President Barack Obama’s White House has put its own spin on Tuesday’s report from the Congressional Budget Office — a report that anticipates another 500,000 lost American jobs if the President manages to get the Federal minimum wage increased to $10.10 per hour.
As you might have guessed, it’s a pretty socialist spin.
On their official whitehouse.gov blog, economists Jason Furman and Betsey Stevenson squinted to find a few silver linings in the CBO report, concluding that the CBO didn’t take into account all the variables mentioned in several cherry-picked academic studies Furman and Stevenson cherry-picked themselves to spin their case.
Furman chalked most of his and Stevenson’s disputing of the CBO’s job-loss findings up to “respectful disagreement among economists.”
But it’s the last paragraph in the blog that reveals the Administration’s socialism. Furman and Stevenson actually advocate for systemic wealth redistribution by suggesting that employers “accept” lower profit margins.
Here’s the offending passage:
Overall the logic for the finding that raising the minimum wage does not result in large adverse impacts on employment is that paying workers a better wage can improve productivity and thereby reduce unit labor costs. These adjustments, along with others that firms can make, help explain why the increase in the minimum wage need not lead to a reduction in employment. Higher wages lead to lower turnover, reducing the amount employers must spend recruiting and training new employees. Paying workers more can also improve motivation, morale, focus, and health, all of which can make workers more productive. In addition, by reducing absenteeism, higher wages can increase the productivity of coworkers who depend on each other or work in teams. In addition, businesses can adjust in other ways rather than reducing employment (for example, by accepting lower profit margins). CBO’s estimates do not appear to fully reflect the increased emphasis on all of these factors from the recent economics literature.
The CBO report itself said an increase in the minimum wage would benefit the people who received the increase, so that’s a non-issue. The report’s finding that 900,000 people would be raised out of poverty with a $10.10 minimum wage is dubious, because the impoverished class of Americans under Barack Obama’s perverse extension of “poverty” into the middle class shows no signs of stopping its expansion.
The problem with that language is that it’s misleading: Employers “accept” lower profit margins when they shape benefits packages that buffer the full cost of health insurance from their group-insured employees. But they don’t have any choice but to “accept” lower profit margins that are written into Federal law; we’re already witnessing that with Obamacare. In fact, we’ve been witnessing the minimum wage as a creeping socialist tool since it first took root in 1938 (the Supreme Court had declared the minimum wage unConstitutional only three years earlier, before upholding it as part of the Fair Labor Standards Act.)
Venezuelan President Nicolas Maduro illustrated a socialist notion of “acceptance” earlier this month when he gave domestic businesses a weekend-long amnesty to comply with his “Fair Prices Act” — a sliver of that Nation’s wealth-redistribution scheme that differs only from the current American minimum wage battle in its advanced-stage desperation. “I have called for self-regulation of products and prices,” he announced. “I’ll give businesses until Monday to comply. Come Monday, if I find companies violating the Law of Fair Prices, I’ll take more radical measures.”