The Democratic Agenda (Part 1 of 4)

House speaker Nancy Pelosi, Democrat of California, says the minimum wage increase passed by Congress on May 25, 2007 as a part of the Iraq spending bill, was long overdue. The bill will increase the minimum wage to $7.25 per hour from $5.15 per hour.

In a New York Times article Pelosi said that, “After 10 years of indifference we are raising wages for the hardest working Americans.” However, a hike in minimum wages likely means unemployment. Employers who would normally hire 5 employees at the current minimum would only be able to hire 4 under the new wages. This will truly be hurtful to small business owners and in turn the economy as a whole. According to a Washington Post article written in June 2006, “The Senate has rejected 11 attempts to raise the minimum wage since 1998, according to a legislative history compiled by Democrats.” After Republicans vowed they would not have another vote on the issue in 2006 the Democrats took a majority in 2007 and have now seemingly won a victory despite the negative long-term consequences. Alex Adrianson of the Heritage Foundation says, “Raising the minimum wage increases the prices of goods produced by minimum wage workers. Consumers’ respond by buying less, and employers respond by making less, which means fewer jobs. Employers also respond to relatively more expensive labor by investing in labor-saving technology, which again means fewer jobs.” And in addition The National Center for Public Policy Research says the minimum wage also tends to “price out” low wage workers, as well as, workers who have less skills and small amounts of education. Tax breaks for small-businesses would be necessary for such an increase in pay, and this tax break, according to the Washington Post in 2006, “would cost the Treasury up to $10 billion over the next 10 years,” and it could even be twice that number, but there was a lack of any substantial debate over the issue this time around because of its placement serving as a “deal sweetener” for Democrats to pass the Iraq spending bill that provides funding for the troops in Iraq and Afghanistan among other things. As a result the bill will be including about $4.84 billion in tax breaks for small business—not near enough to stop the rising unemployment that will likely ensue. Whatever the intentions of Democratic leaders the fact is this increase will further weaken the United States and cause US businesses to become more and more reliant on outsourcing to countries such as China. Outsourcing—a trend that in this new age of Globalization is not only common, but is in fact giving other countries a manner of leverage over the US—will only be encouraged if the benefits of working in the Homeland are less in comparison. In addition to the minimum wage increase the democrats had attempted to include $660 million to stockpile medicine for a flu pandemic, and $400 million for energy assistance to low-income families, but were unsuccessful. However they did manage to include $6.3 billion more for the Hurricane Katrina region—the equivalent of throwing money on a fire—and $3 billion for aid in farm disasters. The domestic spending portion of the bill totaled $22 billion. A free people should make decisions such as these with extreme care because this is a pivotal moment in the history of America, requiring the proper leadership by individuals who can employ commonsense and courage rather than blatant disregard for rational thought, insubordination to the office of the President of the United States, and fear.