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Minimum Wages and Minimal Logic

Those mischievous economists at the Congressional Budget Office are back in the news, this time with a report suggesting that raising the minimum wage would also raise the unemployment rate.
The notion that raising the cost of something such as unskilled labor might also reduce the demand for it will seem reasonable enough to anyone with a rudimentary understanding of economics, but it has provoked an outcry among those with a more sophisticated view of these things. There apparently are studies out there by some experts or another suggesting that raising the cost of something doesn’t affect the demand for it and that people will gladly continue paying a higher price for something long after the cost has exceed its actual economic value, no matter how many centuries of economic history sense suggest otherwise, and we are told that it would be downright anti-science to argue with an expert’s study. Advocates for an increase in the minimum wage also note that the CBO has concluded that minimum wage workers would make more money if the minimum wage were increased, which will also seem reasonable enough to anyone with a rudimentary understanding of economics, and argue that so far as social justice and all the jazz goes the lost jobs would be offset by the gains those lucky enough to keep their swelled wages.
Neither argument is convincing. The president and any economists supporting his call for raising the minimum wage to $10.10 an hour clearly haven’t spent much time lately in the drive-thru lane of a fast-food restaurant, where they surely would have encountered uncouth and innumerate workers whose feeble efforts could not possibly provide a profitable return on that exorbitant amount, and we don’t doubt there are far more of them than the 500,000 or that the CBO has estimated will get the axe. There’s also the distinct possibility that a few million more over-paid workers will demand a bump up above the minimum and find that they are no longer worth the cost. Despite our dissatisfaction with these workers’ performances we are not so insouciant about their fates as the more high-minded activists seem to be, and we don’t share the view that they’re better of unemployed at $10.10 an hour rather than employed at the current rates.
This is a most unfashionable point of view, however, and it remains to be seen if it will prevail. The last time the CBO raised such a fuss was when it reported that more than a million people will be induced to leave the labor force rather than relinquish their Obamacare subsidies, and presidential and bien-pensant opinion concluded that they’d all better off and free to pursue careers in the arts. As much as we’re looking forward to the artistic renaissance that will surely flower from all those fast-food workers laid off to make room burger-flipping robots, it doesn’t seem likely to spur an economic revival any time soon.

— Bud Norman

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Too Many Problems

Bashing Obamacare is becoming an difficult chore, as there are so many problems to point out. Any attention paid to one of the law’s myriad flaws is a distraction from another, and the full calamity of the convoluted contraption can be hard to see through all the damning details.
Much well-deserved ridicule has been heaped on the hugely expensive and barely functioning computer system that was supposed to enroll millions of Americans in health insurance plans, but even the harshest criticism left the impression it was all a matter of a few glitches that will quickly be worked out. The latest round of bad press concerns the puny number of people who have signed on to Obamacare, which is even punier when you exclude all the non-paying window-shoppers that the administration have dishonestly tacked on, but that will be attributed to the soon-to-be-fixed computer system. There have also been a slew of stories about the millions of people who have lost the insurance plans they were satisfied with, despite the president’s repeated and unequivocal promises that they would be able to keep their plan if they liked it, but The New York Times has already deemed the president’s misleading words a mere “incorrect promise” and we assured that it will soon be kept with a fix that is likely to cause other problems requiring similarly creative euphemisms.
This is not to mention the sticker shock that those suddenly un-covered citizens are experiencing, or the higher costs that millions more are paying to keep their plans rather than getting the promised the $2,500 windfall, or all the part-time work that employers are offering rather than deal with the costs and paperwork entailed with a full-time job, or the likelihood that all these problems will be exacerbated as the delayed employers’ mandate kicks in after the mid-term elections and more institutions find themselves forced to stop insurance plans. It’s enough to keep every reporter in the country busy, especially the ones who feel obliged to concoct some sort of plausible-sounding excuse for all these problems, and provides an excuse to overlook numerous other problems.
Still, a few intrepid reporters are finding other scandals worth noting. The estimable James O’Keefe, the youthful journalistic prankster who brought down the noxious ACORN community-organizing racket by walking into their offices in a ‘70s-era blaxploitation movie outfit and asking for advice on starting a prostitution business, has recently walked into the offices of the community-organizing rackets that are federally-funded to act as “navigators” through the choppy waters of Obamacare and found them eager to offer advice on committing insurance fraud. The Secretary of Health and Human Services was prodded by a congressional committee to concede that “It’s possible” the people collecting Social Security numbers and dates of birth and other potential identity-thieving information from citizens are felons, and the ones that O’Keefe encountered seem to have at least slightly larcenous natures. Although it’s possible to avoid these unsavory sorts by going on to that barely functioning computer system, but the congressional testimony suggests that the security there is also government-grade.
The billions of funding going to the community-organizing rackets is yet another problem, unless you’re a Democratic candidate hoping to use their information and other help in an upcoming campaign, and it’s well worth noting. Doing so would take notice away from all the other problems, but it seems as if we’ll have forever to grouse about Obamacare.

— Bud Norman