During the 2008 campaign, Barack Obama repeatedly said the critical issue in selecting a President was not experience, but judgment. This is actually a point on which I agree with President Obama. Regrettably, the economic fiasco we find ourselves in today is ample proof that Mr. Obama’s resume was woefully-short in both categories.
Herman Cain, offers America a candidate who has demonstrated both experience and judgment. As a case in point, I’d like to return to 1995. At the time, President Clinton and his Labor Secretary Reich were touting the idea (an expression of the Nouveau Reich Economic Theory) that increasing the minimum wage from $4.25 to $5.15 an hour would attract workers back into the labor market who were simply unwilling to work at the $4.25 rate. (It seems never to have crossed the former President’s mind, why someone who could successfully command a higher wage for burger-flipping simply by refusing to work for $4.25 would not rather hold out for $6.00 and hour…or $10.00…or$20.00?) Mr. Cain, then-CEO and President of Godfather’s Pizza, opposed the wage hike for three basic reasons:
Increasing the minimum wage reduces entry-level job opportunities.
If you make it more expensive to hire someone, then employers are less-likely to do so. It seems obvious enough, but apparently it was a bit too complicated for our Rhodes Scholar president to grasp.
Increasing the minimum wage threatens existing jobs by putting marginally-profitable businesses at risk of closure.
How does it improve the life of a waitress at a struggling diner to have her federally-mandated wage increased by $.90 an hour when that increased cost forces her employer to close the diner permanently? Is she supposed to thank the federal government for rescuing her from the slave wage of $4.25 and hour, and securing her basic human right to $0.00 an hour?!
Increasing the minimum wage is an ineffective way to lift someone out of poverty.
Cain cited statistics indicating that most minimum wage workers are part-time by choice—either because they are students, or are working second or third-jobs. In other words, they aren’t looking to make their minimum wage jobs into careers. And argued that, in fact, the acquisition of job skills—for which the Left is fond of prescribing “job training centers”—via entry-level employment, even at lower wages, was far more effective.
As you may remember, Cain’s side lost and the minimum was increased…and increased again…and increased again. As of the time of this post, I have not yet found extensive analyses of the effects of the Clinton-Reich hikes, Stefan Karlsson noted in 2005:
[W]e can see now how the entire Clinton minimum wage increase in 1996-97 have been repealed through inflation. Between September 1996 (The last month when the old $4.25 minimum wage was in place)and February 2005, the consumer price index rose by 21.55% (191.8/157.8). This means that the current $5.15 minimum wage is $4.24 in September 1996-dollars. The minimum wage is thus lower in real terms now than it ever was before the Clinton increase. And of course, if the consumer price index underestimates inflation, which many of us [believe] it [does], then the current minimum wage is even lower in a historical perspective.It would seem that, in the end, Clinton led us to risk all of the possible dangers Cain warned about for—at best—temporary gains. In 2012, wouldn’t it be nice to vote for someone with the experience, character, and wisdom to consider the long-term consequences of his policies?