Why Obama’s Promise for More Jobs is a Stretch
Imagine a society where we all go to work for three to four hours a day, where all resources are publicly owned (minimizing wealth gaps between rich and poor to near nothing). Everybody remains wealthy and works to his or her own ability, and receives according to his or her need. Sounds like a beautiful society right? The flaw with this system is that it does not work. The Russians rode it until its collapse, the Chinese were forced to swap to a free market or face poverty along with all other nations who have attempted to give the Communist government
a chance. The idea sounds great but forgets to give incentive for hard work and producing a valuable good. Obama has said things that sound good, but as I will show you don’t make perfect sense. Admittedly Obama is not a communist or near it (most would argue), but he does promise things that are probably unreachable.
A high majority of us at TCU are from the middle class or above. And most of know how the steeper progressive income tax (that is charging higher income families a higher percent in taxes than the lower classes) that Obama proposes would hurt our parents. What most of us don’t know is that it will hurt the lower class as well. The increase in the taxes among the highest brackets forces many rich member of society to do one of following: quit working/retire, find a less demanding job or cut back in working. If this rich member of society employs people (who would probably be in a lower class than himself), they would either be fired (if he quits/retires) completely, or be reduced in hours or pay. The upper class creates jobs. It’s a fact. Taxing them more, results in them creating less. This is another fact. Obama claims to want to create many jobs for the lower class, but he openly supports a high increase in the upper class taxes. If you don’t believe me thus far, ask one of our brilliant economics teachers here on campus to explain it in more detail. And if that does not convince you, you may look at what has happened to those countries that have abandoned the progressive tax system (all income is charged a fixed percentage not based on income). As they got rid of high income taxes for the rich they also saw an increase in the countries overall production and (can it be?) employment. So far this means Obama has not convinced me that he will increase jobs, but let us look at another point he makes.

Obama says something that sounds like a brilliant idea (why have we not thought of this before, are we inhumane?), “We should raise the minimum wage!”. While on the surface this seems like a good idea let me show a bit why it has already happened (we may not be so inhumane after all.) Lets look at the effects of a minimum wage increase. Say I am employer at a taco hut. I have four employees and pay them all minimum wage (for simplicity sake lets just call that 5 dollars an hour), and I work each ten hours a week costing me (4 workers times ten hours times 5 dollars) two hundred dollars a week. Lets say that the ingredients cost me 50 dollars a week. So my total cost is 250 dollars a week, and lets say I am making 300 dollars a week (50 dollars profit). What if this minimum wage doubles? Now my workforce costs me 400 dollars (4 x $10, new doubled price x 10). I can’t afford to stay open at this wage because im only making 300 and my expenses are 450. I am either forced to shut down( loss in jobs) or higher few workers (or work them less hours) and make a smaller income. Either way that is a loss in hours worked. Again this point can be found in any entry level economics textbook. So yes maybe a few workers get more pay, but they might get less hours or have to see a buddy get let go. So yet again Obama supports a plan that would in fact create even less jobs.
Obama could have a great trick up his sleeve, something that we as a free market has never seen before. Maybe he is an economic genius and will show us a way to do these things and somehow increase employment at the same time. Maybe, but I doubt it. It is this authors opinion that Obama knows exactly what he is saying and just knows that if he can promise these things, he will get votes, because on the surface it makes great sense. Does this means that Obama is lying to us? Who knows? Another possibility is that maybe he just is unaware how these policies affect each other. But is it any better to have a president this ignorant on economic policy? The reason I showed communism is because on the surface it is so “nice”, much like how Obama’s plan seems “nice”.