The Obama administration has put little to no effort into reviving the jobs market in our country. The President’s Jobs Council shutdown in January 2013 after only having met 4 times. When it was shutdown the unemployment rate still sat at 7.8%. Although, the unemployment rate has supposedly dropped to 6.7% (I say supposedly because the way the administration measures a “job” is sketchy), this year the administration seems determined to kill what little job growth the country has managed in the last few years.
First, the Obama administration proposed that the minimum wage be raised to $10.10 over a two year time period. While $10.10 is less than the $15 that fast food workers are demanding, it is still a steep jump and would be an automatic job killer. According to the CBO, raising the minimum wage to $10.10 would hurt the economy and kill 500,000 jobs by 2016.
Even Bill Gates, a liberal by all accounts, agrees that raising the minimum wage is bad for the economy, saying in a recent interview that raising the minimum wage would “cause job destruction.” Also, this week 500 economists, including four Nobel laureates, signed a letter to Washington denouncing a minimum wage hike. In the letter, the economists cited the CBO’s finding, and further stated,
As economists, we understand the fragile nature of this recovery and the dire financial realities of the nearly 50 million Americans living in poverty. To alleviate these burdens for families and improve our local, regional, and national economies, we need a mix of solutions that encourage employment, business creation, and boost earnings rather than across-the-board mandates that raise the cost of labor.
So the CBO, Bill Gates and 500 economists say raising the minimum wage is bad for jobs and the economy, but I am sure the Obama administration thinks they know better and will continue to push for a minimum wage hike.
Next in his push to destroy the jobs market, President Obama this week used an executive action to expand overtime. In a statement on March 13, President Obama said that he was directing the Department of Labor to propose new rules that would expand the number of workers who are eligible for overtime pay. He went on to say, “Today, I’m gonna use my pen to give more Americans the chance to earn overtime pay that they deserve. … If you have to work more, you should get paid more.”
Currently, in addition to salaried employees making more than $455 a week, those labeled as supervisor, manager, or who are in executive or professional positions are not required to be paid overtime.
While forcing businesses to pay overtime to more employees may seem like a good idea to the average Joe, the problem, once again, is that forcing a company to do anything, especially a small business, could be detrimental to their bottom line and to the economy. If a company doesn’t have the extra funds to pay its employees, one of three things will happen, 1) the company will be forced to pay overtime and raise the cost of goods and services (which will hurt the consumer), 2) the company will cut the salary of the salaried employee, or 3) the company will be forced to go out of business because they cannot afford the increased labor cost therefore causing the unemployment rate to rise.
None of the above three scenarios helps the economy, the jobs market, or the average American. However, both raising the minimum wage and expanding overtime are not The White House’s efforts to help the economy, but according to the The Hill rather “part of a populist election-year push targeting income inequality by the White House”, or better yet, a way for the Democrats to pretend they care about working class Americans and get more votes on election day.