President’s Economic Plans Not Much Help for Struggling Young People

Posted by Tina

Young people are struggling to see light at the end of the tunnel in a stagnant economy with few jobs. The future doesn’t seem to hold anything but more lost opportunity and growing federal debt. The hope and change they cheered about in 2008 has faded like a bad dream. During the five years that President Obama has led the nation and set economic policy more Americans than ever are without work and falling into poverty. Income inequality that unfortunately remained static during the eight years of Bush has grown significantly since the recovery of 2009. In five years of Keynesian economic policy the rich continue to prosper, as they always will, while the middle class continues to shrink and the poor grow ever more hopeless. Young people, young unmarried women, minorities, and the poor are suffering greatly in the transformation years of Barack Obama:

For better or worse, a truism of American politics is that voters vote their pocketbooks. Yet according to a new report on median household incomes by Sentier Research, in 2012 millions of American voters apparently cast ballots contrary to their economic self-interest.

Each month the consultants at Sentier analyze the numbers from the Census Bureau’s Current Population Survey and estimate the trend in median annual household income adjusted for inflation. On Aug. 21, Sentier released “Household Income on the Fourth Anniversary of the Economic Recovery: June 2009 to June 2013.” The finding that grabbed headlines was that real median household income “has fallen by 4.4 percent since the ‘economic recovery’ began in June 2009.” In dollar terms, median household income fell to $52,098 from $54,478, a loss of $2,380.

What was largely overlooked, however, is that those who were most likely to vote for Barack Obama in 2012 were members of demographic groups most likely to have suffered the steepest income declines. Mr. Obama was re-elected with 51% of the vote. Five demographic groups were crucial to his victory: young voters, single women, those with only a high-school diploma or less, blacks and Hispanics. He cleaned up with 60% of the youth vote, 67% of single women, 93% of blacks, 71% of Hispanics, and 64% of those without a high-school diploma, according to exit polls.

Clearly many of these people do not understand the basics about how jobs are created, what makes an economy grow, or government policies that will offer them the best chance to improve their own economic situation.

The President has promised to make income inequality a top priority in the coming year. One of the changes he intends to institute is a rise in the minimum wage. Unfortunately this policy will only exacerbate what is already a devastating situation for the middle and lower class young. It will place more downward pressure on job creation and it will cause prices to rise making dollars worth less. This isn’t just partisan opinion. It has been demonstrated recently in the city of San Jose. Chris Roberts, San Francisco Examiner reports:

Think $4 toast is bad? Try $6 toast, with no one to serve it to you.

A survey on one major Bay Area city’s minimum-wage hike and its negative impact on businesses could be a warning sign for San Francisco leaders who are seeking to boost the nation’s already-highest minimum wage.

In San Jose, a 25 percent minimum-wage hike last year led to higher prices for consumers and fewer hours for workers at restaurants, according to a survey conducted by the Employment Policy Institute, a conservative Washington, D.C.-based think tank. …

…Out of the 163 South Bay restaurants surveyed, 108 — or two-thirds — raised prices after the $10 minimum wage took effect. Another 73 reduced workers’ hours, and 69 restaurants cut staff entirely.

These real life statistics should act as a wake up call for struggling young men and women. Young Americans need jobs and most of the time en entry level, minimum wage position will be the best hope for a start. The unemployment rate for this group is between 13% and 26% depending on how the disabled are factored in, according to the Department of Labor. The percentage is even higher for minorities. Low wage jobs were never intended to support a family with children. these jobs offer the new worker experience and an opportunity to learn good work habits and are very important not only for the person seeking employment, but for a society that suffers from youth idleness when opportunity is denied them. Unfortunately, the record of poor job opportunity for the young has created a crisis that will not be ameliorated with policies that result in fewer jobs.

President Obama has a choice. He can choose at this juncture to acknowledge the failure of his economic policies and make a shift. He need only to look to the past for ideas. A look back to a speech delivered in 1962 by John F. Kennedy reveal his mistakes and offer a change in policy that would work (emphasis mine):

…the most direct and significant kind of federal action aiding economic growth is to make possible an increase in private consumption and investment demand — to cut the fetters which hold back private spending. In the past, this could be done in part by the increased use of credit and monetary tools, but our balance of payments situation today places limits on our use of those tools for expansion. It could also be done by increasing federal expenditures more rapidly than necessary, but such a course would soon demoralize both the government and our economy. If government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency. And I shall say more on this in a moment.

The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system — and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.

Obama would be wise to also heed the words of former President Ronald Reagan to realize that it is not more and bigger government that sparks vibrancy and leads to expansion, growth, jobs, and increased wealth for everyone but the American people set free from government restraint and interference and able to pursue their wildest dreams:

“Government growing beyond our consent had become a lumbering giant, slamming shut the gates of opportunity, threatening to crush the very roots of our freedom,” Reagan said in his 1986 State of the Union speech. “What brought America back? The American people brought us back-with quiet courage and common sense, with undying faith that in this nation under God the future will be ours, for the future belongs to the free.”

Following the Carter years of malaise Ronald Reagan ushered in a period of unprecedented growth and opportunity by instating the same policies touted by John F. Kennedy…policies that emphasized lower taxes and restraint of government.

Unfortunately, President Obama has already signaled that politics is more important than the suffering of the young people of our country. He has already signaled that he will continue to micromanage the economy by picking winners and losers and through redistribution policy. That old saying about doing the same thing over and over and expecting a different result just doesn’t have the power to penetrate the politics of the hard core left.

President Obama is a radical progressive with a plan to fundamentally transform America. That has been his commitment from day one and it will continue to be his commitment. We have lived the result of these radical leftist policies and it has been very hard, especially on young people. Charming speeches about income inequality may distract and tug at the heart strings. It may lead to renewed feelings of hope and change. But it will not lead to good policies for economic growth or an abundance of job and wealth building opportunity for the young. The policies of Kennedy and Reagan would…young people should take to the streets and demand it!