The Right Minimum Wage: $0.00

[zero point zero] That was the headline on the lead editorial in the New York Times on January 14, 1987. Alas, the Twin Cities didn't heed that advice, thanks to (as Philip Greenspun points out) PhD-level thinking in economics. Quoting a MinnPost article:

The push to raise the minimum wage to $15 an hour in both Minneapolis and St. Paul has successfully boosted the average worker’s hourly pay in both cities, but it has also led to sharp drops in the numbers of available jobs and hours worked, new research from the Federal Reserve Bank of Minneapolis has found.

(Links to the FRB's studies added.)

I'm bemused by the seemingly tautological claim that the minimum wage increase "boosted the average worker’s hourly pay". Well, yeah: if you chop off the lower tail of the hourly wage distribution, the average of what's left of the distribution will necessarily be higher.

But it seems clear that the primary effects of legislatively destroying the bottom rungs of the economic ladder were negative.

PhilG also notes the cavalier attitude of that "PhD-level" thinker quoted by the MinnPost:

“Somebody who loses their job because of a minimum wage increase is going to find another job,” said UC Berkeley economist Michael Reich. “Probably not right away, they’re going to work fewer weeks per year — but they’re not going to be permanently unemployed.”

Let them eat welfare in the meantime. I added a "fun fact" comment to PhilG's post: the quoted “UC Berkeley economist Michael Reich” is one of the founders of the Union for Radical Political Economics, self-described as “an alternative professional organization for left political economists and an intellectual home for academics, policy-makers, and activists who are interested in participating in a left intellectual debate on theoretical and policy issues.”

I guess that’s where you have to go to find an economist willing to defend, however lamely, minimum wage laws.

Coincidentally, Cafe Hayek's Quotation of the Day is from Thomas Sowell:

Minimum wage laws play Russian roulette with people who need jobs and the work experience that will enable them to rise to higher pay levels.

Also of note:

  • Since we're talking about employement… Robert F. Graboyes provides 20 Job Tips for 2020s 20-Somethings. A small sample:

    1. Jobs that can be done in Cheyenne, Des Moines and Sarasota have potent advantages over those that can be done only in New York, Chicago and San Francisco.

    2. For now, college degrees are important, but high tuition and opportunity costs, combined with often less-than-stellar returns, are reviving the notion that the workplace is often a better educational venue than a university.

    3. Maybe Ivy League graduates making photocopies for congressmen shouldn’t look down on plumbers who own beach homes.

    That last tip has a footnote that you will not want to miss.

  • Water is still wet, and… David Harsanyi notes that AR-15 Bans Are (Still) Unconstitutional.

    Gun control advocates have become so dependent on emotional arguments they often seem incapable of offering rational ones. So, I was eager to read a new Bloomberg column (via The Washington Post) headlined, “The Second Amendment Allows a Ban on the AR-15.”

    The piece doesn’t get off to a promising start, as author Noah Feldman props up a familiar straw man:

    If we each have the right to bear arms, is there a constitutional right to a military-style semiautomatic rifle like an AR-15? What about a rocket-propelled grenade launcher? A small tank?

    Notice how he jumps from the oxymoronic “military-style semiautomatic rifle” — not a real thing — to a small tank. Anyway, the proposition is that we should not have access to military-grade armaments. (Feldman is unaware that owning a small tank is legal.) But we’ll get back to that in a moment.

    Harsanyi proceeds to a robust discussion of SCOTUS jurisprudence, concentrating (as Feldman does) the United States v. Miller decision, rebutting Feldman's claims about its holding. Then proceeding on to good old Heller.

  • In case you haven't read Hayek recently… Bruce Yandle will brush you up, using a convenient foil: Biden's Experience Doesn't Mean He Can Plan an Economy.

    In a recent interview with MSNBC's Stephanie Ruhle, President Biden responded to a question regarding his age (80 years old) and how that might affect his performance should he have a second term in office. "I have acquired a hell of a lot of wisdom and know more than the vast majority of people," Biden said, "And I'm more experienced than anybody that's ever run for the office."

    This was a positive response to a tough question, but one that deserves more examination. No presidency, especially one so active with industrial policy and economic planning, can get by on this answer.

    We all recognize that a person who's lived 80 years will have had more life experiences than one who has trod the planet for 70, 60 or 50 years. And it's easy to see that Mr. Biden, who has devoted his entire adult life to politics, is armed with countless stories and lessons learned about the nation's political economy. But granting this does not support the idea that Biden knows more than the vast majority of us, all topics considered. Nor does any of this matter much if his administration consistently fails to account for the vast majority of the people's knowledge taken together.

    Yandle notes that he's about to turn 90 himself. And, you know, I'd much prefer him as president. He's smart enough to know what he doesn't, and can't, know.

  • But Biden's not the only fool on the hill. Veronique de Rugy has a couple questions. What is 'Common Good Capitalism,' and Why Are Some Conservatives So Enamored?.

    "Common-good capitalism" is all the rage these days with national conservatives. But what exactly is it, you may ask? That's a good question. As far as I can tell, it's a lovely sounding name for imposing one's preferred economic and social policies on Americans while pretending to be "improving" capitalism. If common-good capitalism's criticisms of the free-market and prescriptions for its improvement were ice cream, it would be identical in all but its serving container to what much of the Left has been dishing up for decades.

    The wider adoption of the term Common-Good Capitalism (CGC) can be traced back to a speech given by Sen. Marco Rubio, R-Fla., at Catholic University in 2019. While there are different strains of common-good capitalism, they all have in common the goal of producing a more balanced and stable economy that better serves the nation and its people.

    The common good is, of course, a vague and subjective concept, the details of which are hard to pin down. Its advocates claim it's an alternative form of conservative governance meant to promote things like tradition, workers' dignity, religion, order and families, rather than the singular free-market focus of personal liberties and economic freedom. How exactly government policies will be used to mold capitalism into achieving these goals — many of which go further than economics — is unclear. This haziness explains why those defending common-good capitalism usually do so only by listing what they see as wrong with the free market, rather than by giving their audiences specific details.

    As we've said before: the "common good" modifier in "common good capitalism" should be understood to mean "not really".

Last Modified 2024-01-30 6:03 AM EDT