Young People Hammered by Minimum Wage

With Democrats cratering in the polls over their collapsing health care law, they are trying to pivot to the only part of their policy agenda that still enjoys broad public support: the minimum wage. But their advocacy and its popularity rest on the incorrect belief that a significant number of families live on the minimum wage. Instead, the primary impact would be to exacerbate a crisis of youth unemployment spurred largely by the last minimum wage increase.

A recent analysis by Ben Gitis of the American Action Forum found that just 1.9 percent of all wage and salary earners make the minimum wage or less. Just 0.3 percent of people in families with incomes below the poverty line make the minimum wage or less — and just 1.5 percent make less than $10.10, the level that Democrats have suggested for the next hike. Applying the most recent academic research, Gitis also found that such an increase would reduce employment by more than two million jobs.

Many of those jobs are the first work experience for teenagers and young adults. Gitis found 36.6 percent of minimum wage workers are teenagers. The liberal Center for Economic and Policy Research found that more than 60 percent of fast food workers — the heart of liberal advocacy efforts — are 24 or younger.

The minimum wage has already priced a scandalously large number of young Americans out of jobs, denying them crucial work experience and the first step on the ladder of economic opportunity. While unemployment for adults age 25 and over has now dropped to 6.2 percent, the teenage unemployment rate is still over 20 percent and the unemployment rate for workers 20 to 24 is 11.6 percent.

Since 1948, when the federal Bureau of Labor Statistics began tracking it, 20 percent teenage unemployment has been mostly unthinkable. It didn’t happen for a single month from 1948 until May of 1975, when the mark was reached for a brief fourth month stretch against the backdrop of an increasing minimum wage.

It happened again for just over two years from October 1981 to November 1983 (and briefly again for two months in 1985) — just after the 1977 minimum wage increase was fully phased in — a 45 percent jump from $2.30 to $3.35.

We saw 20 percent teen unemployment again for eight out of twelve months in 1992 following the 27 percent increase in the minimum wage that took effect in 1990 and 1991.

And we’ve been living with it now for by far the longest period in history: every single month since November 2008 — right in the middle of the three-step increase in the minimum wage that raised it more than 40 percent. That’s five full years. The peak of 27.1 percent teenage unemployment came in October 2009 — just two months after the last minimum wage spike took effect.

Unemployment among workers aged 20 to 24 has been above 10 percent even longer than teenage unemployment has been above 20. We have, in effect, an entire generation in which millions of people are reaching age 25 without significant work experience.

Why would we even consider raising the minimum wage again, right on the heels of the massive 40 percent hike that has wreaked such havoc on teenage and youth unemployment?

A better idea would be to reform and expand the existing Youth Minimum Wage Program, which allows teenagers to work for as little as $4.25 an hour, but for no more than 90 calendar days and with other restrictions. The restrictions should be eliminated and a second sub-minimum tier should be created for workers between age 20 and 24. Then future minimum wage hikes — if they prove irresistible politically — can at least be targeted to adults 25 and over.

Reid Goes Nuclear For Union Bosses

Reid 209x300 Reid Goes Nuclear for Union Bosses

In 2005, Senate Republicans floated the idea of altering Senate rules to eliminate the filibuster for judicial nominees. The proposal, dubbed the nuclear option, involved breaking Senate rules to change Senate rules. (The rules require a two-thirds vote for rules changes, but the nuclear option changes the rules by simple majority.) Democrats fought back against it furiously. Harry Reid led the fight, saying on the Senate floor: “I would never, ever consider breaking the rules to change the rules.” Well, adjust your clocks to “never.” Reid is now poised to execute the nuclear option.

Reid is willing to gut the filibuster at the behest of union bosses who want to keep the National Labor Relations Board (NLRB) stacked with corrupt union lawyers who will continue to rig the rules to make it easier to force workers into unions. Even worse, the specific NLRB nominees Reid wants to break Senate rules to approve were already illegally appointed by President Obama.

The same media that was howling when Republicans considered the nuclear option are tying themselves into knots to justify it now that Democrats are in control. Consider this astonishing deception from NBC News: “The NLRB nominations have been pending so long that President Obama used so-called recess appointments — appointing board members while the Senate was out of session — to allow the board to function.”

“Pending so long”? President Obama named his NLRB nominees on December 14, 2011 and installed them via putative recess appointment on January 4, 2012. That’s 21 days. Some of the days were, obviously, major holidays. The nominees never filled out questionnaires or even underwent background checks. They didn’t meet with any Senate Republicans, who nonetheless are blamed for obstructing them.

“While the Senate was out of session”? No. The Senate was in session; Senator Ben Cardin had gaveled in the new session of Congress just the day before.

D.C. Circuit Court Chief Judge David B. Sentelle wrote: “An interpretation of ‘the Recess’ that permits the President to decide when the Senate is in recess would demolish the checks and balances inherent in the advice-and-consent requirement, giving the President free rein to appoint his desired nominees at any time he pleases, whether that time be a weekend, lunch, or even when the Senate is in session and he is merely displeased with its inaction.”

The Supreme Court is almost certain to agree later this year.

You would think the Senate would, as an institution, recoil at the prospect of being effectively denied its constitutional prerogative of advice and consent. But for Senate Democrats, partisanship and dependence on union political muscle trump that concern.

Instead of nominating qualified members other than the ones he had already been rebuked in federal court for attempting to install illegally, Obama chose to renominate his illegal appointees and deliberately provoke confrontation. Reid is happily playing along, even to the point of nuclear escalation. Even though it means, as he described it as recently as 2008, the Senate as the Founders designed it would cease to exist.

All it takes to stop the nuclear option is five Democrats willing to stand up to Reid’s power grab. Just five willing to see past the next election to the certainty that someday Democrats will be back in the minority. Just five willing to consider that a Republican president may someday propose nominees they’d like to filibuster. Just five who want the Senate to remain the Senate.

It was once written: “There will come a time when we will all be done, and the institutions will either function well because we’ve taken care with them, or they will be in disarray and someone else’s problem to solve.” That’s from Harry Reid’s 2009 book. In the chapter on stopping the nuclear option.


© Copyright 2013 Phil Kerpen, distributed by Cagle Cartoons newspaper syndicate.

Mr. Kerpen is the president of American Commitment and the author of “Democracy Denied.” Kerpen can be reached at

This commentary was originally published at and is re-printed here with permission.

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Googling Obama’s Reelection

Google Sign SC Googling Obamas Reelection

President Obama’s reelection was a triumph of Big Data, technological innovation, and precision targeting over the usual gravity of an incumbent president with a record of economic failure. This was facilitated by largest data trove in the world, Google, lending talent, expertise, and quite possibly data to the cause. Now, Google CEO Eric Schmidt is being rumored as a potential Commerce Secretary or even Treasury Secretary — the top economic policy position — in Obama’s second term. That’s probably far-fetched, but the close relationship between the administration and Google deserves scrutiny.

Obama reportedly met Google CEO Eric Schmidt for the first time in a 2007 campaign event at Google’s headquarters. That was the event where Obama famously said: “I will take a backseat to no one in my commitment to Net Neutrality.” It was music to Schmidt’s ears because net neutrality regulations were the company’s top rent-seeking priority: a legal guarantee they could continue to consume a massive portion of consumer broadband capacity without being asked to pay for it.

The idea of regulating the Internet was basically dead on arrival in Congress, but Obama’s close friend Julius Genachowski jammed it through on dubious legal grounds on a 3-to-2 party-line vote at the Federal Communications Commission. The order is likely to be struck down in court next year.

Google’s top lobbyist, Andrew McLoughlin, was installed as the top tech policy staffer in the White House, where he proceeded to breach ethics rules by maintaining regular contact with his former Google colleagues and conducting his official business from a Gmail account. Ironically, his misconduct came to light because of one of Google’s many privacy failures, a bug that accidentally revealed private information on Google Buzz.

Schmidt also reportedly pressed the Obama campaign, through economic adviser Jason Furman, to make a major push into green jobs, a sidelight business of Google’s. We know how poorly that turned out, with new bankruptcies and scandals breaking every week or so.

There are other reasons to be wary of Google, which has largely built its business by expropriating other people’s property, monetizing it, and then settling if caught.

It was that way from the beginning, when Sergey Brin and Larry Page wrote: “advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers” — but then proceeded to pilfer patented search ad technology from GoTo. They eventually settled for over $300 million with Yahoo, which had acquired GoTo’s intellectual property.

It was that way when Google tried to scan millions of books without permission from authors and later tried to legitimize this grab after-the-fact by inking a licensing deal with publishers that would automatically sweep in authors. That deal was struck down in court.

It was that way when Google got caught red-handed facilitating the sale on counterfeit pharmaceuticals, not only facilitating the theft of intellectual property but also directly endangering safety by bringing potentially dangerous fake drugs into the country. Google forked over $500 million to the Department of Justice to settle the charges.

Yet the Obama administration embraced Google wholeheartedly, conducting the president’s first video address on YouTube, doing Google+ chats, and tailoring procurement requests towards Google’s cloud-based products.

Unsurprisingly, when the Obama team set out to take on the Herculean task of using data and technology to overcome the president’s economic record, they went to Google. According to BusinessWeek, Obama campaign manager Jim Messina looked to Schmidt as a mentor. Messina explained: “For three hours we sat in a conference room, and he just gave me advice about all the mistakes he’d made, about purchasing supply chains, about HR, about the blocking and tackling of growing fast and making sure you have organizational objectives.”

Schmidt’s role went beyond advice. He acted as a facilitator, connecting Messina with the top talent that became the campaign’s vaunted data team, and led a team of top Silicon valley executives who advised Messina on setting up the campaign’s data infrastructure. On election night, Schmidt was seen smiling in the room with Obama’s data team.

Now Schmidt, the CEO of a company with a record of ruthlessly expropriating what it wants, is in a position to be rewarded even more in Obama’s second term.

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Gas Prices Are Up Because Of Obama’s Offshore Ban

gas pump 1024x802 Gas Prices Are Up Because of Obamas Offshore Ban

In the Hofstra presidential debate, President Obama said: “when I took office, the price of gasoline was $1.80. Why is that? Because the economy was on the verge of collapse.” Wrong. Prices collapsed because we signaled to the world that we were finally moving forward with developing America’s massive offshore oil and gas resources — and they shot back up when Obama reimposed the offshore ban.

Obama’s ridiculous story that the doubling of gasoline prices under his watch is a result of economic recovery doesn’t fit the facts. According the National Bureau of Economic Research, responsible for officially designating when recessions start, the recession began in December of 2007. The average price for a gallon of gasoline that month, according the Energy Information Administration, was $3.02. The price rose for the next seven months with the country in recession. The price peaked in July of 2008 at $4.06 a gallon, more than half a year into recession, exacerbating economic pain and spurring the national protest movement that gave us “Drill Here, Drill Now” and “Drill, Baby, Drill.”

That July 2008 peak coincided with a critical policy change. On July 14, 2008, President Bush lifted the executive branch moratorium on offshore drilling that his father had put in place. That indicated a consolidation of support for offshore drilling that stalled the run-up in prices at the pump. In the next two months, the average price dropped more than thirty cents to $3.70.

Grassroots activists pressed even harder, demanding that Congress lift the remaining barrier to offshore drilling, the appropriations rider that had been in place since 1981. The pressure on Obama was so intense that he even reversed his opposition, claiming on August 1, 2008, that he would support offshore drilling under some circumstances.

Meanwhile, activists ratcheted up pressure on Congress and the White House, urging Congress to let the ban expire. Facing organized opposition in Congress, a Bush veto threat, and overwhelming public opinion in favor of drilling, Nancy Pelosi caved. After 27 years, the ban on offshore drilling was officially lifted on October 1, 2008.

With the moratorium lifted, markets anticipated future production of the estimated 19.1 billion barrels of oil (equal to 30 years of imports from Saudi Arabia) in the Outer Continental Shelf. Market psychology abruptly reversed, and the price at the pump dropped sharply.

It reached a low of $1.79 in January 2009, the month of Obama’s inauguration. That’s no coincidence.

The first order of business for Ken Salazar, Obama’s new secretary of the Interior, was to stop the pending opening of the former moratorium waters — supposedly temporarily. That announcement was made on February 10, 2009. By April, prices were back over two dollars. By June, when the recession officially ended, the price was $2.63 — up more than 80 cents from when Obama took office while the economy was still in recession.

Prices spiked up again starting in May of 2010, which is when Obama and Salazar imposed an illegal moratorium (literally; Salazar was held in contempt of court because the moratorium was based on a politically corrupted report) in the Gulf of Mexico as an overreaction to the BP spill.

By December of 2010, Obama had fully and permanently reimposed the old moratorium that Bush and Congress had lifted in 2008. So now we’re back where we were in summer of 2008, with prices around four dollars and vast offshore American energy resources locked up by politicians. The facts are clear — the pain at the pump is not, as Obama suggested, a result of a supposedly strong economy. It is a result of his own disastrous policy.

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Che And The EPA

Che Guevara SC Che and the EPA

On September 13, the U.S. Environmental Protection Agency (EPA) sent an internal email to its staff under the subject line “Hispanic Heritage Month.” The email, obtained by The Weekly Standard magazine, featured a picture of infamous communist butcher Che Guevara with the slogan “hasta la victoria siempre,” or “on to victory, always.”

Che has long been a hero of communists and other radicals for his brutal tactics, and the iconic photo of Che taken by Alberto Korda has shown up in inappropriate places before. But it is especially chilling to see Che’s image being used by a government agency that has pursued an astonishingly aggressive anti-growth and anti-property rights agenda.

The seeming ubiquity of Che’s image should not desensitize us to the depravity of the man. Alvaro Vargas Llosa explained the depths of Che’s evil a few years ago in the New Republic. He noted that Che wrote in “Message to the Tricontinental” in April 1967: “hatred as an element of struggle; unbending hatred for the enemy, which pushes a human being beyond his natural limitations, making him into an effective, violent, selective, and cold-blooded killing machine.”

In January 1957, Che murdered Eutimio Guerra, writing his diary: “I ended the problem with a .32 caliber pistol, in the right side of his brain…. His belongings were now mine.”

Most infamously, Fidel Castro put Che in charge of La Cabaña prison, where he summarily executed hundreds of men — over 500 according to U.S. State Department cables. According to Llosa, jazz musician Paquito D’Rivera wrote a letter criticizing the approving use of Che’s visage. D’Rivera wrote that one of Che’s prisoners “was my cousin Bebo, who was imprisoned there precisely for being a Christian. He recounts to me with infinite bitterness how he could hear from his cell in the early hours of dawn the executions, without trial or process of law, of the many who died shouting, ‘Long live Christ the King!’”

The EPA email said, apparently unaware of the irony: “Religion plays a significant role in the daily life of Hispanics with more than 90% of the population being Roman Catholic. Churches and spiritual activities influence family activities and families unite together to involve in prayers and sermons.”

So what could the EPA have meant by using a picture of the murderous Che with the slogan “on to victory, always”?

The EPA agenda is not literally murderous, but it is devastating to our economy. The agency’s regulations are crushing the coal industry and driving up the price of electricity. The agency’s corrupt shakedown of the auto industry will dramatically increase the price of all but the very smallest and lightest vehicles — putting them out of reach for the Americans who need them most.

The EPA’s infamous abuses of the Clean Water Act led to a recent unanimous Supreme Court case in Sackett, with even the Court’s liberals agreeing that the agency has no right to prohibit an Idaho couple from building a home on their property without even a right to appeal.

Former EPA administrator Al Armendariz resigned in disgraced after video surfaced of him explaining his philosophy of harassing oil and gas companies: “It’s kind of like how the Romans used to conquer little villages in the Mediterranean: they’d go into little Turkish towns somewhere, they’d find the first five guys they’d run into, and they’d crucify them and then, you know, that town was really easy to manage over the next few years.”

No wonder these guys idolize Che Guevara.

Fortunately, the U.S. House will soon vote on and pass H.R. 3409, which would block the most extreme elements of the EPA’s anti-growth agenda. But when the Senate refuses to act, the American people need to elect a Senate that will. And the American people need to elect a president who won’t hire bureaucrats who idolize Che Guevara.

Photo credit: BvdL (Creative Commons)

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