So, why did the unemployment rate jump five points to 5.5% in last week's statistical releases? Well, as critics pointed out when the law was passed, increases in the minimum wage affect entry level workers hardest - and those who are hit hardest are those who are first coming out of school for their first jobs.
It's no coincidence that the jump coincides with school graduations and tens of thousands entering a workforce where entry level jobs are more costly to employers because of the onus of minimum wage increases. Watch for the unemployment rate to increase again next year in a similar fashion as the next phase of the minimum wage hike takes effect. Businesses have to look to the bottom line, so if they want to hire people, they might cut back the number of hirees because of the higher cost per employee.
Meanwhile, US consumers are modifying their behavior and cutting back on purchases of gas guzzling SUVs and/or looking at more efficient ways to get about the country. I've pointed out in the past that this is based on the current market distortions imposed by Congress and the states in their limitation on development of alternative energy resources, gas and oil exploration and drilling, and ethanol requirements.
Lastly, Congress is set to privatize the Senate's network of restaurant operations because Congress couldn't afford to keep it afloat. The Senate restaurants have lost tens of millions of dollars over the past several decades; they would have required another $250,000 to make payroll. (HT: Don Surber)
Clowns could run a restaurant better. Indeed, they do. The market has spoken, and yet there are some who still think that government health care would be better than the private sector?
No comments:
Post a Comment