Raising wages and benefits, and losing jobs …

It may come as a surprise to many, especially liberals in Washington like Obama and Biden, but businesses in America don’t work for the government. 

Liberal politicians and would-be socialists may be thrilled by government mandates that require businesses to pick up the tab for higher wages and employee costs.  That is, until smart businesses find alternatives to keep their costs in line.

And that’s precisely what has happened, and what’s going to happen. 

ObamaCare required employers above a certain size to provide benefits to employees working more than 30 hours a week.  Why not 40, which most consider a normal work week? 

Well, Obama and the liberals wanted to force employers to cover more people, so they deliberately set the threshold lower. Sneaky, huh? 

In a classic case of too-clever-by-half, it backfired. 

Employers cut the hours of their existing hourly employees to avoid providing healthcare or paying the penalty. Joe and Molly Sixpack went from making an okay living at 40 hours a week to making 25% less. To get the same amount of work done, employers hired more part-time employees and kept them below 30 hours. Nobody got benefits; the company paid no penalty. 

Big-city liberal politicians like raising the minimum wage because it makes low-income minimum-wage workers happy.  Seattle has done it.  San Francisco and other cities are following. 

What do you think is going to happen?  Let me enlighten you. 

McDonalds and other fast-food joints that employ a lot of minimum-wage people will employ fewer of them. In fact, some are experimenting with self-service kiosks for ordering to cut the number of workers required at each restaurant. And that’s just the beginning.  When it’s cheaper to use automation to prep and serve your Big Mac and fries than to pay some slacker in a paper hat with a bad attitude $15 an hour guess what fast-food operators will do. 

Years ago I had a summer job working for a relative who owned a small radio station outside Atlanta. On my first day he showed me an elaborate automated system he’d bought for his modern-country FM station.  It played preprogrammed music from a service called IGM and had slots to insert our recorded commercials and breakers. To the listening public, it sounded like live local broadcasting.

As he lovingly patted this machine he said what he loved the most about it was it never asked for a raise, never called in sick, and never took a day off.  He could focus on selling spots, making money, and running a business without all the employee hassles. 

Was he a monster? Nope. He was just trying to make a living and keep costs down. 

Listeners got a first-class product. Advertisers got their money’s worth. 

His AM station – run out of the same building – was completely live. But it was only on a sundown/sunrise license.  Not much labor required there. Three part-time DJs and me.  I think he operated that station more as a hobby than anything else and to fulfill the “community-service” requirement to maintain his licenses.

Just today I read that Obama has issued an order that requires businesses to pay overtime – at time and a half for every hour over 40 – to regular full-time workers making up to $47,500 a year. Liberals are gushing over this as a way to overcome wage stagnation and give millions of workers an automatic raise.  They are particularly thrilled that this will most likely impact fast-food managers and retail workers who routinely work 50 or more hours a week. 

Now, the theory is that businesses won’t be able to automate their way out of this one; we’re talking about clerical, office workers and managers who can’t be easily replaced by machines.  Once again, Obama and the liberals simply don’t understand what’s really going to happen. 

I’ll take a shot at this. First, companies will require those same employees to get the same amount of work done in less time – under the 40 hours.  And that’s the best-case scenario. 

More probable is that they’ll turn many of those same jobs into “contract” jobs”; those employees will become independent contractors.  As independent contractors they’ll be just another vendor, on a fee for services basis, off the company’s payroll and responsible for their own benefits. They’ll also no longer be eligible for overtime whether they work 40, 50 or more hours.   

That’s what’s really going to happen. Count on it.

Obama and the liberals created this bad economy. True, they inherited a financial mess.  But that was seven years ago, plenty of time for the economy to recover entirely on its own.

Had it been left alone.

The Obama Administration – through sheer ignorance of how business and the economy work – has made things much worse than need be.

Average household income has plummeted. Fewer Americans are working full time. 

There are real consequences to bad economic policies, no matter how popular they are with some segments of the population.

We’ll see how popular these remain when people start losing the very jobs they thought would be paying them even more.  And the benefits they now have.