
• Joseph Curl covered the White House and politics for a decade for The Washington Times and is now editor of the Drudge Report. He can be reached at email@example.com and on Twitter @josephcurl