The news is full of
dire consequences if the sequester implementation is not averted.
The silliness in Washington DC has reached new heights. The fact is
the sequester is going to reduce current year federal government
spending by about $44 billion. Sounds like an enormous total. That
is until you realize the government is going to spend around $3.5
trillion dollars. The $44 billion is a little more than 1% of the
total spend and really gets lost in the rounding when it comes to
total government spending.
It seems the
politicians love to see themselves on television working hard to
avert the next crisis, even when one does not exist. Congress could
pass a bill the day after the sequester went into effect making it
have no effect. We need to card all the politicians in DC to make
sure they are all of appropriate age. You find more maturity at a
frat house on Friday night.
The Republicans are
running around talking about the debt. Cutting costs. We do need to
address the debt but if something else does not improve, all the
planning by both parties will come to naught
Let’s see,
what was that other thing that it seems no one in Washington likes to
talk about. Environment – no, China – no, Iran –
no, gun control – no. Oh yes, the economy. There are still 23
million people either unemployed, underemployed, or have given up
trying to find a job. And if you work in private industry there are
some very troubling signs.
Obamacare is
destroying full time job opportunities. More companies are going to
part time positions to avoid paying for mandatory health insurance.
The tax increases
imposed at the beginning of the year are starting to be felt.
Retailers are lowering their sales and earnings estimates for 2013
because they started to feel the tax increase effects in February.
Lower sales and earnings for companys means no growth in employment
and maybe some layoffs. With an economy that is barely growing, it
is easy to see the US slipping back into a recession.
If the economy does
start to shrink again or even just keeps going at its current pace,
we are in trouble. Most of the models on the debt assume that the
economy is going to recover and grow at 3 – 4%. No amount of
tax raising or cost cutting to going to fix our problems until the
economy finally comes back to normal levels of growth.
Reading the above it
seems that all is doom and gloom and it does seem like 2013 is going
to be a tough year. But given the above, it is really almost
incomprehensible that the President of the United States has
recommended that we increase our minimum wage from $7.25 to $9 per
hour. Really?
We have at least 23
million people in this country struggling with employment and the
President decides it is a good idea to increase the minimum wage
(known to decrease employment) by 24%. Really?
The raising of the
minimum wage will hit hardest teenagers trying to get their first
job. You know those teenagers, the ones that the unemployment rate
is currently at 23%. He wants to implement a policy that will
dramatically increase that percentage. Really?
How entirely
insensitive and uncaring can a person be?
In my articles, I
try to be fair to all points of view. I do think that there is a
place in society for having a minimum wage. I just wish that it
would be much more nuanced in its implementation and adjusted for
current economic conditions.
This minimum wage
policy recommendation is so ridiculous that it has no chance of
passing. These are hard times that require serious people. Making
this recommendation makes the President appear unserious and
completely out of touch with how many proud people are struggling
keep their families going in a stagnant economy.
So many of the
policies that have been implemented over the past four years have
been deleterious to employment. It is time each law, policy,
regulation, etc. to be scrutinized about its effect on employment.
All that hurt employment be discarded or put on hold. It is time we
start putting those hurting the most at the front of the priority
line.
Adam Smith is obviously not the actual name of the author of this column. The real author has
worked for two Fortune 500 companies, one privately held company, and a public accounting
firm. His undergraduate degree was in accounting, and he earned an MBA for his graduate
degree. He also has completed coursework for a PhD. in finance. He continues to be employed
by one of the Fortune 500 companies.
The author grew up in the Washington D.C. area but also lived for several years in Arizona. He
currently resides with his family on the East Coast.
The author has held various callings in The Church of Jesus Christ of Latter-day Saints.