Simple-minded people like House Minority Leader Nancy Pelosi don’t understand the business world and toss out proposals based strictly on their wild-eyed Progressive philosophy; she doesn’t understand that job growth in the private sector is based on three key elements: revenue, cost of goods and cost of labor. Job growth can only be stimulated when revenue, i.e. the demands for a product or service, is greater than the cost of labor. The business world cannot prosper if for every dollar that comes in a dollar goes out in wages.
Thursday Ms. Pelosi called on Republican House leadership to take up legislation recently introduced by Rep. George Miller (D-CA) and Sen. Tom Harkin (D-IA) that would raise the federal minimum wage above $10 an hour. Miller and Harkin announced the bill, which would set the minimum wage at $10.10 per hour and index it to inflation so that it is raised automatically thereafter.
Pelosi cited recent stock gains that pushed markets to record highs even as worker incomes remain stagnant as her reason for backing the legislation.
“This week, we saw something quite remarkable, the stock market soaring to record heights. At the same time, we see productivity keeping pace,” Pelosi told reporters in the Capitol. “But we don’t see income for America’s middle class rising. In fact, it’s been about the same as since the end of the Clinton years.”
“If we are going to honor our commitment to the middle class,” she said, “we have to reflect that intention in our public policy.”
How does raising the minimum wage help the middle class? It doesn’t. In fact a raise in minimum wage would most likely not only harm the middle class by causing staff reductions at all levels but would benefit few on the lower income scale as employers reduce hours in an attempt to manage a massive 30 percent increase in labor costs.
Ms. Pelosi, as all of the far left-wing ideologues, believes that as corporate profits rise so must the wages of its workers. The Progressives believe that all income must be distributed among the people not based on contribution but by right; this philosophy might be great for twinkly-headed Liberals but leaves many out in the cold as it demands that business make do with fewer employees. The rate of job growth or contraction in the public sector is in direct proportion to the burden that the government places upon businesses; this isn’t a matter for debate, its historical fact.
Notwithstanding those pesky facts, Ms. Pelosi believes that amidst a fragile economy that is barely able to keep up with new entries into the job market while millions are dropping out altogether, we should redistribute some of the profits of not only the most profitable, but all businesses. Pelosi’s income redistribution plan puts a few shekels into the pockets of many low income workers while sending many more to the unemployment lines; businesses that are dependent upon low income workers but barely making ends meet will collapse costing hundreds of thousands of jobs.
Someone please tell Ms. Pelosi to stick with destroying the public health insurance market since she’s done such a bang-up job on that.
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