Douglas Holtz-Eakin and Ben Gitis find that
raising the minimum wage would cost 3.8 million low-wage jobs. In total, income among low-wage workers would rise by, at most, $14.2 billion, of which only 5.8 percent would go to low-wageworkers who are actually in poverty.
Often ignored – and even sometimes ridiculed as being instances of ‘scaremongering’ – are the warnings of scholars such as Ludwig von Mises, F.A. Hayek, and Milton Friedman that government power to regulate X inevitably threatens to grow cancerously into a power that restricts people’s actions in activities well beyond X. George Selgin documents a dangerous recent instance of the Fed expanding and using its powers to trample liberties that have nothing to do with its mandate.
At EconLog, David Henderson offers more wisdom on the connection between market power and worker safety – wisdom that is the product of David’s excellence at using the microeconomic manner of reasoning. Here’s a slice from David’s post:
[Sound economics teaches that] if people believe that workers get less than the optimal amount of safety, their inclination is to advocate that a government mandate an increased level of safety. Ignore all the real problems about how the government could do this and whether such a mandate would be effective. If the mandate is effective, it will make people who work for a monopsony employer worse off.
Bob Higgs is rightly unimpressed with national-income accounting. Here’s his conclusion:
In any event, it is difficult to believe that this statistical measure is the sort of raw material with which a defensible science can be conducted. As one looks upon what passes for empirical analysis in macroeconomics, the first impression that comes to mind is not the loveliness of GDP, but the ugliness of GIGO – garbage in, garbage out.
