Published March 07. 2014 4:00AM
If, as President Obama said Wednesday in New Britain, it's "time to give America a raise," his solution - raising the minimum wage - is laughable. Only 5 percent of the workforce earns the minimum wage, and raising it would probably just raise costs for the remaining 95 percent.
In fact, only the federal government itself is in a position to give the whole country a raise, something that can be accomplished only by reducing taxes. So what an irony it was for the president to come to Connecticut to issue his grand call to give the country a raise - the state whose governor, Dannel P. Malloy, the president's great ally and fellow advocate of raising the minimum wage, imposed the biggest tax increase in the state's history, a tax increase that gave a raise only to government employees and that gave everyone else a big pay cut.
But the president was worse than that in New Britain. He endorsed the "living wage" myth, the myth that, as the president put it, "nobody who works full-time should ever have to raise a family in poverty," which is to say that salaries should be determined by want or need rather than by the value produced by an employee.
This apparently means that people have no obligation to learn marketable skills before having children, that people should be free to incur whatever living expenses they want and not necessarily work hard enough to cover them, because the rest of society should provide.
The world doesn't and never will work that way. Wishing won't make it so and neither will legislation, and government's pretending that the world works that way is why the country is declining against countries that know better.
Just hours before the president arrived in New Britain, the minimum wage nonsense triumphed in New London, where the City Council adopted a resolution raising the minimum wage to $10.10 per hour for 40 seasonal city employees. Meanwhile the city's newspaper, The Day, reports that the city is essentially bankrupt, its services and infrastructure crumbling so much that it can't afford to clear the streets of snow, with high taxes and weakening demographics having driven more than 40 businesses out in the last two years. Even the downtown pornography shop has closed.
The cost of New London's grand gesture with the minimum wage is estimated at $13,000 per year, but Mayor Daryl Justin Finizio and the City Council may count it as an investment in the good will of the president and the governor, to be recovered through increased federal and state financial aid. That is, unlike businesses that will be stuck with rising costs in hard times, city government figures that it can afford a higher minimum wage because in the end it won't have to pay at all - state and federal taxpayers will.
Similar thinking about economics was exhibited by the Malloy administration this week with state government's award of a $3 million discounted and largely forgivable loan to a bakery planning to expand in East Hartford.
Economic development ordinarily is infrastructure or the recruiting of a unique business that will attract related businesses. While it's a huge and dubious gamble, the Malloy administration's $300 million in subsidy to Jackson Laboratory's "mouse factory" in Farmington can be considered infrastructure for nurturing a "bioscience" industry here.
But state subsidy for a bakery?
While this one is a commercial bakery, Connecticut is already full of bakeries that distribute their products to restaurants and supermarkets and might like to expand. Whatever growth occurs at the state-subsidized bakery well may come at the expense of the others.
The Malloy administration's economic development policy is full of such nonsense and unfairness - subsidies not just for bakeries - but for restaurants, insurance agencies, and so forth, hurting more businesses than are helped as state government picks winners and losers. It's really all just political patronage and corporate welfare.