Russell's Blog

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Everyone loves S. 2

Posted by Russell on January 04, 2007 at 8:54 p.m.
The Democrats have launched their first ten bills as the the majority party in Congress. They are all excellent proposals, but I love S. 2, which will raise the minimum wage to $7.25 an hour, because it is a great idea and yet completely uncontroversial. That is, for everyone except crazy idiots like George Will at the Washington Post, who think the minimum wage should be abolished.
But the minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices. Washington, which has its hands full delivering the mail and defending the shores, should let the market do well what Washington does poorly. But that is a good idea whose time will never come again.
Really? I mean, Really? Why does Mr. Will pine for the good old days of the 19th century? There is really only one coherent coherent criticism of the Federal minimum wage that has survived scrutiny; that it is a floor without a ceiling, and therefor helps to institutionalize inflation. However, the minimum wage is so low that the aggregate purchasing power of all people at or near the minimum plays and insignificant role in inflation -- and even raising it to $7.25 won't change this. Although fewer in number, the wealthy command much greater aggregate purchasing power, and thus play a larger role in inflation. If we really treated labor as a commodity, then we should also have a Federal maximum wage.

But of course, this is America. Every economic policy needs to be attached to some sort of appeal to the emotions. This is exactly what George Will is doing; his is encouraging the reader to join him in waxing nostalgic for the simpler days of buggy whips and gas lamps, before everything got so damn political.

Evidently, poor Mr. Will was denied a proper education. The decent and proper thing to do would be to take up a collection so he can attend a few introductory history and economics classes at his local community college.

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