Millennials Do Have it Harder

by: the Common Constitutionalist

We hear it all the time from young people and it’s been repeated with each generation: It’s much harder today than it was for their parents. Of course invariably this turns out to be crap. Every generation has its challenges, but this time it may actually be worse.

Many are suffering in the stagnant Obama economy and it seems to be getting worse – not better. Those who have come of age during Obama’s reign of economic terror seem to suffering mightily.

It’s been well documented that millennials exiting college have little prospects and mountains of debt. Not a happy combination. And those who have either chosen not to attend college or simply can’t are suffering further.

For many the deck is becoming increasingly stacked against them. Beyond just the country’s overall economic anemia, there is the now gaining in popularity, “Fight for 15” – the arbitrarily chosen new “civil right” – the demand for everyone to make a minimum of $15/hr.

The “Fight for 15,” seems to picking up steam in state after state, particularly the more liberal ones who tend to have many of the largest concentrations of young minorities. These young minorities are beginning to find out what $15/hr. really means – even less opportunity for employment. No employer in the right mind will hire a young person with little to no experience nor demonstrative worth if they have a chance to instead hire an out of work 30 something. read more

An Argument Against The Minimum Wage Hike

By: the Common Constitutionalist

The fervor for a hike in the national minimum wage is picking up steam as RINO republicans like Mitt Romney are jumping on board.

Is it just me? I thought Romney was a brilliant businessman with a keen economic mind.

Could he possibly be signaling than another run at the White House is being considered? Why else would he pile on the populous political bandwagon?

With all the fuss over this issue, one would think it affects a large portion of the workforce.

Well, here are some statistics. Approximately 1.6 million people will be “positively” affected by the minimum wage, to start. There are about 318 million people in America today. Let’s just say half of them are of working age.

So without even doing the math, you can plainly see that we’re not even talking about a sliver of the overall working age population.

Now of these 1.6 million, a third, or about half a million are kids between the ages of 16 and 19. You know those kids. I sure do. Those with after school and weekend jobs (maybe, if their lucky), living at home with no expenses and virtually everything provided for them. read more

The Wage War

by: the Common Constitutionalist

Last week some flaming liberals in the House of Representatives suggested that the national minimum wage be raised from $7.50 to $10 an hour. (Probably part of the 78-81 communists in the party).

Why stop there? Let’s make it $12, $15 or maybe $25 an hour? Why not? Who wouldn’t want to be paid more.

As I’ve just demonstrated, the $10 figure is purely arbitrary, but according to the Hill Online, representative Jesse Jackson Jr. of Illinois and about two dozen other liberal Democrats endorsed legislation to raise the federal minimum wage immediately, thinking that this will be a hot election-year issue.

What a great idea! Once again Congress shows how out of touch they are with the business community. Of course the business community is not whom they wish to curry favor. Remember, they are for the working class, supposedly.

The Democrat leadership, however, has been a little less enthusiastic. It’s not that they don’t wish to raise the minimum wage. It’s that they wish to do it slowly, incrementally, so, like the frog, we don’t realize were being boiled alive.

The Politburo, or Democrat leadership if you like, would be more inclined to sign on to a proposal by Sen. Tom (dung heap) Harkin of Iowa. He proposes to gradually raise the rate to $9.80 over three years, but even this proposal has received scant attention from the leadership.

If you recall our beloved president issued a proclamation shortly after his 2008 victory that the minimum wage would be hiked to $9.50 an hour by 2011, but of course the compliant press would never dare call him on it.

Even the idiot consumer advocate Ralph Nader has weighed in on the subject. He said, “you get a conservative voter making eight bucks an hour at Walmart, here she is not going to say, I don’t want $10 and hour because I’m a conservative”.

No Ralph. I would hope that the people at Walmart and every person working would realize that these companies can’t just magically raise wages across the board. I would hope that the employee would say, “Hey, I’d rather make eight dollars an hour and be employed then the promise of $10 an hour and be laid off so the company could afford to pay the $10 an hour to all the other employees by using my paycheck”.

I know these are rhetorical questions, but do these dopes in Congress not understand anything about business? Have they never had to make a payroll? Have they never had to compete for business, maintain a minimum gross margin, had to lay someone off due to a down turn? Silly me. Of course not. When you can print money and deficit spend until after the cows come home, how could you know, or care.

These politicians don’t give a damn about the little guy. The little guy is who employs most Americans. The “Walmarts” of the world would be adversely affected, yes, but it really hurts the small business.

Issues that they never take into consideration are the difference between what an employee takes home in pay compared to his total compensation. Employers must pay for legally required worker benefits that include Social Security, Medicare, unemployment insurance, workers’ compensation, health and disability insurance benefits, and whatever paid leave benefits they offer, such as vacations, holidays and sick leave. It’s tempting to think of higher minimum wages as an anti-poverty weapon, but such an idea is ridiculous on it’s face. After all, if higher minimum wages could cure poverty, we could easily end worldwide poverty simply by telling poor nations to legislate higher minimum wages.

Poor people are not poor because of low wages. For the most part, they’re poor because of low productivity, and wages are connected to productivity. The effect of minimum wages is that of causing unemployment among low-skilled workers. If an employer must pay $10 an hour, plus mandates that might bring the employment cost of a worker to $14 or $15 an hour, does it pay him to hire a person who has the skills that permit him to produce only $8 worth of value per hour? Most employers would view hiring such a person as a losing economic proposition.

But, you say; are you heartless? Don’t these workers deserve a “Living Wage”? I could ask the same to those minimum wage advocates. Don’t you care about the workers?

The facts are that most studies of minimum wage laws in countries around the world show that fewer people are employed at artificially higher wage rates. Moreover, unemployment falls disproportionately on lower skilled workers, younger and inexperienced workers, and workers from minority groups. In other words, raise the wage rate & create greater unemployment.

A Cato Institute study cited data showing consistent job losses in places where local or regional “living wage” laws have been imposed. This should not be the least bit surprising. Making anything more expensive almost invariably leads to fewer purchases. That includes labor.

As imposed wage rates rise, so do job qualifications, so that less skilled or less experienced workers become “unemployable.” Think about it. Every one of us would be “unemployable” if our pay rates were raised high enough.

Attribution: Walter E Williams

Can’t Find a Job?… Join the Club

The True Unemployment Rate: 36%

By: John Hayward

How would you define “Unemployment?” Statistics on unemployment are bandied around in the media all the time. Changes in these statistics are hailed as good or bad news for the President, with varying degrees of emphasis from the news networks, depending on which party the President belongs to. But what do these statistics truly measure?

Would you define “unemployment” as measuring “people who want a job, but can’t get one?” This is, broadly speaking, the definition embraced by the Bureau of Labor Statistics. The trick to making those numbers dance lies in measuring “people who want a job.”

The widely reported U-3 unemployment metric, currently standing at 8.3 percent, is very aggressive in shaving off people who have not made recent efforts to find work. It is further distorted by massive “seasonal adjustments,” which made over a million people vanish into thin air last month.

This is why the official unemployment rate gets lower when the American workforce contracts. Workforce contraction is a very bad thing. People who simply cannot find work, and languish on unemployment insurance for years, are the last thing a prosperous country needs… but those people don’t count in the official unemployment rate.

For example, if everyone under the age of 25 abruptly stopped looking for work, it would be an economic disaster, but the official unemployment rate would go down, because the pool of people looking for work would get smaller.

(That’s not quite as far-fetched an example as it might sound, incidentally. Even the heavily-massaged U-3 unemployment rate currently sits at 23.2 percent for ages 16-19, and 13.3 percent for ages 20-24… and it’s about two percent higher for young men. Policies that increase the cost of labor, such as minimum-wage increases and mandated benefits, have a particularly punishing effect on young entry-level workers, since their labor has less intrinsic value than experienced older employees.)

This is precisely what has been happening under Barack Obama. The workforce is contracting with horrible speed, but it has the beneficial side effect of making the official unemployment rate go down a little, although 8.3 percent is still pathetic.

The Administration bounces happily before the cameras and announces its policies are “working,” and job creation is now “on the right track,” even as their best months post job creation only slightly in excess of population growth – and they’ve only had a few such months.

Pundits begin wondering if the old political rules that say re-election is impossible with unemployment over 6 or 7 percent might not apply to this President, if he can campaign on a slowly declining unemployment rate.

Another side effect of the way our unemployment statistics are prepared, and reported, comes when America’s employment picture is compared to the figures from other nations. Are the unemployment statistics reported from, say, Greece or Italy calculated in precisely the same manner as the American U-3 rate? If not, then how can we make valid comparisons between them?

Since the concept of people who aren’t looking for work is so fluid, and some of those people have clearly been persuaded not to look for work because of job-destroying government policies, it might be more logical to measure unemployment using the standard incorrectly offered by the Bureau of Labor Statistics for the U-3 rate: “total unemployed, as a percent of the civilian labor force.” That’s what the U-3 rate claims to measure, but it doesn’t, not by a long shot.

What is the current percentage of working-age Americans, eligible to participate in the civilian labor force, but not currently working? Answer: 36.3 percent.

That’s the worst labor participation rate in three decades, and it’s part of the worst employment picture we’ve seen since the Great Depression. Labor force participation is the number we should really be looking at, even more than the unemployment figures cooked up on the monthly basis by the Bureau of Labor Statistics.

Those figures have their uses as well, but it seems reasonable to measure the overall health of the economy by the number of people who simply are not participating in the labor force.

This would always be a much higher number than the BLS unemployment statistic, even when the economy was humming along at maximum power.

There are always going to be working-age people who drop out of the labor force, for reasons that have nothing to do with the nation’s overall economic health.

The labor force participation rate hasn’t exceeded 67 percent in the past decade, so we would be looking at a true “unemployment” number that bounces between roughly thirty and forty percent.

The difference between good and bad percentages is relatively small, which makes the true “unemployment” figure less sexy for news coverage, and therefore less useful to politicians… but it’s more logical to measure small changes in a large, accurate number than big changes in a small, largely fantastic number.

Writing at Red State, Rep. Jim Jordan (R-OH), who chairs the House Subcommittee on Regulatory Affairs, Stimulus Oversight, and Government Spending, offers an eye-popping chart measuring the effect of President Obama’s “stimulus” policies on workforce participation:

Jordan writes in support of the Jobs Through Growth Act, a package of dramatic reforms that includes a flat tax with two low rates, reduced corporate taxes, regulatory relief, and increased domestic energy production.  Those are the sort of changes America needs to make, if we want to do more than fiddle with imaginary unemployment numbers, whose very definition is subject to “adjustment” on a massive scale.  Those who define “unemployment” as “the number of working-age Americans who aren’t working” should waste no time on small reforms.