"One definition of insanity is doing something over and over again while expecting a different result" -- Albert Einstein (doubt exists as to whether this is actually his, although the expressed sentiment is correct.)
The left appears to be incapable of figuring this out -- or at least admitting it.
U.S. President Barack Obama is seeking to resurrect an idea that he set aside during his first term: Raise the minimum wage to help lift working families out of poverty. The proposal, which would take the minimum to $9 an hour from the current $7.25, is far from ideal. Still, it’s the right thing to do.
This has never worked and won't this time either.
Note what Bloomberg acknowledges:
Average hourly compensation has fallen in inflation- adjusted terms since the economy hit bottom in mid-2009, something that has never happened in any recovery on record, going back to 1947 (see chart). Pay has declined even as workers have boosted output per hour by about 6 percent.
Now analyze why.
From mid-2009 we have added $4.889 trillion in debt to the national ledger. This is not money that is being paid back -- that is simple pulled-forward demand -- it is pure monetary emission, most of which has been absorbed into The Fed's balance sheet.
It's also about 8% of aggregate GDP.
If output per-hour has increased 6%, and currency has been debased by 8%, then hourly compensation obviously would decline about 2% in real terms, and it has.
It's arithmetic, not voodoo folks.
Yet the same left argues for "stimulus", that is deficit spending, which is why inflation-adjusted hourly compensation is depressed in the first place.
Increasing the minimum wage is somewhat like cutting your leg off and then arguing that you should put on an artificial limb because you are now incapable of walking. The real problem began with your misuse of a saw for self-destructive reasons.
You can't solve this problem by hiking the minimum wage. Doing so is doomed to fail as this is nothing more or less than an attempt to pretend that you can shift the monetary cost of debasement from one part of the population to another through less-than-honest means.
But all taxes, whether direct and obvious or indirect as is the case here, are paid by people, not corporations. If you raise the minimum wage then the price of goods and services will rise in order to cover the additional expense. If the market supports those higher prices then the net impact of your raise of the minimum wage is zero, as the cost of living goes up in the same proportion!
If the market cannot support those higher prices then the result is that those individuals become former employees, and now their income is zero.
The solution to this problem is to stop debasing the currency and stop destroying purchasing power.
But that means a cessation of the lies, and that's politically "inconvenient."
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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