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Affluent Christian Investor | October 24, 2017

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The Most Insidious Line In The State Of The Union Address?

President Barack Obama delivers his State of the Union address before a joint session of Congress on Tuesday, January 20, 2015. (Photo by Ricky Carioti/The Washington Post/Getty Images)

President Barack Obama delivers his State of the Union address before a joint session of Congress on Tuesday, January 20, 2015.
(Photo by Ricky Carioti/The Washington Post/Getty Images)

President Obama’s penultimate SOTU was notable for its audacity in demanding an even more expansive role for the federal government. Although trust in government has plummeted during his relentlessly statist administration, the president wants Americans to rally behind his belief that more federal mandates and spending will “turn the page” and make the country great.

I would like to single out one especially wrong-headed idea – that Congress should amend the Fair Labor Standards Act, requiring employers to pay many workers more.

Obama supports increasing the federal minimum wage to $10.10 per hour. In his speech, he argued for it this way: “And to everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full time and support a family on less than $15,000 a year, go try it. If not, vote to give millions of the hardest-working people in America a raise.”

There is much to be said against raising the minimum wage, or even having such a law at all.

No business has an unlimited fountain of money, so trade-offs are inevitable. If some workers must be paid more by political mandate, then firms will respond in ways that make others worse off. As George Mason University economics professor Donald Boudreaux wrote in an open letter to the president, “Because the policy you propose would price many workers out of jobs, that policy would indeed change these workers’ incomes: it would drop them to $0.”

The truth is that the minimum wage increase would cause many low-wage workers to lose their current jobs and have trouble ever finding another one. More people will never land their first job because they’re unable to produce enough value to earn the mandated wage.

Pretending that their supposedly compassionate programs have no adverse effects is a well-worn part of the political playbook. Barack Obama can look you straight in the eye and say that everyone gains from following him on the minimum wage, just as he asserted that passage of the “Affordable Care Act” would help millions and hurt nobody.

But what I want to focus on is the way Obama made his pitch: It’s hard to support a family on less than $15,000 per year, therefore politicians should give them a raise.

Those four words illuminate the appeal of minimum wage laws to “progressives.” They build support in the minds of voters for their true goal – getting them to think of the government as a source of free benefits.

In the days before the minimum wage, everyone understood that if you wanted a better standard of living, getting it was up to you.

If you worked for yourself (in agriculture, perhaps), improving your lot in life depended on finding more efficient ways of producing. If you worked for someone else, you could raise your skill level to make yourself more valuable, then bargain for a wage increase, or else take your labor elsewhere.

Americans knew that if they wanted more, earning it was their responsibility. Most accomplished that through industry and ingenuity.

The cancerous effect of minimum wage laws is to cause people to look instead to politics as a way of fulfilling their desires. Want a raise? Vote for the right politicians and they’ll give it to you.

With government in the “free stuff” business, campaigns start revolving around who can promise the most to the various groups clamoring for benefits. Rather than working and cooperating with others to solve their problems, people increasingly waste their energy on political wrangling.

Want free medical care? Vote for the right politicians and they will make sure you’ll be cared for.

Want guaranteed retirement income? Vote for the right politicians and they’ll mandate a program for that.

Want education or training for your children? Vote for the right politicians and they’ll create entitlements to serve you.

Progressives don’t want a society of independent, self-reliant, forward-thinking individuals. They want subservient people who look upward to government, beseeching the rulers for sustenance and favors. Minimum wage laws help engender that mindset.

Writing in Democracy in America, Alexis de Tocqueville foresaw the impact of Nanny State laws and regulations, which turn the people into “nothing but a flock of timid and industrious animals, with the government as its shepherd.”

Indeed so, except that many of the animals are no longer industrious.


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