It’s hardly a secret that Democratic policies lead to social exclusion, especially progressive policies. Social democracy, in particular, requires a pool of “permanently unemployed” citizens to keep wages high in the protected employment sector and maintain exorbitant job security.
National Review Online ran an article last year on progressive critiques of the Earned Income Tax Credit that was very telling. It quoted this paragraph from a study done by a progressive economist:
The EITC is intended to encourage work. But EITC-induced increases in labor supply may drive wages down. I simulate the economic incidence of the EITC. In each scenario that I consider, a large portion of low-income single mothers’ EITC payments is captured by employers through reduced wages. Workers who are EITC ineligible also see wage declines. By contrast, a traditional Negative Income Tax (NIT ) discourages work, and so induces large transfers from employers to their workers. With my preferred parameters, $1 in EITC spending increases after-tax incomes by $0.73, while $1 spent on the NIT yields $1.39.
As hard as it is to believe, this economist is actually proposing the government exclude some workers from the low-skilled labor market to maintain high wages in that market. While conservatives often make this argument with respect to illegal immigration, this economist is saying the government should exclude native-born citizens already in deep poverty, and buy them of with a welfare benefit.
The left has always prioritized greater wages and benefits for most over reducing social exclusion for some. In their view, people excluded from society should be made comfortable, but allowing them to work is unacceptable because it bids down wages. Such a crude materialist view–that human beings are happy when materially taken care off, not when they feel included in society–is fundamentally inhumane.
In contrast, the GOP believes that jobs for all is preferable to the left’s vision of high wages for most, paid for by social exclusion of some and generous welfare benefits for those excluded. Barack Obama, the first black president, raised the minimum wage in the depths of a recession in 2009, and the results today are stunning: black unemployment is significantly higher than other racial groups, and today poor black communities are as mired in poverty as ever.
Mitt Romney should run on this. Republicans created the Earned Income Tax credit so poor people could work and support themselves. Barack Obama, in contrast, weakened welfare reform’s work requirement, violating the Clinton/Gingrich bargain that allowed poor people back into society after being excluded by LBJ’s Great Society; even worse, he raised the minimum wage in the middle of a recession triggered, in many ways, by wages that were too high and a labor market that had overheated. By delaying the necessary (and mild; usually estimated at 4-5%) fall in wages, Obama guaranteed a slow recovery and a high level of unemployment.
Romney will create a future for all. Obama will create a future for some.