Obama’s war on opportunity


President Barack Obama delivers remarks on the economy during a visit to a Safeway Distribution Center in Upper Marlboro, Maryland February 18, 2014.

Article Highlights

  • @marcthiessen The way to create opportunity is not through government mandates but through economic growth

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  • @marcthiessen Under Obama’s leadership, the United States is experiencing an unprecedented “growth gap”

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  • @marcthiessen Thanks to Obama, this anemic level of growth is the “new normal.” Get used to it.

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  • @marcthiessen Obama says he came to office to end wars. He can start by ending his war on opportunity

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The “opportunity agenda” was supposed to be the signature initiative of President Obama’s second term. But recent data suggest his administration is waging a war on opportunity instead.

First, came the Congressional Budget Office report, which found that Obamacare will reduce overall employment by the equivalent of 2.5 million workers by 2021 and will reduce aggregate labor compensation for Americans by 1 percent during the same period — a $70 billion-a-year pay cut for lower- and middle-income American workers.

Then the New York Times reported that, substitute teachers, school bus drivers, police dispatchers, prison guards, coaches, janitors, cafeteria workers and other low-wage public workers are all seeing their hours cut because of Obamacare. As one local official told the paper, “Our choice was to cut the hours or give them health care, and we could not afford the latter.” Obama promised in his State of the Union to “build new ladders of opportunity into the middle class,” but for many part-time and low-income workers, Obamacare is reducing their hours and their wages — knocking them off the ladder of opportunity.

Now Obama wants to add another barrier to opportunity: raising the minimum wage. In his weekly radio address Saturday, Obama declared his proposal to raise the minimum wage to $10.10 an hour would “lift wages for more than 16 million Americans without requiring a single dollar in new taxes or spending.” Unfortunately, another CBO report found that while Obama’s plan would increase would raise incomes by about $31 billion, it would also kill about 500,000 jobs — reducing income by about $29 billion. In other words, virtually all of the income gains Obama claims for raising the minimum wage would be offset by the income losses from the half-million jobs it would kill.

White House Council of Economic Advisers chairman Jason Furman rejected the CBO’s findings, declaring that “raising the minimum wage has little or no negative effect on employment.” File that statement away. If a minimum-wage increase passes and starts killing jobs, it will be remembered as a false promise on par with Obama’s “you can keep your plan” lie.

Not only would a minimum-wage increase destroy jobs, those most harmed would be Americans at the bottom of the economic ladder trying to work their way up. That is because when employers are forced to pay higher wages, they tend to look for more-experienced workers — and higher wages make otherwise low-paying jobs more attractive to those more-experienced workers. Result? Minimum-wage increases push those they are supposed to help — lower-wage, inexperienced and disadvantaged workers — out of the workforce in favor of more skilled and experienced workers. How does that help create “opportunity” for these struggling Americans?

What the Obama administration does not seem to grasp is that the way to create opportunity is not through government mandates but through economic growth. And here is where the news gets really bad. Under Obama’s leadership, the United States is experiencing an unprecedented “growth gap” — the difference between gross domestic product and the GDP we would be experiencing if the economy was running at full speed.

According to the CBO, the economy is still producing $700 billion less annual output than it would if it were back to its pre-recession peak performance. This is almost unprecedented in our nation’s history. Today, more than four years after the recession ended, we are just 48 percent of the way back to peak performance. By contrast, after the similarly deep 1982 recession, the economy was 88 percent of the way back to optimal performance at this point in the recovery.

What this means is that, by the time Obama leaves office in 2017, the “growth gap” will have cost the U.S. economy $6.7 trillion in lost output and income over 10 years. That comes to $55,000 per household. More shocking still, the CBO assumes in its estimates that GDP will never return to its full potential. The CBO projects a permanent, structural “growth gap” that will reduce GDP by $100 billion per year for the forseeable future.

In other words, thanks to Obama, this anemic level of growth is the “new normal.” Get used to it.

This growth gap is the real threat to opportunity in America. But instead of addressing it, Obama is making it worse with opportunity-killing, job-destroying, mobility-stifling policies. We cannot raise wages of working Americans by killing half-a-million jobs. We cannot address income inequality by giving Americans a $70 billion-a-year pay cut courtesy of Obamacare. We cannot “build new ladders of opportunity into the middle class” until we stop throwing away $100 billion in lost income and output every year — and unleash the full potential of our economy.

Obama says he came to office to end wars. He can start by ending his war on opportunity.

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About the Author


Marc A.
  • A member of the White House senior staff under President George W. Bush, Marc A. Thiessen served as chief speechwriter to the president and to Secretary of Defense Donald Rumsfeld. Prior to joining the Bush administration, Thiessen spent more than six years as spokesman and senior policy adviser to Senate Foreign Relations Committee chairman Jesse Helms (R-N.C.). He is a weekly columnist for the Washington Post, and his articles can be found in many major publications. His book on the Central Intelligence Agency's interrogation program, Courting Disaster (Regnery Press, 2010), is a New York Times bestseller. At AEI, Thiessen writes about U.S. foreign and defense policy issues for The American and the Enterprise Blog. He appears every Sunday on Fox News Channel's "Fox and Friends" and makes frequent appearances on other TV and talk radio programs.

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