Another Obama job killer idea

Diana Furchtgott-Roth:
President Obama's executive order raising the minimum wage from $7.25 to $10.10 an hour covers employees of federal government contractors who work on federal projects, and applies to new contracts.

It would give some workers as much as a 39 percent raise. But others would lose jobs, since Congress is unlikely to increase contractors' funding because Obama has raised the minimum wage by executive order, skirting congressional authority.

In a fact sheet, the White House stated, “Low wages are also bad for business, as paying low wages lowers employee morale, encourages low productivity, and leads to frequent employee turnover--all of which impose costs."

Sign Up for the Politics Today newsletter!

Although he has little private-sector experience, the president thinks he knows best how to run a business.

Some unintended consequences: Under the new order, food service contractors operating federal cafeterias might lay off workers to keep costs even. Or, if firms kept all workers, they might cut costs in other ways, or raise prices of food.

The left-wing non-profit organization Demos has estimated that federal contractors employ 560,000 people making less than $12.00 an hour on government contracts. If 250,000 employees of government contractors made less than $10.10 an hour — say, an average of $8.10 — and each worked 2,000 hours per year, then when the minimum wage increase were fully phased in, each employee would cost the federal contractor another $4,000 annually. The cost to the federal contractors to raise wages for those 250,000 workers would be $1 billion a year.
The minimum wage should be repealed.  It is a job killer that is keeping low skilled workers from gain experience that would help them move up the ladder to better paying jobs.  It has contributed to the high teen unemployment rate especially among minorities.   It is just a really bad idea and in this case it is another unfunded mandate.


Popular posts from this blog

US, Britain and Israel help Iranian nuclear scientist escape

Iran loses another of its allies in Iraq

Texas Congressman Al Green admits to affair with drug using staffer