Friday, September 05, 2008

Aaaaargh, Increase in Unemployment Was UNEXPECTED!?!?!?!

Just this morning, I heard the talking heads screeching about the "unexpected" increase in unemployment at the end of July. That increase was only unexpected to morons. Lemme 'splain.

History or past performance is a good indicator of future results or future performance. What does that mean? Well, if you undertook an action fifty times in the past, and every single time you did that the same result occurred afterwards, that would tell you that those two indicators were probably tied together.

"You know, every single time that I go bobbing for french fries, I burn my face. What gives?"

"Uh, Homer, you keep dunking your head in a fry vat full of 350 degree grease. Understand?"

Such is the case with the increasing of minimum wage. Historically, EVERY SINGLE TIME that minimum wage is increased, unemployment rises and the economy stalls. Never has this NOT happened. This is because the people that make minimum wage are the most unskilled workers and easiest to replace or are mostly unneeded. They only make minimum wage because employers are FORCED to pay that much, those workers are not worth what they earn as employees.

This is also the reason for the desire to hire illegals. Since the employers are FORCED to pay their legal workers a fixed amount, the illegals come in and do the work for less. Usually much less because those illegals are "off-the-books." This is a move by employers to simply break even when FORCED to pay more to losers and high school students.

So, minimum wage laws INCREASE crime, too!

Not to pass judgment, but people who make minimum wage are generally not very smart and neither are illegal CRIMINAL aliens. Do you see the correlation there? You should.

The simplest thing to do to correct the economy and to rid us of all the illegals is to simply abolish the regulation of minimum wage. Morons would cough up their skulls, but that is simply because they are morons. May I show you how this economy thing works?

If someone must pay X for their lowest paid employees, then that cost or expense has to be figured into the cost of the item the business produces. Any fluctuation in that wage is passed on through pricing of said product. To give you a simplified model, let's assume that to manufacture one of the many graphics of the Obama campaign costs one US dollar in raw material, labor is 6.55 an hour currently, and the graphic takes one hour to make.

Material = 1.00
Labor = 6.55
Profit = 40% This also includes OVERHEAD
Total = 10.57

If you reduce the amount of FORCED costs for labor to two dollars per hour, that total price is only $4.20. However, the ONLY human being that is NOT affected by that total cost is the person that makes minimum wage. The actual cost of the item is reduced by over half, but the only person that receives the flat zero sum gain/loss is the lowest person on the wage totem, all other people continue to make the same money and enjoy a humongous boost in what their money is actually worth in goods and services.

Get it?

The reverse of this theorem is also true, when you INCREASE the FORCED labor costs of your least skilled workers, that causes the prices of the manufactured goods to increase, thereby making it more unlikely that this product will be purchased, so manufacturers and employers cut staff and increase workload to attempt the same output and the same costs of the items.

Instead of producing one graphic, the employers expect you to make two in one hour. This forces the employers to get rid of the slower workers, to try to keep the same level of profit pouring in.

But, there are other added problems to our economy. One is the increasing number of people that become unemployed, thereby exploding government assistance to those unemployed, and having to increase taxes on those fewer people that are still working. And the downward spiral continues.

If you want to point your gnarled finger at who exactly caused this never ending spiral and subsequently the fall in the wealth in the ENTIRE WORLD, you need look no further than the Democrat Congress. They instituted an increase in minimum wage that is a three year plan.

July 24, 2007, minimum wage increased from 5.25 an hour to 5.75 an hour. Unemployment jumped 0.2 percent, then July 24, 2008, minimum wage was raised from 5.75 an hour to 6.55 and unemployment jumped 0.3 percent, on July 24, 2009, minimum wage will be increased to a whopping 7.25 an hour, an increase of THIRTY-EIGHT PERCENT in two years!

If labor costs have increased by 38% in two years, what does that do to your income value? It reduces it by minimally 38% in two years, while the only people that receive, AT BEST, a zero sum gain are the dumbest people in the workforce.

To Democrats/morons, this is "caring" about working people. To me, it is destroying the economy of our country just to purchase the votes of morons.

Please take the time to comment.

There is at least one other person that believes as I do. HERE. Is it strange that he too is from Mississippi?