To say that Democrats will have a difficult election cycle this year would be an understatement. Forget the fact that the majority of senators up for reelection are Democrats who represent red states and that House seats are pretty secure. Forget the fact that the president is losing favorability each month while the economy struggles to grow.
The reason why Democrats will undoubtedly face rough times ahead is the fact that their party seems to be embracing an anti-jobs agenda.
At first blush, this appears to be a ridiculous assertion. Why would a major political party advocate policies that hurt businesses? But when you realize that the policy points Democrats are advocating — a minimum-wage hike, opposition to the Keystone Pipeline and a continual support of Obamacare — this assertion becomes more credible and even more worrisome.
Start with the minimum-wage increase. Let me first make clear: I am not necessarily against a raise in the minimum wage. I think that increasing the wage to a reasonable rate in a healthy, booming economy may not be a bad idea.
But right now we do not live in such times. The economy is still slowly trudging along. No real big boost in economic growth is occurring. But left-wing politicians and talking heads believe that raising the minimum wage will be an economic cure-all. The fact of the matter is, this pay hike will no doubt lead to many worker layoffs.
Consider all of the mom-and-pop stores struggling to make ends meet. With the cost of labor rising, keeping more expensive employees with low profits does not make economic or rational sense.
Businesses have to factor in the cost of labor to their budgets. In many industries, the budgets and profit margins are very slim. With labor increasing, they have to change some aspect of their businesses to combat the cost difference. In some instances, some of the now more expensive employees would have to be let go.
Yes, the people who manage to stay in the workforce will have more money at their disposal. But an important question remains: Will they spend that money or save it?
Democrats say spend it, which would lead to more money entering into the marketplace and strengthen the economy. I think these workers will save it. Think about it: If you are working at a job that does not pay well, wouldn’t you be more likely to save what discretionary income you have until you really have to use it?
Also, keep in mind that 1.1 percent of Americans actually earn minimum wage and the majority of that percentage are young employees our age working at their first jobs. Guess which group the majority of layoffs will affect?
Consider next the Keystone Pipeline. Much to the chagrin of environmentalists, this project would create actual “shovel-ready” — to quote the president — jobs. Though there is some debate about the exact number, the reality is that jobs will be created, period. This work would have more net jobs than the proposed shovel-ready jobs the president promised — which, for the record, is zero.
The left-wing politicians standing in the way of this project only hurts the Americans looking to work on it.
And the last policy point — supporting the Affordable Care Act — is really no surprise. And though this topic is debated ad nauseam on cable TV and in the blogosphere, it is still a real problem for many Americans.
The latest concern entering into the political arena comes from the recent Congressional Budget Office study about Obamacare’s effects on having health care no longer tied to one’s job.
Many will no doubt leave their jobs because of this. Whether or not you believe this is a good provision, you have to realize this is a disincentive for people to work. The economy does not need a decrease in already bad workforce participation-rate numbers. Add this reality to the many other aspects of the Affordable Care Act and you have an economic mess.
For many Democrats this year, it’s going to be hard to defend that agenda. Some pundits and pollsters believe that many Democrats will lose their jobs in Congress because of it.
But the good news for the left is that at least all of the jobs in the executive branch are secure in 2014.
[Michael Beato is a UF economics sophomore. His columns appear on Wednesdays. A version of this column ran on page 7 on 2/19/2014 under the headline "Minimum-wage raise would be ineffective, increase layoffs"]
