Wednesday, February 26, 2014

Progressive Priorities

For the entire Obama administration, poll after poll has shown that the nation's top priority is jobs. But, ask any Progressive what his top priority is and he will say "income inequality". To the rest of the country, this is a pretty low priority but the Progressives are fixated on this. This not only puts them out of step with the country as a whole, it puts them at odds with it.

Raising the minimum wage is the big Progressive cause right now. To hear them talk about it, this is easy because of some basic assumptions they made.

First, they point to studies that have shown that minor raises in the minimum wage were absorbed with little loss of jobs. Then they insist that their proposed incease of nearly 40% will also be absorbed. When the Congressional Budget Office projected that it was likely to cost a half million jobs, they rushed to discredit the CBO.

I suspect that the Progressives think that the additional money will come from top executives' salaries. Nothing else explains their insistence that raising the minimum wage will have any real effect on income inequality. This reflects the influence of Marxism on their thinking where the economy is a zero sum system. No one can make money without taking it from someone else. In many ways, Progressive thinking is stuck in the 19th century.

Another assumption is that people making more than the current minimum will be given a commensurate raise. This is even included in the CBO figures. I am doubtful because of personal experience. I was working on a payroll system back during the high-inflationary late 1970s (when companies wrote their payroll systems in-house). I was asked to write a program that would raise everyone to the new minimum wage. I asked about the people who were making more than the old minimum but less than the new. I was told that they were back to minimum.

That make sense. Companies will be squeezed by the increase. They will cut corners where they can which means that they will only raise people to the new minimum.

There will also be a squeeze on cost of living raises.

So that's what the progressives want to do to the economy. There is also what they have already done. Obamacare has a number of incentives built into it that discourage job creation. They even admitted this is the most recent executive order. Mid-range employers have to swear that they did not lay people off in order to qualify for the exemption.

All things considered, the Progressives' slogan should be "Fewer but better jobs". This isn't quite accurate but it's close and it represents how they actually think. This is born out by looking at heavily unionized states vs. right to work states. The unionized states have slightly higher wages and unemployment.

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