Colorado Springs News, Sports & Business

Gazette Premium Content EDITORIAL: President acts like he's magic in another pandering lecture

The Gazette editorial Updated: January 30, 2014 at 8:30 am

If only it were true. In a utopia, we could elect a benevolent man to do nice things for us and solve big problems. He could order higher wages to help us buy food, shelter, clothing and fuel.

In his State of the Union address Tuesday, President Barack Obama promised to do just that. He announced plans for an administrative order that will force federal contractors to pay employees a minimum wage of $10.10, rather than $7.25.

If one man's magic wand can raise wages, why stop at $10.10? A minimum of $100 a hour would be far more kind. And if the magic wand can raise wages, it should just as easily lower prices.

The fact is, federal contractors pay what markets demand and not what politicians mandate. That's why most employees of federal contractors already earn $10.10 or more. Just ask the mainstream national media, which typically loathes to challenge Obama.

"Most employees of federal contractors already earn more than $10.10. About 10 percent of those workers, roughly 200,000, might be covered by the higher minimum wage," reported The Associated Press after Obama's speech.

Key phrase: "might be covered."

The raise by presidential fiat will not occur until 2015, at the earliest, and will not affect existing contracts.

Of course, the real cost of the mandate will come at the expense of young, low-skilled Americans who do not yet possess skills or experience needed to produce value at a rate of $10.10 an hour. Federal contractors cannot subsidize low-skilled workers simply because the president wants them to. As such, they will avoid hiring the people who would otherwise have worked for as little as $7.25 an hour. With low-skilled workers priced out of the market, high-skilled workers will be told to pick up the slack.

Obama also spoke of his desire to push for a minimum-wage increase in the private sector. The effects would be no different. He wants employers to pay no less than $9 an hour. This, of course, would only cause more employment stagnation.

People who cannot produce the equivalent of $9 an hour will not be hired. It's a simple fact that employers cannot afford to pay people more per hour than those individuals can produce per hour.

In another promise to help struggling Americans, Obama said he would eliminate red tape that ostensibly holds up highway and road projects that could create good jobs.

The AP wasn't buying it, saying highway projects "are actually stalled because there's no money for them."

There is no money for them because an overtaxed, overregulated economy cannot produce enough wealth to support the bloated federal bureaucracy. The economy can afford new federal transportation projects no more than it can pay fantasy wages pulled from thin air and promised by the president.

This country needs leadership that inspires Americans to innovate and work. Instead, it has leadership that promises the gift of a better life from a federal government that's wallowing in debt. The promises ring hollow.

In a perfect world, Obama could give us higher wages and even lower prices. In the real world, we need markets and a government that allows them to work.

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