The April jobs report has been released by the US Department of Labor and it is not pretty. According to CCNMoney, a mere 38,000 jobs were created in the US, the lowest monthly rate in six years. To put this into perspective, in the past two years the monthly increased averaged about 200,000 new jobs and the number required just to keep up with new entrants into the job market is in excess of 200,000 monthly.
Commenting on the job’s number, Curt Long, chief economist at the National Association of Federal Credit Unions, correctly said, “It’s a pretty gloomy report, hard to find a silver lining in this one“. Contrast this realistic assessment with the Department of Labor’s unemployment number released indicating that the unemployment rate dropped to 4.7%, the lowest level in 9 years. How does the Labor Department come up with such rubbish? They merely stop counting those Americans who have given up the job search for lack of success. Now that’s banjo accounting!
There are many reasons behind the US economy’s poor performance with government being a major factor. Included in this list is the government’s willingness to create false reports to further its own political and bureaucratic agendas that often in conflict with those of the American people.
Discussions relating to raising the minimum wage inevitably include to the issue of “fairness”. Those in favor of raising it point out that the minimum wage is not a “fair wage”. Once this emotional claim is made, those who oppose increasing in the minimum wage are pegged as unenlightened and against allowing the lowest wage earners the opportunity to make a reasonable living. Economic realities tell a different story.
Wendy’s is a large fast food chain with approximately 6,000 restaurants nationwide. They have historically started employees at the minimum wage. They recently announced steps to offset the cost increase due to the increased minimum wage and it is not good for workers.
According to Investors Business Daily, Wendy’s is replacing many of its order takers with an automatic kiosk system. This action should surprise no one with a basic understanding of economics. Not only does the new minimum wage increase the cost the labor, but with government inflicted artificially low interest rates, the cost of capital has decreased. This decreases the cost of capital equipment at the same time the new minimum wage will increase the cost the labor. Wendy’s response to the increased minimum wage will be duplicated by many in the service industry across the Country.
The political elitists who are behind the increased minimum wage will not be negatively impacted by the coming loss of lower paid jobs in America. Their political positions could even improve with the additional votes they likely will receive from those who believe the increased minimum wage helps the working poor. Further, with more Americans being unemployed these same political elitists can then offer handouts in exchange for future votes. It’s a nice, but unholy, gig if you can get it.
There is another group of crony capitalists who will benefit from the increased minimum wage. Large corporations who do not employee lower paid American workers will benefit by the increased wage pressures placed on upstart competitors who might try to make a better mousetrap.