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Some Conservatives Blaming Minimum Wage Earners For Biggest Unemployment Increase In 22 Years

Some conservatives are now advancing what has to be the most absurd and worst possible explanation of the root causes for the huge unemployment up-tick that was the worst in 22 years. They are unbelievably actually blaming minimum wage earners of all people, and totally ignoring the huge hyperinflation in fuel prices that has completely destabilized the economy, creating unemployment as sales drop in retailers as a response to a huge shift in the economy towards buying power directed at affording gas and heating oil.

This is absolutely the very worst explanation I've ever heard for the sudden increase in unemployment related to the economic slowdown hitting the United States which is entirely related to the 40% price increase in oil since just Jan 1, 2008.

First of all, even the economic stimulus tax rebate checks program is based on the idea that if the consumer public has more money to spend, then it will filter all through the economy and eventually filter back to Washington. Even Senator Obama is proposing a $1,000 middle class tax cut to boost the economy back towards recovery.

And increases in the minimum wage also helps to increase consumer buying power, however the rapid hyperinflation in oil prices has taken many lower wage income earners out of the market economy who are now spending far less at neighborhood businesses and instead using the money to purchase gas or heating oil.

Too much of the economy is becoming centralized in the energy segment, which has rapidly taken capital for all other segments of the economy resulting in slower sales and hence job layoffs. I've owned enough businesses in my lifetime to have seen this cycle played out several times with recessions, however this oil based recession is an entirely a new variation on recessions.

This recession is characterized by hyperinflation in energy prices, a ripple effect of inflation in food and all other products that require truck transport. A gallon of diesel fuel is now at the $5 level in the United States, compared to Mexico where the government subsidizes the diesel to a $2 a gallon price. In fact, many world economies subsidize oil prices to create economic stability and growth, unlike the U.S.

China for example is experiencing some of the world's fastest economic growth while the American economy is rolling backwards. The government keeps price controls on oil, and instead offers a subsidy to the oil producers to help them cope with raw oil commodity price increases. In April, for example, CHINA PETROLEUM AND CHEMICAL CORPORATION received a $1 billion dollar ($7.1 billion yuan) government subsidy.

Better wages in the U.S. have nothing to do with big up-tick in unemployment. The huge inflation in oil prices in the United States diverting billions and billions of dollars from all other segments of the economy in lost consumer spending has everything to do with big jump in unemployment as slower sales in many businesses result in job layoffs creating a cycle of recession that only feeds on itself.

Conservatives like to oppose things like decent wages or government price controls. Fair enough. But the U.S. is now suffering a great economic slowdown due to this direction-less political philosophy that ignores the necessary reality of at least some government planning and direction of the economy in order to promote stability.

Like an ostrich with it's head stuck in the sand, some just can't seem to comprehend that part of the role of government is to help offer at least some management to the economy and prevent crisis situations. Even the average housewife manages her family budget or economy, unlike the government.

And further, pathetic conservative explanations blaming small minimum wage increases for increased unemployment will certainly play very poorly with most November voters, only driving millions towards voting for change of the White House and some in Congress. John McCain certainly won't win election if he advances such outrageous explanations. Lower wage earners are a victim of the huge hyperinflation in oil prices, not a cause of any unemployment uptick.


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Comments (14)

ke_future:

this is the first i have heard about the minimum wage arguement. while a higher minimum wage will have a negative impact to some businesses, and will indeed cause some people to lose jobs, i have serious doubts that it would cause such a large increase. based on some things i have been reading, a good chunk of the unemployment increase is a number of people getting back into the job market.

btw, technically, we are not in a recession as the US economy is still growing, albeit at an enemic pace. this is in response to your statement that the US economy is "rolling backwards"

you seem to be arguing for price controls, government subsidies, and wage controls. in my opinion these are bad things. not for any economic reason (tho there are economic arguments against) but for 2 reasone: it reduces freedom and it increases the scope and power of government.

you point to China in an approving way. you should also mention how the excessive government control and corruption has directly led to thousands of deaths in the recent earchquake and it's aftermath. there is indeed a downside to too much government control over anything.

James Morris:

Unemployment is a statistic. One person that wants to find a job is not a statistic...if one wants one job they will find it:

http://www.realmatch.com
http://www.monster.com
http://www.careerbuilder.com

You see?

Allen:

It shows that the "trickle down" BS the GOP spouts off about doesn't work. Free enterprise does work, but when the CEO's make millions, and the people making the money for them are given squat, what do you expect?

And the people who have exhausted their benefits, and still can't find a job, well; they are not counted as unemployed. Add about 8 to 10% to what they say the unemployed numbers are, you might be closer to the mark than the politicians claim.

JLawson:

"Some conservatives"?

Which ones? Where? Got a link?

Lee Ward:

Where? Here , for one.

Okay - the thrust of this post was that conservatives are blaming minimum wage earners for big unemployment increase?

Sorry - I don't see it at all in the link Lee provided... "Will the Democrats acknowledge the error and take the blame for hundreds of thousands of jobs lost to their economic meddling -- or will they try to shift the blame to the Bush administration for no good reason at all?"

Or could it be "The real story here is unemployment among entry-level workers to the employment system. In summer, teenagers and college students enter the marketplace looking for seasonal and part-time work. This accounts for the significant rise in job-seekers and the 0.4% increase in unemployment. Otherwise, an overall job loss of 49,000 jobs would account for a 0.04% increase in a market of 138 million workers.?

Doesn't seem to be blaming 'minimum wage earners' so much as accounting practices. And even then, only in passing.

No "Damn those minimum wage workers! If it weren't for them, we'd still be at 5%!"

Guess it's a matter of interpretation, but I question your spring-loaded reflexive judgements sometimes.

Lee Ward[TypeKey Profile Page]:

Kim Priestap proves you wrong, JLawson, as she proves Paul right.

Here's the title of Kim's post:

What accounts for the jump in the unemployment rate?

her first paragraph:

The Democrats meddling with the economy when they increased minimum wage last year, that's what. Unsurprisingly, the largest portion of the unemployment rate increase was due to the increase of 16 - 24 year olds entering the work force looking for work but not finding it. And what do these 16 - 24 year olds make? Get ready for it - minimum wage.

After her usual incessant whining about democrats, Priestap concludes the following after reading the post I linked to:

Ed Morrissey at Hot Air has analysis as well and has come to the same conclusion after analyzing the numbers the labor department issued yesterday.

And you read Morrisey's article and found it didn't support Priestap's position at all.

Interesting - I guess that proves Paul's thesis in this post correct. You agree with Paul that Priestap blames without good reason.

Or were you just reflexively disagreeing?

Normally I allow the conservatives over at Wizbang or any other conservative site to post any opinion that they want without offering a counter comment. But conservatives often seem something like cult members to me that believe in some extremely convoluted "cause-effect" theories to justify a personal life philosophy often based more on stingy values rather than true political values.

I found it very morally offensive to blame minimum wage earners who only earn as little as $2.13 an hour if they are tipped food service labor, and $5.85 an hour if they are nontipped labor for somehow creating their own unemployment problems in May 2008 almost a full year since their tiny July 24, 2007 federal minimum wage boost. Many renters are paying around $1,000 a month for a place to live. Gssoline is up a full 40% in price since just January 1,2008, groceries are going up in huge inflation, and the best that some conservatives can do is to look at the poorest and most struggling segment of society and somehow blame them. It's an outrage. Even conservative Pastor Rod Parsley who's a McCain supporter was a strong supporter of the 2007 minimum wage increase as an important moral issue for the nation.

The fact of the matter is that many minimum wage earners need to seek public assistance such as public health care programs, food stamps of HAP housing in order to financially survive, compared to much better compensated workers such as union workers.

Low wages are no guarantee that there will not be no unemployment. Even in the slavery and child labor days of the United States, many white male household heads could not find work, because it was being filled by free or very cheap labor. And anyone who earns very little has little economic means to become consumers and support the economy.

Some conservatives seem to be almost romancing about the days of cheap labor during the slavery or child labor days. But the state of so much poverty and exploitive abuse of humans during this time was disgusting. Social welfare programs were developed as a response to the horrible poverty created when former farmers were seperated from their land and made dependent on employers in the city for work during the American Industrial Revolution. Former farmers could no longer provide their own food or basic lifestyle needs once they were separated from their land and converted into a profit-producing commodity for the industrial class to exploit.

While the biggest current uptick in unemployment is certainly a cause-effect related to a severe slowdown of sales at many retailers, especially smaller businesses, with sky-high oil prices taking away sales, the nation has never had a full employment economy because the business community profits by using the threat of unemployment to lower wage earners to keep wages down. Interesting, since the days of the Industrial Revolution, workers have been characterized as either "employed" or "unemployed", meaning that their labor is either owned by an employer or not. This is only the latest version of the historic slave-slave owner classification status for world civilization.

Workers can only escape this trap if they become self-employed or business owners themselves, otherwise they find themselves dependent on others for employment. Outside of this, getting a highly paid skilled labor job such as a union job is one of the few means of upward mobility for the working class.

JLawson:

Okay - the way I read your title - "Some Conservatives Blaming Minimum Wage Earners For Biggest Unemployment Increase In 22 Years" - is you're saying some conservatives are blaming the minimum wage earners.

I'm not seeing that. Sorry. Instead, I'm seeing government policies, IE increased minimum wages, as being at fault... not the earners.

AJ:

Wow, you guys are blind. Small businesses, especially, cannot afford to keep up with the increases in minimum wage. Thus, they have to cut back on workers in order to legally pay others. Whether you whackjobs want o believe it or not, the increase in minimum wage DOES effect unemployment. The 1974 and 1990 recessions coincided with large minimum wage increases. This stuff is fact. Sorry it doesn't agree with liberal fantasy land where everyone has a job that pays $20 an hour.

McBush:

You liberal/progressives are a hoot. Republicans are not blaming the unemployed, they are blaming the stupid minimum wage feel good change the Dems made.

If I have to pay $7 an hour or more to unskilled labor then I either have to A. Hire less, or B. Charge more for their products.

sandy:

DUMB DA DUMB, iT'S A PLOT, A PLAN, A VERY WELL LAID OUT PLAN. DESTROY THE MIDDLE CLASS AND WE THE POWERS THAT BE, CAN DO ANYTHING WE WANT TO THE GOOD OLD APATHIC AMERICANS. FUCK THE GOVERNMENT!!!!!!!!!!

Lee Ward[TypeKey Profile Page]:

Turn it down a notch, Sandy.

Passionate and outspoken = good.

Screaming and profane = less good.

Wow, Lee, I certainly managed to "push a few buttons" on both sides of the minimum wage issue when I posted this. So good to see the decent foot traffic to Wizbang Blue as well as the spirited debate. Thanks to all who chimed in so far on this important issue debate.

However, I'm still perplexed how restaurants which only pay $2.13 an hour to tipped labor and charge $15-25, are a major source of job layoffs. How low of labor costs versus expenses can you possibly get? Free volunteer labor? A return to slavery? Of course lower sales due to the oil based recession do account for less restaurant patrons, and hence a need for less workers. But the fact of the matter is no matter how low wages are, some businesses will seek the cheapest possible and least professional workforce, while better businesses will pay more for labor and seek a highly professional workforce and a top notch business with top quality products. Some businesses are just higher quality than others, while the worst businesses will always complain about labor costs.


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Publisher: Kevin Aylward

Editors: Lee Ward, Larkin, Paul S Hooson, and Steve Crickmore

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