- Cafe Hayek - https://cafehayek.com -

Sauce for the Progressive Goose Is Sauce for the Free-Market Gander

Tweet [1]

Here’s a letter to a gracious, learned, and smart long-time correspondent whose view of the world differs greatly from my view of it:

Mr. Claude Knowlton, Esq.

Dear Mr. Knowlton:

Thanks for your e-mail.

You think me “wooden” and “unrealistic” for criticizing the majority opinion in King v. Burwell [2].  Unsurprisingly, I disagree.

You are, of course, correct to note that the meanings of words and phrases are often ambiguous and, thus, require interpretation.  And reasonable people can and do frequently disagree about the best interpretations of ambiguous words or phrases in their specific contexts.  Recognition of this reality, however, is no license for a court to give to words and phrases meanings that those words and phrases plainly do not have.  Yet such a license was precisely what Chief Justice Roberts and his majority colleagues on the Court issued to themselves (and, hence, to lower courts in the U.S.) with the King v. Burwell decision.

If you excuse this sort of judicial rewriting of legislation, then where do you stop?  Suppose that in the future President Rand Paul, convinced by a great deal of empirical research [3] and by sound economic theory [4], sensibly concludes that a minimum wage of $7.25 per hour harms low-skilled workers – an outcome exactly the opposite of what Congress ostensibly meant to achieve.  Pres. Paul then orders the Wages and Hours Division of the U.S. Department of Labor to interpret “$7.25 per hour” (the current minimum wage stipulated in the Fair Labor Standards Act) as “$0.01 per hour.”  Arguing that only such an interpretation of that term of the legislation will achieve the purpose that Congress intended, Pres. Paul directs the Department of Labor not to prosecute employers who pay their workers hourly wages of $0.01 or more.

This controversial interpretation of the statute is then challenged in court.  If Chief Justice Richard Epstein accepts – as he surely would – the administration’s claim that a minimum hourly wage of $7.25 harms many of the workers who Congress insists it meant to help, why should he and other like-minded members of the SCOTUS not use the logic of King v. Burwell to uphold the Paul administration’s reasonable argument that, to make the Fair Labor Standards Act work as Congress intended – to ensure that government’s most-recent change in the minimum wage in fact offers maximum possible economic opportunity and benefit to low-skilled workers without causing any of them to suffer unemployment – “$7.25” must be read as meaning “$0.01”?  I certainly now can see no good reason for any such “wooden” and “unrealistic” restraint on the part of the Court.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

UPDATE: No one has pointed out yet, but someone no doubt will eventually do so, in response to the above letter, a potential difference in the minimum-wage scenario that I present here and the Obamacare reality that was at issue in King v. Burwell.  That someone will, not unreasonably, say that Chief Justice Roberts’s re-writing of the statutory language was necessary simply to make operational the governmental apparatus created by the statute rather than to directly achieve the ostensible goal of the statute (here, greater health-insurance coverage).  In contrast (this someone continues) the minimum-wage hypothetical in the above letter involves no problem of the governmental apparatus set up by the Fair Labor Standards Act failing to work if the hourly minimum wage is interpreted as explicitly written (that is, as $7.25 per hour).

Such a difference is real.  Yet the relevance of this difference is unclear.  If courts are to take into overriding account, when they interpret statutory language, the (known or surmised) goals that the legislature intended to achieve with the statute and then give life to those goals even if doing so requires a rejection of the plain meaning of the statutory text, then it is not implausible – if not unavoidable – to argue that some court should, using King v. Burwell, uphold a government-agency’s decision to read “7.25” as it appears in the Fair Labor Standards Act to really mean “$0.01.”  That court could reason that Congress cannot possibly have meant to cast many low-skilled workers into the ranks of the unemployed, especially given that the stated purpose of the most-recent hike (to $7.25 per hour) of the minimum wage was to increase the incomes of low-skilled workers.  Because Congress cannot possibly have meant to cause such harm to the people who are the very objects of its concern in this statute, and because the best way to avoid the undesirable outcome of unemployment caused by the “inartful” use of the term “$7.25” is to interpret it as meaning “$0.01,” such a re-writing by the court of the statutory language is necessary if Congress’s intention is to be achieved.  After all, according to economic logic and a great deal of empirical studies, the lower the legislated minimum wage, the better off economically is the typical low-skilled worker.