Tuesday, January 19, 2016

Obama's Next Bad Idea: Wage Insurance

By Tad Cronn

Just in case you thought there wasn’t a worse economic idea in the Democrats’ bag of tricks than raising the minimum wage to $15 an hour, President Obama has just found one.

The president’s proposal is looking to “reform” the federal unemployment insurance system by forcing all states to provide coverage for at least 26 weeks (nine states don’t). But the crown jewel in Obama’s plan is to force states to provide not just unemployment insurance but wage insurance.

The way this will work, according to the Associated Press, is if someone loses a decent paying job and goes out looking for work but can only find something that is less than they were making, up to $50,000 annually, then the state would have to make up half of the difference.

As it stands currently, the proposal would limit the coverage to $10,000 over two years. But we all know how government programs work. That $10,000 is just a starting point.

So if the Democrats get their druthers, not only will McDonald’s be paying a minimum wage of $15 per hour, but the states will be forced to kick in several thousand a year more, even if the person is not collecting unemployment.

From one angle, it sounds like an OK deal for someone who needs to pay his bills, but that money will essentially be coming out of thin air. The employees won’t actually be earning it, and it’s not being generated on the free market.

That means the only way to pay for this scheme is higher taxes all around, which means dragging everybody down with higher costs of goods and services, caused by your government.

Unlike raising the minimum wage, this doesn’t sound like it would cause a new wave of unemployment, but it might tend to encourage people who should be looking for higher-paying jobs or perhaps creating businesses to become content with lower-paying work.

Plus it’s for a limited time and amount, which is setting up a situation where some people likely will demand to be on the state payroll longer or for higher pay.

The most insidious thing about this proposal, however, is that it’s a sleight-of-hand way to promote the move toward a centrally planned economy. Once the state starts paying employees of allegedly private businesses, it’s just a hop, skip and a jump to state ownership of industry.

That’s the ultimate plan for the Democratic Party, of course, everyone under the state’s thumb with the political elites doing the squashing of anyone who stands up to them.

It’s been coming for years, with numerous Democrats barely concealing the fact of their socialist tendencies behind the “Progressive” label – a label that anyone familiar with the history of the 20th century should be leery of.

Their advances have been slow and steady, to the point that the founder of the Congressional Progressive Caucus, Bernie Sanders, is now comfortable with running for president as an open socialist.

The election and then re-election of Barack Obama were huge missteps for this country. If a Sanders or a Clinton wins the upcoming election, the spiral will only accelerate.

No comments:

Post a Comment