December 22, 2014

Obama raises minimum wage for federal contractors

Fox News reports on the first snowflake to swirl out from the polar vortex of executive orders that will soon descend upon the nation that sits where the American republic used to be:

Obama raises minimum wage for federal contractors

President Obama, in the first of potentially many executive actions tied to his State of the Union address, will unilaterally increase the minimum wage for workers under new federal contracts to $10.10 an hour, from $7.25, in an effort to build momentum for a minimum wage hike for all Americans.

The executive order, which had been pushed by progressive Democratic lawmakers, applies to all contractors performing services for the federal government and would affect more than 2 million employees, according to an administration official.

The president will then use Tuesday night’s address to press Congress to pass a Democratic plan to increase the overall federal wage to $10.10 over three years, then indexing it to inflation, while also raising the minimum wage for tipped workers, the official said.

Clearly the two greatest problems facing America are that not enough people work for the federal government, and federal employees don’t make enough money.  Are there really two million contractors pulling down the minimum wage, as the Administration claims?  Even Hillary Clinton’s chauffeurs must get paid a lot more than that!  Well, remember, this is the Obama Administration we’re talking about.  Facts are Silly Putty in their hands.

Before you start outfitting any safari expeditions to go searching for this invisible cohort of minimum wage federal employees – whose numbers would comprise nearly half of all federal contractors, if the Administration’s claims are taken seriously – remember that the executive order only affects new contracts.  Obama’s factoid dispensers could justify their claims by saying that over the next five, ten, twenty, or fifty years, there would have been two million minimum wage hires, so they’re not really “lying,” they’re just “assuming a historical context” that you forgot to assume when you thought they meant two million people would receive an immediate salary increase.

As Jim Geraghty at National Review notes, the extent of Obama’s executive order won’t be confined to the people who might have been hired for minimum wage by Uncle Sam in the coming years.  Some people with knowledge of the federal contracting process note they have never seen minimum wage employees specified, but the pay scale calculations much further up the line are influenced by the nominal minimum wage.

Obama’s executive order on behalf of federal contractors will surely add muscle to the Democrats’ push for a general minimum wage increase.  As noted above, he’ll describe his order in that context during the State of the Union address tonight, urging Congress to follow his lead and and hike the minimum wage for everyone.  This will, in turn, alter the pay scale calculations for private-sector union employees who make far more money already, because the federal minimum wage is a major factor in their salary formula.  ”And now you see why raising the minimum wage is such an intense priority for Democrats,” writes Greghty.  ”A higher minimum wage means higher wages for union workers, which means higher union dues, which gives unions more money to spend during campaign season.”

Don’t discount the appeal of higher unemployment due to higher minimum wages to socialist ideologues, either.  This is Nirvana for them – a perfect state of higher unemployment (which means greater dependence on government) combined with public animosity towards the private sector, which the Left would very much like to make smaller.  Nothing is better for them than a teeming horde of long-term unemployed who can be persuaded that greedy corporate executives who refuse to pay a fair wage are the reason for their distress, while benevolent Big Government stands ready to help them.  When you’ve got full employment, who needs the welfare state?  How is the Left supposed to cultivate seething resentment from a fully-employed populace that might not be inclined to hate the people who employ them?

Minimum wage increases almost always poll well, so even a narrowly tailored unilateral increase like Obama’s is not likely to generate reflexive opposition from the public.  They’re more likely to accept the argument that nobody can live on the existing minimum, especially in a bummer economy like the one Obama has crafted.  ”Good for you, federal contractors!” they will cry, followed soon after by “Hey, what about our minimum wages?”  Loudly declaring that you think everyone deserves to get paid more is never going to be a political loser, especially given the more complex task of explaining how such wage increases make unemployment even worse.  Simple slogan beats nuanced argument every day of the week.  If Obama was unilaterally increasing some chunk of private sector wages, there would be the danger of what amounted to a controlled experiment demonstrating how unemployment rose in the affected sector… but our money-no-object zillion-dollar federal government isn’t about to hire fewer people because they cost more, is it?

I would recommend against holding your breath waiting for President Obama to explain where the money to pay these higher federal wages will come from.  He’ll bide his time, then ride the tide of rising government costs to the doors of Congress, where he will don his moth-eaten “deficit hawk” costume and deliver a stern lecture on the urgent need to raise taxes in order to keep debt under control.  Executive orders that make government more expensive are stockpiled ammunition for the next tax-hike war, so you can expect to hear a lot of them tonight.

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