‘Yesterday Wall Street got a bit sideways with the unemployment numbers. The Left part of our country that implemented this government intervention (see Proper Role of Government) then blames the current sitting President with their newest slogan of “Failed Policies”. This is typical of the boy who cried wolf.

Typically we teach to hire the best employees you yourself must be the “employer of choice” Wall Street was stunned Friday when the U.S. jobless rate jumped to 5.5 from 5% in April. Why how did this happen? How did we lose all of these jobs so fast?.

1. It’’s the price of oil.
2. It’’s George Bush and his policies. .
3. It’’s the housing and credit crisis.4.Its the salmonella in tomatoes.
4. These are always the first reasons we hear.
5. The minimum wage reality, hundreds of thousands of teenagers that were poured into the job market at the same time thanks to the end of the school year, but many, if not most, will not find jobs because they are now to expensive.

This comes from an article in Investors Business Daily. The minimum wage was hiked 14% to $5.85 an hour last July. Next month it’’s going to go up an additional 12% to $6.55 an hour. In July it’’s slated to rise 10.7% to $7.25 an hour. Now, if that sounds like a lot, the actual cost is much higher after you fold in taxes, benefits, and Social Security that businesses pay on behalf of these teenage workers.

Why can”t Wall Street figure this out, how about the Senators that passed the wage increase, why is the country surprised that unemployment is rising? Senate please I beg of you to blow the dust off of your college economics text books and read the section on supply and demand, in relation to the cost of supply.

When you raise the cost of anything, consumers demand less of it. Why doesn”t everyone understand that with gasoline? For instance, we know as the price of gasoline rises, people are going to change their habits. Businesses are going to change their habits. Airlines won”t be able to function the way they do. So the demand goes down and when the demand goes down, supply goes back up, then the price goes down. (Confused? so is congress) Demand goes down the higher you raise the price. So if you raise the minimum wage, demand for minimum wage workers will go down. The result = unemployment goes up

Surprised? Maybe to only those in congress. Since teenagers are the least educated, least trained, overall least productive of all workers, they are the least likely to be selected in the labor market. If you have to shell out an extra 40% over three years to employ the unproductive workers as is now happening, you are likely to find a good reason not to do so unless it’’s absolutely necessary. An economist from the University of California calculated that 10% minimum wage hike will cut employment of young and unskilled workers by 8.5%. He says in the last 11 months alone, the U.S. minimum wage has increased by more than twice that amount. So if we are expecting a 20% minimum wage hike, we can expect a 17% drop in employment in uneducated workers. It’’s crazy. Recent minimum wage hikes are the big reason teen joblessness is at the highest level it’’s been in 60 years. Could we have seen this coming? Yes as soon as it passed just ask the Senators that voted against the minimum wage increase. Besides anyone who had any experience in business at all, anyone? A day not in the classroom.

A day out in the real world. Could have predicted this. The next step lets increase the income tax rate, sound like a good idea you say? Ok that is a great idea. hey lets increase the unemployment benefit Great idea we have to help these unskilled teenagers. This will generate more taxable revenue to the Federal Government. Right? Wrong, the amount of actual taxes collected will decrease. Why you ask? Because we have fewer employed Americans, Congress pull out your history books now and review the amount of taxes collected after the tax decrease from President Bush. Thats right they increased.

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