From the National Review Editors The Minimum Wages of Politics:
In any case, the main problem facing poor families is not a low minimum wage, but high unemployment. While the president likes to cite poorly understood income figures (which tell us little or nothing about the incomes of actual households at any given economic level, because the people who are in the top 20 percent or bottom 20 percent change from year to year and significantly from decade to decade), he ought to be looking instead at the data concerning household net worth and continuity of employment, which reveal problems connected tangentially at most with statutory wage floors.
There is a way to increase wages while increasing overall employment, and that is to raise the demand for labor. Unfortunately for the planners and schemers in Washington, doing so requires more than simply passing a law. Higher demand for labor is the result of a growing and productive economy, which requires substantial capital investment, innovation, entrepreneurship, and — worst of all from the White House’s perspective — time.
We’ve learned from the fiasco of Obamacare that passing a law purporting to make insurance more affordable and more accessible does not necessarily make insurance more affordable and more accessible, and that most of the promises attached to that so-called reform project either turned out to be unachievable in the face of economic reality or were cynical misrepresentations from the beginning. Likewise, you can pass a bill purporting to raise wages, but it will not necessarily result in higher wages. It is as likely to result in higher unemployment among lower-skilled workers, stagnation, and labor downsizing.
But as poor a policy initiative as the minimum-wage proposal is, what is perhaps worst about it is the political opportunity cost: While we’re having another emotionally charged debate about this third-tier issue, the real long-term problems facing our economy go unmentioned and unaddressed.
Also James Sherk in National Review Online writes Obama’s Pay and Productivity Misconception:
With economic statistics the devil often lies in the details. The wage and productivity data come from different surveys using different methods and covering different groups of workers: statistical apples and oranges. The facile comparison has several problems.
For one, it does not look at everything workers earn. Looking only at wages ignores the non-cash benefits that have become an increasingly large share of workers’ total compensation. Economists expect total compensation to rise with productivity. Nothing says that additional compensation will come entirely in cash.
Data is distorted to make a claim that defies common sense. That has become a common tactic on many policy fronts.
Again from National Review Online, Larry Kudlow writes The Challenge is Growth, Not Inequality:
Obama comes from a long line of liberals whose guiding star is the equality ofresult, i.e., income leveling, rather than the equality of opportunity, which is the heart of free-market capitalism. But in reverting back to his obsession with income inequality, he repeats his tired mantra of raising the minimum wage, ending so-called tax loopholes, launching shovel-ready infrastructure projects, and ending budget caps and the spending-cut sequester.
And none of that has a thing to do with income inequality. And none of it has anything to do with economic growth. It’s just a tired old laundry list from a tired second-term administration that has no new ideas and is fighting its hardest to preserve the worst idea of all: centralized, state-run, Obamacare health planning.
For a man having campaigned on change he recycles the old bad ideas. It defies logic and common sense to believe a higher minimum wage has no impact on employment, no matter how many studies he trots out to claim otherwise. But as it turns out it also defies legitimate research.
The same is true on the claim that wages and productivity has diverged. Once again data is cherry picked to reach a pre-ordained conclusion.
Like so many government initiatives they want to provide a benefit (in exchange for votes and power) but they do not want to pay for it, so they create some Rube Goldberg economic fantasy to hide the true cost from everyone- especially themselves. Only an economic fool would believe that some arrogant, all knowing elitist ass can centrally set prices for anything – wages, healthcare, energy, – ANYTHING -without significant consequences: some easily predictable but often not. It did not work for Stalin, Mao, Nixon, or Carter and it will not work for our current incarnation of the All Knowing Wizard.