Obama’s demand that the be raised to $9 an hour triggered an avalanche of commentary on the issue, including this from the Associated Press:

President Barack says raising the to $9 an hour and tying future increases to inflation will boost the incomes of millions living in poverty and spur job growth by pouring more money into the economy.

It’s always good to ask this whenever we hear of a politician making such demands: “At whose expense?” Politicians have no money of their own (except what they have stolen, or been given in payoffs for supporting certain legislation, or from graft – see Jesse Jackson, Jr.), so any time they want to give something to someone who didn’t earn it, it has to come from someone else.

And who might that be?

First, it would be the employers who find themselves unable to do without people to whom he is already paying the minimum wage. If he can’t do without them, he’ll have to fork over to stay in business. That’s one supplier of money to help the politicians keep their promises.

But if the employer doesn’t need his lowest-paid employees then he’ll lay them off. So the very people politicians like wants to help, get hurt.

There are others who fund these promises. If wages are forced higher, that will be reflected in higher prices for whatever products and services are being sold that are being produced by peoples’ labor. So the consumer gets to pay more, and that’s another source of funding for the politicians’ promises.

Does anyone benefit here? How about the politician making the promises to move other peoples’ money around? Yup. That’s the game, right there.

The economic ignorance of this article is abysmal. Here’s part of it which explains how it’s supposed to work, but doesn’t:

Advocates say a increase can lead to even broader economic benefits.

“These are workers who are most likely to spend virtually everything they earn, so it just pumps money back into local economies,” said Christine Owens, executive director of the National Employment Law Project, a worker advocacy group.

That will trigger at small businesses in their communities, stimulating consumer demand and driving economic growth, Owens said.

This is pure drivel. This is the broken window fallacy. It’s what passes for truth these days.

 

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