Obama Drops a Minimum Wage 'Stink Burger' On Michigan
Using catchy sound bites like "give America a raise," President Obama ignores volumes of research showing that his demand to increase the minimum wage will be a jobs killer.
Nevertheless, the president came to Michigan last week and campaigned for raising the cost of providing the jobs that millions of young people need to gain entry into the workforce, or that provide supplemental income for many families.
The nonpartisan Congressional Budget Office estimates that under the president's plan, 500,000 of these jobs would probably disappear, and possibly as many as 1 million.
Last month, more than 500 economists signed an open letter against the proposal, citing the job losses predicted by CBO and noting that "the minimum wage is also a poorly targeted anti-poverty measure."
Also in March, a survey of minimum wage employers found that about 54 percent would reduce hiring if the increase becomes law, and 38 percent would lay off employees.
But never mind those real world impacts on real people — pushing for a minimum wage increase is good politics.
Because there is little chance of the proposal passing in Congress, President Obama is taking his campaign on the road. From Washington to Michigan and in scores of other states, politicians and organized labor are salivating over the prospect of a noisy minimum wage debate this year.
Supporters hope for a two-for-one deal. They see the debate as a way to change the subject from the train wreck of Obamacare and to drive voter turnout on Election Day with an issue that energizes their base and polls well with both Democrats and Republicans.
In February, the New York Times reported that at their "annual winter meeting, the nation's labor leaders say that what they see as the best theme for reviving the union movement — American workers need a raise — also would be a winning issue for their Democratic allies in this fall's elections."
A key issue of the meeting was where labor would focus its political firepower during the 2014 election. The group decided on five states. Four of those states, including Michigan, are Midwest battleground states.
Likewise, Neil Sroka, communications director at the "Democracy for America" PAC, which was founded by former Democratic presidential candidate Howard Dean and a strategist for progressive groups, told the Washington Examiner in January, "It's a no-brainer for any Democrat... For politics and policy, it's a winning strategy."
Which brings us back to President Obama's visit to Ann Arbor. Partisanship was on full display during his speech at the University of Michigan. After thanking two local elected politicians, the president, playing to the mostly college aged audience, said If Republican budget priorities were a sandwich they would be called a "stink burger" or a "meanwich."
While in town, the president took a high-profile lunch break at Zingerman's Deli, whose owner is actively lobbying for a minimum wage increase. Zingerman's recently raised the pay of its entry level workers to $9 an hour, which the owner said he hopes will go up to $11 at the end of the next fiscal year.
Because it caters to a higher-end clientele, Zingerman's can afford to pay higher wages than most of its lunch trade competitors. According to The Detroit News, President Obama's share of a lunch for two with U.S. Senate Candidate Rep. Gary Peters, D-Bloomfield Township, came to "almost $23 before taxes — $13.99 for the [small] Reuben, $6.50 for the salad and $2.50 for the tea. If Peters made the same order, the total tab after taxes was about $50."
Paying $13.99 for a small sandwich for lunch is considered a luxury for most Americans. A boutique eatery like Zingerman's that can command such prices probably won't be put out by a government mandate to pay more for entry level help. That also applies to large retail enterprises like Costco.
But if a minimum wage increase drives up the cost of hiring entry level workers such as dishwashers and shelf stockers for smaller mom-and-pop job providers, these already-struggling small business owners will be forced to make some tough decisions, either laying off workers, reducing their hours or raising prices. The result could be fewer choices and higher living expenses for working- and low-income Americans who depend on more affordable alternatives.
That would be the real "stink burger" if the president gets his way, and it will land on the plates of the very people he says he wants to help. Obama talks about giving America a raise. Unfortunately, you can't get a raise if you don't have a job.
It's quite a "meanwich" to push an issue for political gain knowing full well it will take away the jobs of hundreds of thousands of Americans on the bottom rungs of the economic opportunity ladder.
F. Vincent Vernuccio is labor policy director at the Mackinac Center for Public Policy,
(Editor's note: A version of this column first appeared at rare.us.)
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.