Tweet [1]
A GMU Econ colleague of mine from long ago Phil Coelho and my friend Jim McClure make an important argument about how to correctly analyze the full consequences of minimum-wage legislation [2]. (Their point is closely related to one that I made recently here at the Cafe [3].) Here’s Phil’s and Jim’s conclusion:
Minimum wages are extraordinarily damaging to the most disadvantaged of society — the physically and mentally handicapped, the poorly educated, the young and unskilled and those with checkered histories that make them questionable employees. The road to perdition is paved with both good intentions and ignorance; the economics profession has been willful in its ignorance by concentrating on the marginal consequences of increasing minimum wages rather than emphasizing the continuing harm that minimum wages create.
Starbucks’ Howard Schultz and other men of good will unthinkingly embrace the belief that higher living standards can be legislated by simply putting floors on wages. This does not create prosperity; it creates poverty and misery. Even worse, the damages it does are concentrated upon society’s most vulnerable. This is a sin.
My good friend Hans Eicholz reviews Frederick Taylor’s 2013 book, The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class [4].
Boston Globe columnist Jeff Jacoby celebrates the 40th anniversary of one of my favorite books, Otto Bettmann’s [5]The Good Old Days – They Were [5] Terrible! [5] A slice:
Parking hassles in our era can be maddening, but who wouldn’t prefer them to the foul congestion of the Gilded Age [6]? Bettmann describes “sidewalks . . . lined with unharnessed trucks, beneath and between which dirtier citizens threw their filth.” At times New York reeked like a vast stable, one visitor commented — and what was true of the nation’s largest municipality was true of smaller cities as well: “Pioneers trekked westward to breathe what they expected would be the fresh air of small frontier towns. What they often encountered was air like that of a malarial swamp.” A photograph of Helena, Mont., illustrates the point, depicting a busy street clogged with wagons, where hitching places for horses regularly turned into cesspools.
But at least roads were safer before the advent of car accidents, right? Wrong. Runaway horses were a serious danger, creating “havoc [that] killed thousands of people,” Bettmann writes. “According to the National Safety Council, the horse-associated fatality rate was 10 times the car-associated rate of modern times.”
My student Mark Lutter – whose dissertation (in progress) is on the economics of private cities – corrects The New Republic‘s misunderstanding of a closely related phenomenon [7]. Reason’s Brian Doherty also weighs in against The New Republic on this matter [8].
Modernity is marvelous [9]. (HT Truong Bui.)
Burt Folsom takes on the common myth that WWII ended the Great Depression [10].
Tim Worstall responds [11] to my question [12] about research on the contribution of brand-names relative to that of government regulation on the improvement of food quality and safety.