Amerika Has Become Fat and Lazy

Economic problems find no solutions in artificial gimmicks like increasing the minimum wage.

by Bobby Casey, Managing Director

February 16, 2013

Increasing Minimum Wage and UnemploymentThose with absolutely nothing better to do, perhaps watched the Chief Executive Parasite, the Obamessiah, deliver the State of the Socialist Union address this past week.  (And to those who missed this pompous display of mass brainwashing and sleight of hand: good for you!)

It always surprises me to hear the new round of stupidity that spews from the mouths of politicians.  This week was no exception baring a proposal to raise the national minimum wage to $9 per hour.

Currently the national minimum wage sits at $7.25 per hour, and the national “measured” unemployment level is 7.6% — while the real number is closer to 15% (maybe more).  Worse still, people can receive unemployment benefits for up to 99 weeks. So, let’s think this through:  Unemployment is high.  Real unemployment is even higher.  The voter base…er….labor force has NO incentive to work for 99 weeks.  This mental giant wants to RAISE the minimum wage?

The irony is not initially very obvious to many, but once you see it, it’s undeniable.  Let’s dig a little deeper.  Take a look at the labor participation rate graph below taken directly from the Bureau of Labor Statistics:

Minimum Wage Up Labor Participation Down

See the trend?  Of course you do.  Ten years ago, the labor participation rate was about 67%.  Today it sits at about 63%.  Hmmm, we keep raising the minimum wage and increasing unemployment benefits while less and less people go to work.  Could there be a correlation?

As the minimum wage climbs, employers are forced to compensate for that mandated cost by doing one or all of the following:

  • Increase efficiency through technology and decrease workforce; or
  • Increase efficiency through having a leaner staff that produces at a rate warranting $9 per hour; or
  • Raise prices

Who do you think is more impacted by these changes: the family earning $400,000 per year, or the lower to middle class wage earners?  If you are the economically struggling consumer, higher prices will hurt your household’s bottom line.  If you don’t produce at a level warranting a $9 per hour wage, you have essentially been priced out of the market.  Basic economics tells us: if you raise the minimum wage the unemployment rate will join it.  It does not take an IQ of 135 to get that concept. The irony here is just glaringly delicious, as the major selling point of raising the minimum wage is, and always has been: to “help the working poor and middle class”.

Sadly, voters continue to elect parasites like the Obomber, who runs a campaign for the common man: vowing to never raise taxes, increase jobs, and improve quality of life for those hard-working, red-blooded middle-class American families.  He does this by promising things which sound really good when you are making the current minimum wage of $7.25 per hour.  He offers you an immediate 20% raise!  But did you read the fine print?  Oh yeah, that’s right.  The business owner you work for will either: 1. lay you off because you aren’t cost efficient enough to keep, or 2. raise prices whereby increasing your cost of living. When you earn $18,000 per year, a 10% increase in cost of living is devastating.  When you earn $400,000 per year, not as much.  Still, it makes you wonder if that person who once was spending that discretionary 10% on a maid or lawn service might reconsider doing it for themselves instead.  Or if that person might not get their kitchen redone after all?  Or if they won’t go out to eat as much?  How does that affect the low income worker who once relied on their consistent patronage?

If you really want to solve the unemployment problem: eliminate unemployment insurance and the minimum wage.  People would be propelled into the labor force. Sure, it would be tough for some at first.  Without receiving $450 per week for nearly two years while sitting on a couch watching Golden Girls reruns, some may have to take a job earning $6 per hour, or $240 per week.  Or that person might have to work two jobs to facilitate their $450 per week lifestyle.

Imagine the economic impact if the unemployment rate went to an effective 0%:  Companies could hire low to unskilled workers at $5-6 per hour.  Employees could get the necessary experience to allow them to shop around for work, improving their wage $.50 at a time.  The youth unemployment rate would go from the current 25% to effectively 0%.  Not to mention the cost savings garnered from eliminating unemployment insurance.  Unemployment insurance becomes your savings account.

It likewise follows that the cost of living will proportionally drop with the minimum wage.  So what once was a $7 bottle of shampoo drops to $3.  The formulations work both ways, the only difference is by artificially raising the price of labor, labor itself becomes cost prohibitive and unsustainable.  By removing those unnatural devices from the market, labor becomes not only sustainable but necessary!

Of course this is ‘pie-in-the-sky’ thinking.  It involves rationality and an intellectually honest desire to improve things.  It does not involve pining for votes and hoping for a handout.

We’ve reached a point in Amerika where the majority of the population are both morally and intellectually bankrupt. From the moral perspective, a growing number assume someone else – be it federal government, state government, insurance company, school, employer – is obliged to “take care of them”.

Listen up: a job, health insurance, education, housing, food – these are not rights owed to you by someone else.  Get off your a$$ and work for them.  You have no moral claim to your job.  It is not out of charity that you have a job.  It is out of a larger market need and demand.  (A need and demand, by the way, that can be squashed by overbearing costs in the market place, like a minimum wage).  There is no moral claim to health insurance.  It is a service provided privately as a hedge that you in fact will NOT get sick!  Education is all around you, and to that end you are entitled to what you take in.  But no one is responsible for sitting you down and explaining the ways of the world to you.  Housing and food are essentials, but accessible essentials anyone could acquire if the market were given its due freedom to operate. This growing trend that “it’s someone else’s responsibility” is just plain immoral.  It sickens me.

From the intellectual perspective, the majority of people are just too da*n lazy to learn the truth.  No one wants to give up American Idol, Desperate Housewives, or SportsCenter to take the time for researching important events and trends.  Perhaps the truth isn’t as entertaining, but it holds countless solutions to our economic woes.

In addition to immoral, Amerika has become fat and lazy.  It has regressed into a comfortable complacency where folks literally wait for their mental orders… nothing too strenuous of course… but they are content with the illusion of choice, they find solace in one day finding the “right” leader that will fix everything for them, and they seek relief from life’s hardships in another man’s wallet. It saddens me to see this.

I hope it can be salvaged, but honestly I’m not willing to give up the next 10, 20, 30 or 40 years of my life waiting to find out if the ship can be righted.  Ideologically, the country is busted with about 2 to 3 generations worth of time before the problems correct themselves.  I have neither the time nor the patience to wait it out. If you are happy fighting the good fight, more power to you.  But for the rest of us, freedom is found through internationalization.

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Comments

  1. China owns 60% of the US’s indudtrial machine.

  2. “We’ve reached a point in Amerika where the majority of the population are both morally and intellectually bankrupt.”

    I’d say that applies to an analysis that pretends to draw a conclusion about the correlation between minimum wage and the unemployment rate without actually comparing the two. Fat and lazy applies too.

  3. How on earth do they live on $7.25 an hour? My grand son (14 years old) works after school in a surf shop and he get paid $9.00 per hour.
    We are indeed the lucky country in Australia

    • Christiane,
      The point is not the hourly wage, only that the govt mandates it. There is no need for govt intervention in the labor markets. It only creates inefficiency and raises the unemployment rate. In a free market, the wage rate is determined by supply and demand.

    • I wonder how I survived in life with a starting wage of $1.25 hour. Raising the minimum wage to $9.00 hurts the young people just fresh out of school with no experience, big school debt to be paid off and a sub quality education as they will have to compete with the older grey haired people with more skills and a work experience education from years of work under their belt.

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