Dan Gilmore / February 9, 2016

Surprise! Democrat Wage-Growth Plan Not Working

You can’t legislate human action and say the economy is working.

The economy needs to start raising wages if Barack Obama’s near decade-long recovery is ever going to be felt by hard-working Americans. Under a hands-off approach to managing the economy, the boost in paychecks would be a tricky thing to manage, if it could be done at all. Basically, the American workers would have to make it so that they were worth more per hour. The Left has a shortcut: Why not legislate employers pay people more through raising the minimum wage? $10! $15! How much do the people want? Obama illustrated this thinking at a press conference last week when he said the economy was doing well because more people were signed up for health insurance — something the government requires people to have. For the Left, economics is less about understanding human behavior and motivation and more about telling people what to do.

Last year, this grand experiment in minimum wage hikes was played out through some of the nation’s largest cities. Investor’s Business Daily reported the result: “Wherever cities implemented big minimum-wage hikes to $10 an hour or more last year, the latest data through December show that job creation downshifted to the slowest pace in at least five years.” For example, in the District of Columbia, job gains in the leisure and hospitality sectors climbed a steady 3% in 2014. But when 2015 and its minimum wage hike hit, that growth ground down to zero.

The net effect is a diminished number of entry-level jobs for young and low-income workers, setting a higher bar in order to reach financial stability. The result of mandatory minimum wages is that the poor become poorer and the rich become richer — the results when government thinks it can legislate a shortcut.

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