Written by Allen West
President Obama once again displayed his adept skill at playing the “low hanging fruit” game of politics by formally signing an executive order raising the pay for employees of federal contract workers. Of course, he wants Congress to do the same for all Americans.
Never mind the fact that “all Americans” who actually earn the minimum wage amount to about 1.6 million workers. That’s it. Despite the fact he says that increasing the wage nationwide will “lift millions out of poverty immediately.”
But the second and third order effects of doing this will have widespread deleterious effects for businesses who employ hourly wage workers – and exacerbate unemployment.
I happened to have lunch today with a local business leader possessing a stellar economics background — as opposed to a community organizer. We discussed some basic economics, and did the math.
President Obama demands business owners with employees working on federal contracts must pay a minimum wage of $10.10. Now, if I’m an employee who has worked at one of those companies for a couple years already and have worked my way up to $10.10, but someone new comes on board immediately at the higher wage, I’d have a problem with it. I’d go to my boss and ask for a raise, since I have longer tenure. So maybe I get a raise to $13.00.
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