Obama Prepared To Push For Massive Minimum Wage Hike

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Michael Lotfi is a Persian, American political analyst and adviser living in Nashville, Tennessee where he works as the executive state director for the Tenth Amendment Center. Lotfi graduated in the top 5% of his class with top honors from Belmont University, an award winning, private university located in Nashville, Tennessee.
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President Obama has come out in strong support of a bill, which would raise the federal minimum wage to $10.10/hour. Why $10.10/hour instead of $10.11/hour- I am not sure. According to Fair Minimum Wage Act sponsors Representative Miller (D-CA) and Senator Harkin (D-IA), this is a “living wage”. Under the legislation tipped wage workers would also get a raise, which would equate to no less than 70% of the new federal minimum wage (expect to pay $15 for a hamburger).

According to White House officials, ”The President has long supported raising the minimum wage so hardworking Americans can have a decent wage for a day’s work to support their families and make ends meet, and he supports the Harkin/Miller bill that accomplishes this important goal.”

Miller’s congressional website says, “The federal minimum wage has lost more than 30 percent of its buying power since its peak in 1968…” So, it’s only rational to continue ignoring the actual problem, which is inflation, and raise the minimum wage.

Raising the minimum wage creates what economists refer to a “dead weight loss”. This dead weight loss occurs due to consumers (employers) leaving the market and decreasing demand for the product supplied (labor).

Different schools of economics rarely agree on anything. However, all schools at least acknowledged the fact that increasing minimum wage always (and I mean always) leads to higher unemployment.

In fact, raising the minimum wage actually hurts more lower socioeconomic citizens than it helps. There are many jobs outside of the market that are not touched by minimum wage laws. For example farming, construction, landscaping, etc. Think of “under the table” or “cash only” jobs.

Many suppliers of labor who have been forced out of the labor market due to government mandated price floors will seek employment in this secondary “under the table”, “cash only” market. This then floods the secondary market with an increased supply of labor, which in turn, drives down the price consumers in the secondary market have to pay for labor.

With Obamacare forcing many employers to push workers in the direction of part-time status, a minimum wage hike will only serve to cause havoc in the labor market, as well as the economy.


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16 comments for “Obama Prepared To Push For Massive Minimum Wage Hike

  1. January 31, 2015 at 2:13 pm

    Hi there to all, the contents existing at this web page are actually amazing for people experience,
    well, keep up the nice work fellows.

  2. jay
    November 11, 2013 at 5:03 am

    Raising minimum wage would probably hurt small business. I think making the large corporations that can afford to pay their employees more, instead of being greedy and hiring temporary workers and not offering health care.

  3. Dominic Bartnick
    November 10, 2013 at 6:21 pm

    Bad idea… Not that I have a problem with a working man making working wages.. Most of the time these food service jobs are filled with students that don’t need $10 an hour because they haven’t yet gotten themselves into the debt that we all seem to incur by the time we are 25 (most kids are already building up student loan debt, I know, we just need to make smart choices with only accepting the amounts we need to get through school). If you are good at your job, you will eventually make more money. All raising the minimum is going to do is make it so your employer cannot show you appreciation because they have to pay everyone the better wage. Economists are right here, we all know that, so why can we not stop the policy? By the way, stop personally attacking Obama, he is one of many bad politicians. I don’t agree with his policy but I feel the same about 95% of congress and no one seems to attack them.

  4. November 10, 2013 at 10:33 am

    I’m not against a minimum wage increase because many large businesses already benefit from an 8 dollar an hour minimum, because if enough employers will just pay 8, then they’re all safe and will get away with it, and will NEVER increase the pay for their workers, because being greedy and not paying people to work for you is what a lot of companies enjoy at the present moment. There’s still a large inequality of income in America, and any and all ridiculous socialist recommendations aside, this could help some people. No doubt there will be repercussions felt, but they may not be as major as people fear. We can’t just trust businesses and companies to do the right thing. Or else we get BP oil spills all day long. This is an interesting article and all the comments are good and informative too.

  5. November 10, 2013 at 8:23 am

    Washington State is what I intended to write. We have had a minimum wage for everyone, including restaurant workers for many years and none of the doom and gloom predictions have come true. In fact, we have no state income tax and out economy weathered the great recession better than most states. And most people still tip more than 15%.

  6. Pam
    November 10, 2013 at 6:37 am

    Raising minimum wage accomplishes NOTHING. When employers are forced to pay more they just add it on to the cost of their products. Where does that get us? The people that get paid more end up having to pay more for the products as well. DUH!!!!!!!!

  7. sebastian
    November 10, 2013 at 5:00 am

    Lets see… raise the minimum wage = raising taxes for the govt. Those cheeky bastards!

  8. gman68137
    November 10, 2013 at 3:37 am

    Get ready to kiss the next generation goodbye. There will be fewer entry-level jobs. Forget about teenagers getting summer job and get experience in the work place. Good intentions aside, this would be a bad move.

  9. Brandon
    November 10, 2013 at 1:45 am

    @ Brian, what state might this be in? I would love to hear about this imaginary state.

  10. November 10, 2013 at 12:33 am

    Well, maybe If It got tougher then maybe these po folks wound stand up for they’re country for a change Instead of plopping they’re ass In front of a TV with a beer In they’re hand and stop demanding hand outs, I have lived under the poverty line all my life and I live pretty good, A good place to start? throw your TV out the door.

  11. November 9, 2013 at 10:59 pm

    While I wholeheartedly agree that we are better off with minimum government regulations-and agree we need to shrink our federal govt-I do believe that most of the industries that this would affect-especially fast food restaurants-could well afford to raise the rates they pay their employees-which could offset those same employees need for government benefits perhaps? It’s been shown that McDonald’s and Walmart school their employees on the numerous government benefits that they are qualified for with the current pay rates we have in place!

  12. gerrie etter
    November 9, 2013 at 10:40 pm

    Inflation!! It will put everyone into a higher tax bracket, even though they can not purchase any more product then before the minimum wage raise. AND all the savings I scrimped to be able to save for my old age will be worth very little. grrrrr

  13. November 9, 2013 at 10:29 pm

    I make minimum wage and even i know that a massive surge in the hourly rate is bad for everybody. Businesses will need to charge more for their products and demand for those products will go down, lowering the bottom line and causing businesses to lay people off.

  14. kim
    November 9, 2013 at 9:50 pm

    Employers will lay off the slackers and the good employees will work twice as hard for the extra 2 bucks an hour. I say let the states decide based on the cost of living.

  15. Deborah Mauldin
    November 9, 2013 at 9:05 pm


  16. Brian
    November 9, 2013 at 8:54 pm

    state has had a $10 minimum wage including restaurant workers for years and our restaurant prices are still competitive with other states.

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