In his State of the Union address, President Obama announced two major executive orders meant to encourage further economic recovery and growth.
The President announced a new commission, to be led by Vice President Biden, to reform the nation’s job-training programs. The President sees this big-government approach as a solution to what economists call structural unemployment. As new technology and outsourcing has sent good-paying jobs overseas, laid-off American workers, who had years of built up human capital in these fields, are left out of work. A federal jobs-training program is an inefficient way to re-train these workers, though. Let the individual states, all with their own unique economies, develop programs which best meet the needs of the industries within their borders. Better yet, create an environment where businesses can grow and prosper free of the constraints of government regulation. The free markets will pair new workers with these thriving businesses, which will be eager to offer on-the-job training.
In yet another executive order, the President raised the minimum wage for federal contractors to $10.10. This minimum wage might be possible for a government that runs a massive deficit and can endlessly print money, but it is a job killer for the private sector. If forced to pay a higher wage, firms will be forced to lay-off and shorten the hours of many of their workers.
The President pleaded with business owners to voluntarily raise wages for their workers, saying that it would ultimately be good for their firms. If raising wages was so good for business, how would business owners, working alongside their employees every day, fail to see this before a politician in D.C.?
Jonathan Howe
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