OPINION:
Labor Day is the day certain politicians set aside for their annual climb up Big Rock Candy Mountain. The liberals and the “progressives” promise, if only they can get elected, to enact legislation to punish employers who mistreat their employees, to eliminate income inequality and to create a better life for everyone. Hillary Rodham Clinton even promised to send bad employers, conveniently not named, to prison. President Obama made sport with Republican “enemies” of working men and women, and ordered federal employers to make maternity leave more generous.
They all promised to raise the federal minimum wage to $10 or more. Mr. Obama wants to raise it to $15, as the left demands. Why not, since they’re not paying for it. The president and the like-minded uniformly insist that paying such a wage hike, doubling the current minimum federal wage paid to mostly untrained workers, won’t worsen the unemployment numbers. Liberals are afflicted with an itch to ignore the laws of economics, and believe that executive orders, rules and regulations enable them to transcend the real world where employers must live and make a payroll.
Robert Reich, the former secretary of labor, was all over the place on Labor Day, leading the cheers for a higher minimum wage. Dismissing studies demonstrating that Mr. Obama’s $10.10 an hour minimum would cost 500,000 jobs now held by the young, the poor and part-timers, Mr. Reich argues that even if it does, that would be a good thing. People shouldn’t be asked to work for less than what they should be paid.
About 3 percent of all workers are paid less than $8.50 an hour; fewer in high-wage states and more in unexpected places, like Mississippi. Mr. Reich and his fantasy-world friends would require employers in all states to pay the maximum minimum wage, whether there actually are jobs to pay the unskilled at this rate. Puerto Rico is an example of what happens when a government relies on wishes and dreams rather than basic economics.
Puerto Rico is a basket case in large measure because Congress in the 1980s imposed the mainland minimum wage on an island becalmed in bad times. In the decade after that, an analysis by the National Bureau of Economic Research finds that imposing the increase in the minimum wage actually raised unemployment on the island from 8 to 10 percent and sent thousands of the unemployed poor scurrying to the United States. Every economic study since credits that unrealistic mandate with a major role in turning Puerto Rico into the Greece of the Western Hemisphere.
The irony inherent in buying into the idea that welfare is ethically better than work is that it hurts the very people the liberals and “progressives” say they’re trying to help. Just ask these people a version of Ronald Reagan’s devastating question from the 1980 presidential campaign: “Are you better off today than you were eight years ago?” Who needs an economist to guess what the answer will be?
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