Boehner Says No To Minimum Wage Increase

Author: February 13, 2013 3:59 pm

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Almost as soon as President Obama proposed increase the minimum wage as Speaker of the House John Boehner had to stomp his feet and say no.

Speaking to reporters, he dismissed even the thought of raising the minimum wage, saying:

“I’ve been dealing with the minimum wage issue for the last 28 years that I’ve been in elected office. And when you raise the price of employment, guess what happens? You get less of it. At a time when Americans are still asking the question ‘Where are the jobs?’ why would we want to make it harder for small employers to hire people?”

This is actually not true. Contrary to popular claims, an increase in minimum wages increases consumption, which in turn increases business demand. This demand in turn increases hiring to enable the business to take advantage of the increased consumption.

Studied by both left-wing and right-wing think tanks actually cite the presidents proposed $9 per hour as too low, and encourage the rapid increase of the minimum wage to $12 per hour or more.


Of course, never one to miss an opportunity to take a position where he looks not only foolish, but ignorant, the speaker continued:

Listen, I’ve got 11 brothers and sisters on every rung of the economic ladder. I know about this issue as much as anybody in this town. And what happens when you take away the first couple of rungs on the economic ladder — you make it harder for people to get on the ladder. Our goal is to get people on the ladder and help them climb that ladder so they can live the American dream. And a lot of people who are being the paid minimum wage are being paid that because they come to the workforce with no skills. And this makes it harder for them to acquire the skills they need in order to climb that ladder successfully.

This is pandering to the popular Republican myth, that the minimum wage only effects the very young or new to the workforce. The problem is that the minimum wage effects far more than just those without skills. According to the Bureau of Labor Statistics, only half of workers earning minimum wage are under the age of 25. In addition, raising the minimum wage would in turn force up the wages just above the minimum wage, due to the added compensation opening up positions to workers who previously were locked into one position due to the slightly higher wage. They are not unskilled workers, many of them are highly trained service personnel. As anyone who has ever worked retail can tell you, a minimum wage job can be one of the most difficult, and most demanding of skill, out there.

Historical studies have found that an increase to the minimum wage increases the employment rate, due to the added demand by customers for goods and services. Speaker Boehner in his interview just made himself look foolish, as the minimum wage is at a record low. If the United States does not raise the minimum wage, far above the presidents modest increase, we will continue our slide into poverty. Already, poverty is at levels not seen since the Great Depression.

How it works is simple, people cannot spend money if they do not make money. People at the low end of the income pool are monetary aggregation systems, propelling money through the system. They do not typically have substantial savings, and live paycheck to paycheck. This means that a dollar paid them is in turn spent in local businesses, continuing the cycle. This is how you grow the economy. With this stance, Speaker Boehner is stating, simply, that he does not want to grow the United States economy, and is in fact rooting for continual slow growth and eventual collapse of the United States. In other words, John Boehner is still clueless about what it means to actually run a government.

But we all knew this.


Nate_Downes
Nathaniel Downes is the son of a former state representative of New Hampshire, now living in Seattle Washington.

Feel free to follow Nathaniel Downes on Facebook.

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