jobs

Does This Mean Hillary’s Presidency Would Last Eight Seconds?

Via The Hill, here’s presumptive 2016 Democratic Party presidential nominee, former U.S. Senator, and former Secretary of State Hillary Rodham Clinton riffing on people who oppose the government’s many intrusions into private life, and on The Future of American Society™ (emphasis added):

“When people diss the government — we’re really dissing ourselves and dissing our democracy,” Clinton said. “This is my last rodeo, and I believe that we can leave not just the country in good shape for the future, but we can get a deep bench of young people to decide that they want to go into politics.”

America’s Ever-Expanding Regulatory Swamp

Maybe I’m biased because I mostly work on fiscal policy, but it certainly seems feasible to come up with rough estimates for the damage caused by onerous taxes and excessive spending.

On a personal level, for instance, we have a decent idea of how much the government takes from us and we know the aggravation of annual tax returns. And we tend to have some exposure to government bureaucracies, so we’re familiar with the concept of wasteful spending.

But how do you quantify the cost of regulation and red tape? Well, here are some very large numbers to digest.

Americans spend 8.8 billion hours every year filling out government forms.

The economy-wide cost of regulation is now $1.75 trillion.

For every bureaucrat at a regulatory agency, 100 jobs are destroyed in the economy’s productive sector.

The Obama Administration added $236 billion of red tape in 2012 alone.

In other words, the regulatory burden is enormous, but I worry that these numbers lack context and that most of us don’t really grasp how we’re hurt by government intervention.

So let’s look at some additional data.

States that raised their minimum wages have seen a huge loss in job growth since the beginning of the year

The thirteen states that saw minimum wage increases on January 1 have kept a combined 129,200 workers out of employment opportunities since the beginning of the year, according to data published this week by the American Action Forum.

The bulk of the minimum wage hikes were automatic inflation adjustments already mandated by state legislatures. Four state legislatures, however, took specific action to raise their minimum wages, the increases of which range from 45 cents to $1 per hour.

“While many assume that it would come out of profits of large companies, in reality it only affects restaurants and retail businesses that have narrow profit margins,” Ben Gitis, a policy analyst at the American Action Forum, explains in the study. “They have no choice but to either reduce their current employment levels or put off plans to expand and make new hires. As a result, the cost of the minimum wage comes out of the pockets of unemployed workers who are denied an opportunity to work.”

The study looks specifically the impact of these minimum wage increases in the restaurant and retail industries. States that raised their minimum wages have seen an anemic 0.6 percent net-job growth in these two industries since the beginning of the year, while states that kept their laws unchanged saw a 2 percent increase in net-job growth.

Gitis concedes that an unusually cold winter may have had an impact on overall job growth, but notes that states that raised their minimum wages “experienced relatively warm weather” than states in which wage laws remained unchanged. He also points out that other factors may have come into play.

That’s it?: Sequester spending cuts claimed only one federal job

The Budget Control Act of 2011 was one of the few decent pieces of legislation passed by Congress. The bipartisan measure did increase the statutory borrowing limit for the federal government, but it at least mandate $1.2 trillion in automatic cuts to the project rate of spending growth from 2012 to 2021.

That sounds like a lot of money, but the cuts were a fraction of total spending in the 10-year budget window. At best, the sequester was look at as a “good start,” not some sort of cureall for the nation’s fiscal woes.

President Barack Obama promised to veto any attempt to stop the cuts enacted through the Budget Control Act. House Speaker John Boehner (R-OH) hailed the sequester, calling the cuts “important for the fact that our economy needs to get going.”

Not long after the sequester was passed and signed into law, however, both White House and Republican leaders began complaining about the automatic cuts. President Obama reversed course and complained about the “meat-cleaver approach” to the budget deficit, claiming that the cuts “are not smart,” “not fair,” and “will add hundreds of thousands of Americans to the unemployment rolls.”

Obama set to use pen to control worker salaries

When President Obama started talking about getting around Congress with his phone and his pen, we all knew it was not going to end well. Increasing the minimum wage for government contractors hasn’t really had a chance to show any ill effects, so it makes sense that the president is already leaping into fair labor regulations, to start causing havoc in private industry.

The current cause is to force employers to pay overtime to salaried workers. There are already exemptions based on income that would possibly come into play, but they haven’t been adjusted for inflation on the Federal level since 2004. That said, there might be a valid argument to revisit those caps, but to force employers to pay overtime to salaried workers in general is not something any competent leader should consider in a soft job market.

Government increasing liabilities on businesses on a per employee basis is never a good idea when the economy needs private industry to be creating jobs. That is something that keeps getting lost in the shuffle for many reasons, but the two most obvious are the fact that the administration has changed the equations for determining the unemployment rate, and has reduced expectations for reasonable growth. What does that mean? It means that we don’t count people that have dropped out of the unemployment system into the welfare system, and the “new normal” is not really growth — it’s barely treading water.

CBO: Minimum wage hike would cost 500,000 jobs

An ever-increasing federal minimum wage is a statist panacea. Even Mitt Romney supported tying it to inflation in the 2012 campaign. But the CBO on Tuesday released its report scoring the proposals, and the numbers aren’t good.

If the minimum wage were raised on $10.10, as the Obama administration has proposed, somewhere between 500,000 and 1 million jobs could be lost over the next two years:

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects. As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million worker

Economists and politicians have debated for decades about the minimum wage’s effect on employment, but the non-partisan government calculator has spit out a decisively negative result, at least for employment.

cbo1

Adding more salt to the wound, the CBO finds that raising the minimum wage also won’t be the immediate fix for poverty that many thing it would:

The increased earnings for low-wage workers

Obama Uses Pen to Price Workers Out of the Market

President Obama made good on a threat…ah, promise…yesterday and, using that executive order pen he likes to talk about and wave around, raised the minimum wage for federal contractors from $7.25 to $10.10, representing a nearly 40% spike:

Mr. Obama said the federal minimum wage needs to be raised across the board because the current rate, due to inflation, “is worth about 20% less than it was when Ronald Reagan took office – 20% less, a fifth less.”

The move is the first step in a broader fight over the minimum wage being pushed by Democrats during an election year and part of the president’s effort to narrow the income inequality gap. (Our colleagues at the Real Time Economics blog take a look at who benefits from a higher minimum wage.)

Now, it’s just for federal contractors — with, to WSJ’s point, an eye toward a campaign issue — but it’s still not a very good sign because it’s likely a shallow move to gain political favor that sets a bad example for a couple of different reasons.

First, it’s yet another swipe at Congress who, as much as they are fairly maligned, are still the colleagues with whom our President must work. And quotes like this one are, frankly, rude and counter productive:

Nancy Pelosi predicted CBO’s terrible Obamacare report

On Tuesday, the Congressional Budget Office released its regular report scoring Obamacare’s impact on the budget and economic outlook over 10 years. It fails, of course. Big time. But at least Democrats saw it coming.

While arguing in support of the bill just after its passage in 2010, House Speaker at the time, Nancy Pelosi called Obamacare an “entrepreneurial bill”:

…a bill that says to someone, if you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care.

Nevermind that someone else will be subsidizing your funemployment. Not only was this loss of 2.5 million jobs over 10 years expected, it was celebrated by Pelosi (and presumably many other Democrats) as a good thing.

State of the Union Promises Millennials the Short End of the Stick

Contained within last night’s speech were many examples of how young people lose out in the big-government status quo.

It’s easy to lampoon the State of the Union address. A speech full of pomp and circumstance but relatively devoid of specifics is difficult to take seriously.

Few can see through the charade more clearly than younger generations. Marketers and ad execs know that traditional TV marketing techniques are ineffective with Millennials, so it’s obvious last night’s promises are liable to fall particularly flat with 20-somethings.

Young people today face a government that is more bloated, more invasive, and less efficient than ever. Tuesday night’s speech promised to continue this status quo.

The State of the Union was a study in contrasts and omitted information, and young people can see right through it. The President praised a low unemployment rate – leaving out the fact that the job-seeking numbers are low because many people have given up on finding work. He touted a reduced deficit – while praising the end of the Budget Control Act and sequester that led to the reduction.

Business groups tell EPA to leave fracking regulation to the states

Fracking

Radical environmentalists are urging the Environmental Protection Agency (EPA) to heavily regulate or ban hydraulic fracturing (also known as “fracking”), the process employed to extract shale oil and natural gas from underground sources, which could undermine a thriving part of the post-recession economy.

The fracking boom has been one of the success stories in an otherwise tepid American economy, which is still trying to recover five years after a deep recession. Just last month Bloomberg Businessweek covered a recent study by IHS CERA that showed the significant economic benefits of fracking.

“In 2012, the energy boom supported 2.1 million jobs, added almost $75 billion in federal and state revenues, contributed $283 billion to the gross domestic product and lifted household income by more than $1,200,” noted Bloomberg Businessweek. “The competitive advantage for U.S. manufacturers from lower fuel prices will raise industrial production by 3.5 percent by the end of the decade, said the report from CERA, which provides business advice for energy companies.”

The Wall Street Journal noted last week that the United States is “overtaking Russia as the world’s largest producer of oil and natural gas,” producing the “equivalent of about 22 million barrels a day of oil, natural gas and related fuels in July” compared to the 21.8 million barrels produced by our former Cold War foe.


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