President Obama Explains The Minimum Wage - Live Feed

Tyler Durden's picture

With even Warren Buffett saying it's a bad idea, we can't wait to hear how President Obama will explain how his move to raise the minimum wage will create jobs and save the middle class....

 

http://www.whitehouse.gov/sites/default/themes/whitehouse/img/facebook_b...) no-repeat; padding-top: 13px; height: 30px; float: left;">JOIN THE LIVE CHAT

 

As a gentle reminder,

With President Obama’s State of the Union Address and its associated campaign prominently featuring increased minimum wage, tired arguments for raising the minimum wage are being once again retreaded. Unfortunately, they compound failures of logic, measurement and evidence.

It would stimulate the economy. If I pay $1 more than necessary to hire a worker, I get $1 less in services for my money. The increase in the workers’ consumption enabled by that $1 is a transfer from me to them, not a net gain.

It would increase others’ wages as well. Unfortunately, higher minimum wages reduce available jobs, and fewer alternatives don’t create higher wages. Unions and other competitors would see wage hikes, because alternatives become more costly, but other workers get fewer goods and services in exchange for their labor —i.e., decreased real wages.

It would make work more attractive, reducing government dependence. That would require additional jobs became available at a higher wage. However, fewer jobs will be available, so fewer people would be able to work their way out of dependence.

The minimum wage hasn’t “kept up” with inflation since the 1960s. This presumes without justification that the 1960’s minimum wage was economically justified. However, it was a Great Society aberration that coincided with a virtual stop in progress against poverty.

It also ignores that much of employers’ compensation goes to Social Security, Medicare, workmen’s compensation, new Obamacare mandates, etc., rather than as wages. As government- mandated employment costs ballon, the minimum wage substantially understates compensation.

The claim uses the CPI, widely known to overstate inflation, to calculate “real” wages. And the bias was even larger in the past. So going back to the 1960s for comparison mainly introduces a half century of compounded overstatements of inflation to dramatically understate real wage growth.

It would decrease the number of families in poverty. Unfortunately, as labor economist Mark Wilson put it, “evidence from a large number of academic studies suggests that minimum wage increases don’t reduce poverty levels.” One reason is that most minimum wage workers are secondary workers in non-poor households, while very few are heads of households.

Even important businesses endorse raising the minimum wage. Unionized businesses and those who already pay more than the federal minimum gain from raising it, by increasing rivals’ costs. That those employers who would gain at others’ expense endorse a higher minimum wage says nothing about the validity of arguments against it.

A higher minimum wage will pay for itself in higher productivity, lower turnover, employee morale, etc. Every employer who believed that to be true in their circumstances would pay more without needing any mandate. Are those businesses always accused of being too greedy not greedy enough? Further, why do those states with the highest state minimum wages have higher unemployment rates and lower economic growth rates?

Even if some lose their jobs, most low-wage workers will gain from a higher minimum wage. This assumes that other terms of work will remain unchanged, which is false. For those who keep their jobs, fringe benefits, on-the-job training, etc., will fall to offset additional mandated wages. And the increased wages may well be less valuable (as well as taxable) than what is given up, especially on-the-job training that helps people learn their way out of poverty. That is why labor force participation rates fall and quit rates rise when the minimum wage rises, in contrast to what would happen if those workers were made better off.

Supporters of a higher minimum wage claim altruism to help working families as their motive. But it actually harms most of those supposedly be helped, while benefitting supporters by raising costs facing competitors. They may claim, as did the Chairman of Ben & Jerry’s Board, “I support a living wage economically, morally and with deep conviction,” but it is really a self-interested infringement on freedom that is economically stupid and morally abusive.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
NemoDeNovo's picture

OMG PLease do not make me Shoot my Computer!!!  Where is the MUTE button for this AzzHat.

Au_Ag_CuPbCu's picture

Hey, if raising the minimum wage creates jobs why stop at $10.10 an hour?  Just think what a $100/hour would "create."  IDIOT!

Zymurguy's picture

Sounds liek a great idea... let's raise the debt ceiling up to 1000 Trillion too.  I mean, it really doesn't matter right?

flacon's picture

OBAMA: "We need to raise the bar a little higher."

Technically he is correct, raising the minimum wage does raise the BAR to entry level jobs - making them harder to attain. 

lordylord's picture

Obama is as qualified to speak on economics as he is on constitutional law. 

Real Estate Geek's picture

The CPI OVERSTATES inflation?!?!? WTF is he smoking?

Stuck on Zero's picture

Obama has not explained why the minimum wage should be raised.  INFLATION! 

Caused by big government, too much control, too much corruption, too much spending, poor leadership, too much printing, the Fed, and everything government.

 

akarc's picture

Just wanted to add "Corporate corruption" for some balance. 

centerline's picture

Debt is just money we owe to ourselves according to Krugman.  So, why not?

CrazyCooter's picture

With Obamacare and this minimum wage idiocy, all we need to complete the trifecta is an Executive Order requiring the citizenry to purchase a new American automobile every year! Just think of the jobs!

Regards,

Cooter

NOTaREALmerican's picture

Re:  Just think of the jobs!

It worked for Big-Mic building cool war toys.  Lots of people got rich on that,  right?

superflex's picture

Time to hit the mute button again.

Preezy pandering to his base.  

Gimme, gimme, gimme!

What a cunt.

James_Cole's picture

It worked for Big-Mic building cool war toys.  Lots of people got rich on that,  right?

Yeah guys like Buffett are happy to take endless .gov intervention / bailouts / corporate support worldwide. But that's all free market shit right? 

On the other hand, shocking that a guy with major investments in a whole bunch of companies that rely on wage suppression would be against a minimum wage hike. 

Tall Tom's picture

With Obamacare and this minimum wage idiocy, all we need to complete the trifecta is an Executive Order requiring the citizenry to purchase a new American automobile every year! Just think of the jobs!

 

MyRa completes the trifecta of how to destroy an economy. It will be made mandatory.

SAT 800's picture

Every economist in the world understands that a miniumum wage, or a raised minimum wage, which is a form of government price control, has two effects; it increases price inflation and it reduces marginal employment. The only rationale for this is buying voter sympathy from the dumb-dumbs.

Muddy1's picture

He'a looking for any distraction he can find to get his supporters mind off of Ukraine, his recommitment to protecting Ukraine since they had given up their nukes and gutted their military, the funds he gave to keep Ukraine on a leash, and his continuing incompetence.  What an effin MORON.

NOTaREALmerican's picture

Re:  What an effin MORON

A politician manipulating his dumbasses with bullshit doesn't make him a moron, it makes him a politician.

European American's picture

How in the world is this mother fucking Imposter in Chief still the president? When are we, am I, going to do something, above and beyond our chronic bitching? He's got to go. IT's overdue.

Armed Citizens and a Fascist Police State cannot coexist.

NOTaREALmerican's picture

Re:  Armed Citizens and a Fascist Police State cannot coexist

Where were you at when the NSA got started?

European American's picture

You mean, where was I at, in November of 1952, on the 4th?

If that is your question? If so, then I was about 460 days old, situated in the midwest.

http://www.youtube.com/watch?feature=player_detailpage&v=XkjLlZu9uno

NOTaREALmerican's picture

I was more interested in 2001

http://en.wikipedia.org/wiki/NSA_warrantless_surveillance_(2001%E2%80%9307)

The "Free world" keeps waiting for the "conservatives" to get as pissed about the 4th amendment as the 2nd.

 

 

European American's picture

It is my personal experience that one does not have to be a "Liberal" or a "Conservative" to get pissed. 

 

PS Where is this "Free World" you alluded to? I'd like to try and get a visa, if it's not too late.

akarc's picture

"Armed Citizens and a Fascist Police State cannot coexist."

Anyone can take some money and buy a gun. It's a little tougher to use it. As the Facist Police State has demonstrated on more than one occasion they have no qualms about stompin your ass into the ground with owverwhelming force. Just ask the occupy kids.

Oh but that was o.k. cause their rights didn't matter. Right? LEft? Constitution? 

Pig Circus's picture

The Marxist POS and his policies can only kill employment so he wants to force employer"s to pay people more. How fucked up is that?

Worst president evar.

pods's picture

The next one will be worse.

Count on it.

And if any of you cocksuckers start that phony red-blue team shit in the next few months I will personally drown a puppy.

pods

centerline's picture

But Hannity keeps telling me it is because there aren't any real conservatives in politics anymore.

akarc's picture

Hannity will tell you whatever you pay him to tell you on his way to the bank. Just another shill on another channel supported by corporations whose only goal is to brainwash you to blame someone else as you are trying to scape up enough change to buy 1/2 of one their products and finance the other half so the banks can get some too.

Dollar Bill Hiccup's picture

And they said Putin had lost control of reality?

Winston Churchill's picture

Quack,quack , and quack.

Lame d(f)uck.

Dollar Bill Hiccup's picture

Fiat wages!

 

Shazaam!

QQQBall's picture

I love the props. What a douche

SAT 800's picture

They left out the hundreds of giant flags and legions of goose stepping troops; I liked that part about the first one.

lolmao500's picture

Yeah but can he explain this?


UKRAINE TO DISCUSS MISSILE DEFENSE WITH U.S IN RETURN FOR FINANCIAL AID -- INTERFAX

This fucker is really trying to start ww3...

NATO to step up engagement with civilian and military leadership of Ukraine: Rasmussen

http://www.scmp.com/news/asia/article/1441024/chinese-jet-near-miss-nort...

Chinese jet in near miss with North Korean missile

Shenyang-bound flight missed shot by minutes, but could have been hit on rocket’s descent

China invading North Korea could have been a big lulz.

NATO says today decided to intensify military training with Ukraine. Could we see NATO forces deploying to Ukraine for training soon?

Turkey grants access to Black Sea for US ship within limits of Montreux Convention.

starman's picture

Die you fucking social worker die already!!!!!

RafterManFMJ's picture

Saves us, Hillary! Oh sweet baby Jesus, saves us Hillary!!

Platinum's picture

A beacon? A beacon of bullshit is more like it.

QQQBall's picture

It GOT four parts.... Columbia - not likely

TrustWho's picture

Oh, Obama so cool. I am starting to understand Chris Mathew's warm tickle.

Obama, "America is great place. You fool the people and get to be Pesident, well, you get to play gold and fly around the world on Air Force ONE....just ask Michelle.

skwid vacuous's picture

Hail to the Queef!

QQQBall's picture

He always goes to the colleges when  SHTF...

Zymurguy's picture

yeah, the worst of the sheeple on the planet.

akarc's picture

Hey are you bad mouthin first graders?

Seasmoke's picture

Guess that's not as bad  as Bush going to 1st Grade to read a book. 

Pooper Popper's picture

Fuck you barry! You have been a very bad monkey!!!

Seasmoke's picture

He can always get a job in those Jobbuilder.com commercials

akarc's picture

You feel better now or you got to pop some more poop?

Zymurguy's picture

this guy is such a fucking loser.  can't believe his kids would even own up to him these days.  what a dumb fuk too... raise wages?  That results in what... raised prices or fewer workers?  Can't have everything my dear.  in the mean time, keep reducing the purchasing power of our currency, thanks.