Source: http://sayanythingblog.com/readers/entry/unemployment_rate_jumps_press_neglects_to_inform_about_minimum_wage_and_ill/
June 7, 2008
I posted about the increase in the number of unemployed foreign born Hispanics earlier in the week before the new unemployment numbers came out. Gonna post this again:
The unemployment rate for Hispanic immigrants was 7.5 percent during the first months of this year, compared with 6.9 percent among native-born Hispanics. During the same period in 2007, the rates were 5.5 percent and 6.7 percent, respectively.
“The unemployment rate has shot up because of the slump in construction and Hispanic workers had done very well finding jobs in the construction industry as it was booming,” said Rakesh Kochhar, associate director for research. “Having become somewhat dependent on this industry, they were more vulnerable to the downturn.”
An overwhelming majority of jobs lost in the construction industry were held by foreign-born Hispanics.
It isn’t just construction job losses for illegals, it is teens and high school graduates losing jobs, or more appropriately, new teens and high school grads trying to enter the job market for the first time and there are less jobs present because of the new minimum wage hikes:
The real story here is unemployment among entry-level workers to the employment system. In summer, teenagers and college students enter the marketplace looking for seasonal and part-time work. This accounts for the significant rise in job-seekers and the 0.4% increase in unemployment. Otherwise, an overall job loss of 49,000 jobs would account for a 0.04% increase in a market of 138 million workers.
Why have these new job seekers found it difficult to get jobs? One reason is that Congress made jobs costlier just in time for this economic slowdown. Congress raised the minimum wage last year by seventy cents an hour, from $5.15 to $5.85. It will rise again in July to $6.55 an hour, and next year will hit $7.25 per hour. That makes entry-level labor as much as 27% more expensive this summer, when consumers have already slowed down their spending. The natural loss of work from the slowdown amplifies the effect of the minimum-wage increase, because businesses now cannot afford to raise prices to maintain their entry-level positions.
Couple things to point out if we are indeed in a recession:
1. You don’t want to raise the minimum wage. Just a bad idea. Raising the minimum wage causes businesses to raise their prices.
2. Considering how rapidly gas prices are rising, inflation is the last thing we need, especially inflated wages and raw materials.
3. Fuel prices are behind a lot of the issues and all this talk about “alternative fuels” and “investing in the future” is a bullshit way of saying “blocking any new domestic production” and “raising taxes on oil companies”.
4. Speaking of taxes on oil companies, “windfall profits taxes” sure are gonna help bring down gas prices.
5. Speaking of taxes, raising the capital gains tax and increasing taxes on “the rich” is gonna help too.
The Democrats’ plan for the economy goes like this:
1. Raise the minimum wage which has a ripple effect on union contracts that are indexed to it. In essence, raise wage costs for all businesses, which is worst for low wage service businesses because the minimum wage is felt much more at the low end.
2. Raise taxes on individuals and allow the tax cuts to expire.
3. Halt any future domestic oil production ensuring no new oil sources come online.
4. Raise taxes on oil companies which will no doubt be passed on to consumers.
Just as individuals are cutting back on discretionary expenses due to high oil prices, businesses are either cutting expenses or raising prices. They are cutting jobs to deal with the minimum wage. Add in new tax burdens on both income and capital gains and who the hell wants to invest in a new business. Where is the profit? And without profit motive, no economy works.
Policies matter and notice how all of this started when the Democrats took control and started with their economic agenda.
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