Obama’s minimum wage hike could kill 1 million jobs

No matter how many times President Obama says we’re in a recovery, we just don’t have a lot to make us really feel like we’re rebounding from the world economy since the Great Depression.  Recent unemployment numbers were less than expected, with a staggering number of Americans who just pulled themselves out of the job market entirely.  It just doesn’t feel like an economy on the rebound, does it.

In a down economy, combating poverty always seems to become a priority.  President Obama’s answer seems to be not just extending unemployment benefits — a measure that Republicans don’t actually oppose, they just want to identify cuts to pay for the extension — but also raising the minimum wage.

Of course, that’s not a problem if you don’t mind killing around 1 million jobs in the process:

The Obama administration’s proposal to raise the minimum wage to $10.10 an hour could result in as many 1,084,000 jobs eliminated from the work force, according to a new study conducted by the Employment Policies Institute (EPI)

“No amount of denial by the president and his political allies — and no number of ‘studies’ published by biased researchers — can change the fact that minimum wage hikes eliminate jobs for low-skill and entry-level employees. Non-partisan economists have agreed on this consensus for decades, and the laws of economics haven’t changed,” Michael Saltsman, research director at EPI, said in a statement.

Of course, even if these “biased researchers” are right and jobs aren’t actually destroyed, it’s not going to be all puppies and sunshine.

Employers will be staring down the barrel of a 40 percent increase in wages.  This follows new Obamacare regulations on healthcare that many are also trying to navigate through for full time workers, with full time defined as 30 hours per week.  While that only impacts businesses with 50 or more employees, that’s still an awful lot of minimum wage jobs that fall into that category.

This leaves employers with three options.  One is to lay people off.  President Obama, his fellow Democrats, and these so-called “biased researchers” all say that’s just not going to happen.  How they figure that is still beyond me, but whatever.  Let’s say for argument’s sake that they’re right.  Let’s say that massive layoffs don’t happen.

Option two is to raise prices to account for the new expenses.  Businesses don’t exist to create jobs.  Job creation is a side effect of what businesses do.  They exist to make money for their owners.  It sounds all greedy and stuff, but it is what it is.  No matter how much a business may spout platitudes about how they exist to service their customers, watch how quick a CEO is fired when the business just breaks even.

When you increase a businesses expenses, guess what happens?  They pass those expenses along to customers through price increases.  That means that $10 per hour that Democrats are wanting will buy, at best, just as much as their $7.25 will buy.  Um…oops?

The third possibility is a combination of the two.  If a business can’t lay off enough people to cover the increased expenses - someone has to do the work, after all - then they’ll lay off what they can while also increasing prices.  Of course, the newly unemployed will now find their unemployment buying even less, which puts them into a much, much worse situation.

The Senate is expected to vote on raising the minimum wage sometime in the near future, though it’s unclear how much support such a measure will find in the Republican-controlled House.

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