Plunder and Deceit (15 page)

It is important to emphasize that most workers who are paid the minimum wage are young. Workers under age twenty-five compose approximately 20 percent of the total workforce, but they make up approximately half of those who earn the federal minimum wage.
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About 20 percent of employed teenagers earn the minimum wage, compared with 3 percent of workers over the age of twenty-five.
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Moreover, approximately 10 percent of part-time workers and approximately 2 percent of full-time workers earn the minimum wage.
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Even so, Obama, among others, creates the impression that those who earn the minimum wage are largely heads of households and sole providers for their families. The minimum wage is said to be a lifeline keeping millions off the breadlines. In a signing ceremony touting his executive order directing federal contractors to raise the minimum wage, Obama surrounded himself with older workers who earn the minimum wage when he made his announcement. He stated, “I've invited some of the folks who would see a raise if we raised the minimum wage. . . . And like most workers in their situation, they're not teenagers. . . . They're adults—average age is 35 years old.” He continued, “Many of them have children that they're supporting. These are Americans who work full-time, often to support a family, and if the minimum wage had kept pace with our economic productivity, they'd already be getting paid well over $10 an hour.”
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According to Obama, a failure of Congress to raise the minimum wage amounts to a consignment to poverty. “[T]he failure of Congress to act was the equivalent of a $200 pay cut. . . . That's a month worth of groceries, maybe two months' worth of electricity. It makes a big difference for a lot of families.”
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Of course, he utters not a word about the untold number of younger people who would lose their jobs or be priced out of the entry-level job market.

The effects of the imposition of a minimum wage on the economy have been evaluated by economists using different types of models. (The term “model” refers to a method for applying and analyzing given data.) First among these models is the basic competitive (or neoclassical) model, which demonstrates that when the government establishes a minimum wage above the market-driven wage, it increases a business's cost of production and induces two economy-wide effects.
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In their book
Minimum Wages
, University of California economics professor Dr. David Neumark and Federal Reserve policy expert William L. Wascher explain that “First, the price of the output rises and the demand for it falls, leading to a decline in production (the ‘scale effect').” Next, “the higher wage rate causes [businesses] to substitute capital for labor in the production process (the ‘substitution effect'). As a result, the demand for labor falls.”
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This negative demand for labor “applies unambiguously only to less-skilled workers whose wages are directly raised by the minimum wage.”
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In other words, under the basic competitive model, the cost of the output (whether it is hamburgers or candy at the drugstore) increases. And unskilled and low-skilled jobs are lost when the minimum wage is increased.

As should be clear by now, businesses make adjustments when the minimum wage is increased. Cato Institute scholar Mark Wilson explains that “all economists agree that businesses will make changes to adapt to the higher labor costs after a minimum wage increase.” “The higher costs will be passed on to someone in the long run; the only question is who.”
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Consider the case of SeaTac, a suburb of Seattle that increased its minimum wage for certain service industry employees to fifteen dollars per hour starting January 1, 2014. The
Seattle Times
reported in February 2014: “At the Clarion Hotel off International Boulevard, a sit-down restaurant has been shuttered, though it might be replaced by a less-labor-intensive café. . . . Other businesses have adjusted in ways that run the gamut from putting more work in the hands of managers, to instituting a small ‘living-wage surcharge' for a daily parking space near the airport.” Some businesses in SeaTac have cut benefits to their employees. When asked whether they appreciated the increase in the minimum wage, a hotel employee replied, “I lost my 401k, health insurance, paid holiday and vacation.” The hotel reportedly offered meals to its employees. Now the employees must bring their own food. The hotel has also cut overtime and the opportunity to earn overtime pay. A part-time waitress stated, “I've got $15 an hour, but all my tips are now much less.”
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Economists Neumark and Wascher evaluated decades of studies analyzing the efficacy of the minimum wage and the various models used to analyze their economic effects. They concluded that “Based on the evidence from our nearly two decades of research on minimum wages, coupled with the evidence accumulated from an impressive body of research conducted by others, we find it very difficult to see a good economic rationale for continuing to seek a higher minimum wage.”
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Numerous economic studies conducted over decades are “fairly unambiguous—minimum wages reduce employment of low skilled workers.” These “adverse effects [are] even more apparent when [the] research focuses on those directly affected by minimum wages.”
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Furthermore, wages for low-skilled jobs are dictated by supply and demand, not “the unconstrained wage offers of employers.”
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“[W]e are hard-pressed to imagine a compelling argument for a higher minimum wage when it neither helps low-income families nor reduces poverty.”
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Neumark and Wascher cite a study that found the average wage for day laborers in California—a job completely unregulated and requiring minimal skills—is more than eleven dollars per hour.
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In this case, the market and the laws of supply and demand increased hourly wages well above the current federal minimum wage.

A recent study by the Congressional Budget Office (CBO) underscores the findings of Neumark and Wascher. After examining the effects of raising the minimum wage, the CBO concludes that for those who keep their jobs, wages would obviously increase, however, “jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.”
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Indeed, increasing the minimum wage would “reduce total employment by 500,000 workers.” Moreover, most of the increased earnings of those who retain their jobs would not go to families below the poverty level because “many low-wage workers are not members of low-income families.” The CBO estimates that of the $31 billion in increased earnings, 19 percent would go to households below the poverty line while 29 percent would go to families “earning more than three times the poverty threshold.”
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It should now be obvious that the rising generation, particularly teenagers and young adults, is most adversely harmed by increases in the minimum wage, the consequences of which include pervasive unemployment and the lack of important job experience, affecting their future employment prospects and potential for success.

THE RISING GENERATION WILL
suffer the most egregious afflictions and casualties should the governing generation and public officials fail to competently and adequately carry out their national security, military, and foreign policy duties. However, too many younger people are inattentive to or nonplussed about—or in rancorous opposition to—the development and maintenance of such policies. The rising generation has a responsibility to itself and future generations to properly comprehend the nature of the multiple national security threats America confronts.

The United States faces very serious national security threats from numerous sources including Islamic terrorism, which is spreading rapidly throughout the world and seeks to establish “sleeper cells” within America's borders; Communist China's extensive military build-up and expansionist designs; and fascist Russia's intimidation and invasion of sovereign neighbors. Moreover, North Korea, led by an erratic and menacing dictator, continually threatens nuclear and conventional war against American allies in the region; and Iran is a terrorist regime hell-bent on acquiring nuclear weapons. In addition, there are unstable nations that hold poorly secured nuclear weapons and even stockpiles that are sought by other regimes. No group of citizens should be more focused and diligent about America's national security and military readiness and deterrence capabilities than the members of the rising generation, inasmuch as younger people fight the country's wars.

National security threats have evolved speedily and dramatically during the last few decades. Traditional threats are posed to interests on land, sea, and in air. Modern threats have expanded to space and cyberspace. These “global commons” must also be protected in order to preserve America's security and economic interests.

In the late 1980s, the Soviet Union posed the greatest threat to the United States.
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The Soviets amassed a powerful military, including nuclear weapon stocks. It had extensive international influence and an aggressive expansionist strategy.
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However, as a result of the military, foreign, and economic policies instituted by President Ronald Reagan, in December 1991 the Soviet Union collapsed and a new era ushered in a different set of national security challenges.
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Later, with the emergence of ex-KGB official and strongman Vladimir Putin as, effectively, Russia's dictator, Russia has followed a course of regional thuggery and military aggression, posing a renewed threat to the United States and its allies.

For example, in 2009, Russia effectively annexed the Georgian provinces of South Ossetia and Abkhazia.
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In 2014, Russia annexed Crimea, sponsored armed rebellion and a separatist movement in eastern Ukraine, and escalated tensions with North Atlantic Treaty Organization (NATO) member nations in the region.
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NATO now considers Russia its greatest threat.
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According to a European Leadership Network report, “[t]hese events form a highly disturbing picture of violations of national airspace, emergency scrambles, narrowly avoided mid-air collisions, close encounters at sea, and other dangerous actions happening on a regular basis over a very wide geographical area.”
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In addition to these incidents, Russia has initiated military brushes near both the Canadian and American borders.
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China has embarked on a vigorous military and economic program designed to spread its influence regionally and worldwide.
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From its bordering neighbors and the African continent to South and Central America, China is investing tens of billions of dollars in nation-building efforts obviously designed to increase its—and decrease American—influence.
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China is also the principal supporter of oppressive regimes in North Korea,
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Syria,
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and Venezuela.
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And China is among the countries that have provided Iran with vital assistance in the development of its nuclear program.
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Furthermore, China seeks superiority in the East and South China Seas, where 90 percent of all global trade transits. China is building islands in the South China Sea, from where it is claiming territorial rights in international waters.
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Defense and national security expert Tara Murphy notes that China is asserting exclusionary rights to waterways well beyond established international standards, which threatens to block trade access and could encourage other countries to institute similar polices.
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Since 1996, China has prioritized the development of a naval fleet that will rival the United States Navy.
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According to a United States Navy intelligence analysis, China's submarine capabilities have been greatly improved to the point where China is now able to launch long-range ballistic missiles that can reach America.
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Alarmingly, senior navy intelligence officer Jesse Korotkin has determined that China is well ahead of schedule in its goal of modernizing its navy by 2020.
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It has transitioned from a coastal defense navy to one capable of conducting multiple operations in nearly any part of the world.
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China's current capabilities have the potential to cripple United States military operations from Guam to Okinawa, which would have a debilitating effect on America's defenses in the event of armed conflict.
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The Islamic regime in Iran is developing capabilities to strike American forces in the Persian Gulf.
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More than 90 percent of Persian Gulf oil passes through the Strait of Hormuz, which borders Iran and is only twenty-one miles wide through its narrowest stretch.
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Iran has significant mine-laying capabilities that threaten commercial and military vessels.
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Iran also has a fleet of small but effective submarines, attack boats, and coastal missile batteries that can reach Israel.
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Moreover, the 2013 Worldwide Threat Assessment of the United States Intelligence Community, released on January 24, 2014, warns that “Tehran has made technical progress in a number of areas—including uranium enrichment, nuclear reactors, and ballistic missiles—from which it could draw if it decided to build missile-deliverable nuclear weapons. These technical advancements strengthen our assessment that Iran has the scientific, technical, and industrial capacity to eventually produce nuclear weapons.”
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Director of National Intelligence James R. Clapper's assessment also cautions that “Iran would choose a ballistic missile as its preferred method of delivering nuclear weapons. Iran's ballistic missiles are inherently capable of delivering WMD, and Iran already has the largest inventory of ballistic missiles in the Middle East. Iran's progress on space launched vehicles—along with its desire to deter the United States and its allies—provides Iran with the means and motivation to develop longer range missiles, including intercontinental ballistic missiles (ICBM).”
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