In the March 13th, 2012, edition of the Wall Street Journal, Walter Williams and I had an op-ed on the minimum wage. Walter did not often write with others; I’m very proud that he agreed to write this piece with me.

I believe that I have not yet shared it in full here at Cafe Hayek, so here it is, pasted below.

How to Keep More Kids on the Streets
By Donald J. Boudreaux And Walter E. Williams

Economists have analyzed the minimum wage and its effect on employment more often than almost any other topic. And the result of all this study is clear: Raising the minimum wage hurts the very people—low-skilled workers—that champions of the raise intend to help, because it prices many such workers out of jobs. That’s just what a bill now under consideration by New Jersey’s legislature will do. By raising the state minimum wage to $8.50 from $7.25 an hour, politicians will guarantee that fewer people get work.

The reasoning here isn’t rocket science. Put yourself in the place of an employer and ask: If I must pay $8.50 an hour to whomever I hire, does it pay me to hire a person who is so unfortunate as to possess skills that would only allow him to contribute $5 an hour to my bottom line? Most employers would view hiring such a person as a losing economic proposition. Therefore the effect of minimum-wage legislation is to discriminate against the employment of low-skilled persons, who are for the most part young, and mostly minority young, people.

Proponents of raising the minimum wage assert in effect that the laws of economics don’t apply to human labor. Yet wishful thinking aside, no employer can afford to pay a worker more than that worker’s services are worth to the firm. Importantly, though, no employer who wants productive employees can afford to pay less than that worker’s services are worth to the firm, either. Wages in market economies reflect each worker’s productivity.

Evidence for this is overwhelming. Consider that in 2010 25% of workers in America age 16-19 earned no more than the federal minimum wage of $7.25. But in that same year only 11% of workers 20-24 earned so little. The figure for workers 25-29 earning this meager hourly rate was lower still, at 6%. This falling trend continues as workers age, so that among people 60-64, only 2% were earning at or below the minimum wage.

In short, as people age they gain more skills and experience. The resulting higher productivity pushes their wages up.

Responding to this argument, minimum-wage proponents note that some studies—especially one done in 1994 by economists David Card and Alan Krueger—show that raising the minimum wage has little or no effect on employment. While such studies do exist, they have been devastatingly challenged by other professional economists, who pointed out significant flaws in methodology and data interpretation.

The evidence is overwhelming that minimum-wage legislation has a negative effect on the employment of low-skilled workers. As a careful empirical study done in 2000 by Cornell University economist Richard Burkhauser and some co-authors concluded: “Minimum wage increases significantly reduce the employment of the most vulnerable groups in the working-age population—young adults without a high-school diploma (aged 20-24), young black adults and teenagers (aged 16-24), and teenagers (aged 16-19).”

Even the loudly and proudly progressive economist Paul Krugman—who called the Card-Krueger result “iffy”—has admitted that raising the minimum wage likely reduces employment prospects for low-skilled workers.

If minimum-wage legislation only destroyed jobs for teenagers, it would be bad enough. But its long-term consequences are more dire. Precisely because the climb to higher wages begins for most workers during their teenage years with entry-level jobs, the minimum wage—by knocking off the bottom rungs of the economic ladder—effectively tells young workers: Unless you can jump immediately to higher rungs on the ladder, you must remain unskilled and unemployed for the indefinite future.

Moreover, the little bit of money a teen can earn after school or in the summer is nowhere near as important as what he learns from these early work experiences, such as showing up on time, respect for supervisors, and pride from being financially semi-independent. Such experiences are even more vital to minority youths who attend rotten schools or live in broken homes. If they are to learn to become valuable workers, it will be through jobs they hold and not the schools they attend.

All the good intentions of the champions of minimum-wage raises do nothing to cure these evil consequences. In New Jersey, and everywhere else, compassionate policy requires that we think with our brains and not with our untutored hearts.

Messrs. Boudreaux and Williams are professors of economics at George Mason University.

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Here’s a letter to the Washington Post:


Your criticism of Texas governor Greg Abbott’s decision to end statewide lockdowns is tendentious (“Greg Abbott is endangering the health of Texas and beyond,” March 3).

You ignore the evidence that lockdowns are ineffective at stopping coronavirus transmission.

You ignore the fact that, on March 2nd – the day of Gov. Abbott’s announcement – 23 percent of Texas’s inpatient hospital beds were unoccupied, as were 19 percent of that state’s ICU beds.

You ignore the ability of vulnerable and highly risk-averse individuals to take precautions against exposure to the coronavirus without compelling non-vulnerable individuals (who are the majority) to indefinitely keep their lives and livelihoods on hold.

By pointing to the fact that “recent declines in daily new infections and deaths had stalled” as an excuse for continuation of lockdowns, you ignore the reality that, short of the impossible complete elimination of Covid-19, such declines will at some point unavoidably stall. Rather than pointing to this stall, why didn’t you instead note that yesterday the seven-day average of new Covid cases was a mere 25 percent of what it was at its peak on January 8th, while the seven-day average of Covid deaths was only 57 percent of what it was at its peak on January 26th?

In expressing concern about new Covid variants, you ignore both the reality that all RNA viruses mutate, and that there is no evidence yet of any significantly enhanced danger from these mutations.

And you ignore lockdowns’ costs. These include the delay of medical treatment for non-Covid illnesses and injuries, the destruction of livelihoods, and the disruption of civilized life. Another especially noteworthy cost of lockdowns in Texas is their obstruction of routine in-person inspection of that state’s power grids. As reported by NBC, the Electric Reliability Council of Texas – which manages the flow of over 90 percent of that state’s electric power –  “did not conduct any on-site inspections of the state’s power plants to see if they were ready for this winter season. Due to COVID-19 they conducted virtual tabletop exercises instead – but only with 16% of the state’s power generating facilities.”

There is more to life than avoiding death from Covid. Indeed, living only to avoid Covid is unceasingly dreary when it isn’t itself deadly.

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

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In this video, John Stossel talks with Mike Rowe about so-called “essential workers.”

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Jason Riley asks: Why did Amazon cancel Justice Clarence Thomas? A slice:

The documentary began airing on PBS in May 2020 and streaming on Amazon in October. But it was taken down by Amazon on Feb. 8, according to the director, Michael Pack, and he has never been told why. “Our distributor, who’s the one who made the deal with Amazon, has repeatedly asked them for explanations but they haven’t given any,” Mr. Pack told me by phone this week. “They have the right to pull anything from their site, and they don’t have to give an explanation. So it’s not a contract violation. But many people have complained, and they haven’t put it back up.”

If this episode sounds familiar, it’s because Amazon pulled a similar stunt last fall. Eli Steele’s “What Killed Michael Brown ?”—a critique of liberal social policies that was written and narrated by his father, the race scholar Shelby Steele —was slated to stream on Amazon in October, then held up for reasons the company never fully explained. Amazon eventually relented and made the film available, but only after these pages weighed in and made a fuss.

The arrogance and tyranny lurking in Paul Krugman’s “Progressive” heart, soul, and mind are breathtaking. Eric Boehm reports. A slice:

But the real kicker is Krugman’s contention that “an excess of choice is taking a psychological toll on many Americans, even when they don’t end up experiencing disaster.”

Nonsense. Krugman is pushing an only slightly more sophisticated version of Sen. Bernie Sanders (I–Vt.) complaints about the wide variety of deodorants available at any American supermarket. Or, if you prefer a more academic take, he’s peddling a warmed-over version of The Paradox of Choice, in which psychologist Barry Schwartz argued that a proliferation of choices “no longer liberates” but rather “debilitates” and “might even be said to tyrannize.”

That claim has been challenged in subsequent social experiments, including one that reviewed 50 experiments into “choice overload” and found no evidence to support the idea. In fact, a 2009 study found that increasing the number of choices actually leads to people making more reasonable—not riskier or more indulgent—choices, because it is more difficult to justify the outlandish option when so many sensible ones exist.

If the Tappan Zee Bridge’s original name isn’t going to be restored, Peter Earle has a second-best candidate.

James Bovard reports on the wreckers of modern New York.

David Bier is rightly appalled at Biden’s immigration policy. A slice:

Under the Biden administration’s Wait in Mexico policy, immigrants and families dumped back into Mexico would not even receive a hearing date to await. They do not enter the asylum process at all. All they get from the Biden administration—beyond a push in the back on their way out the door—is the vague promise that at some undefined future time this administration will do… something to make things better.

Because DHS is hardly accepting in any of those returned under Remain in Mexico (despite celebrating ending it), the Wait in Mexico returnees are right now sitting with them in literally the same “squalor” that Biden denounced during his campaign. Biden insisted that he opposed making anyone wait for asylum in another country, and yet here is his DHS secretary announcing a worse version of the same idea.

Dan Klein writes about his recent discussion of Adam Smith’s condemnation of slavery.

Peter Suderman is highly critical of Elizabeth Warren – and properly so.

Ilya Somin writes that “there are serious constitutional problems with the overall US military presence in Syria.”

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Some Covid Links

by Don Boudreaux on March 3, 2021

in Country Problems, Current Affairs, Myths and Fallacies

Texas Gov. Greg Abbott lifts mask mandate and reopens the state 100 percent!

People still living under lockdown are in abusive relationships with their governments. (Some governments, like some spouses, are more abusive than others. But any government that restricts the normal range of activities of healthy people and that stokes their fear of each other and of the outside world is abusive.)

Jeffrey Tucker ponders the effects that lockdowns will have on politics going forward. A slice:

Lockdown vs not: this has the capacity to be a theme that will resonate far into the future. It also unites people on the political “right” again with small business, genuine civil libertarians, and champions of religious liberty. It permits the “left” to again find its voice for human rights and freedoms. For that matter, they do not have to be activists; they only need to be people who do not want their houses of worship padlocked, their business closed and bankrupted, or their speech curtailed.

Noah Carl debunks the myth that opposition to lockdowns was, and is, a “fringe” viewpoint. A slice:

Yet there is evidence that lockdowns represent a departure from conventional forms of pandemic management. And when assessing novel public-policy instruments, the burden of proof generally lies with those who seek to impose them. Lockdown advocates, such as Conservative MP Neil O’Brien, have made much of the fact that prominent lockdown sceptics at various points underestimated the infection fatality rate and overestimated the level of population immunity. And of course, it is absolutely right that such errors should be pointed out and corrected. But lockdown advocates have made errors, too. And since they’ve had more influence on government policy, all else being equal, their errors will have been more consequential.

In April, researchers at Uppsala University in Sweden analysed projections from an epidemiological model that its creators said was “based on work by” Neil Ferguson’s team at Imperial College. This model predicted that “with the current mitigation approach” there would be 96,000 deaths in Sweden by July 1st. In fact, there were only 5,370 deaths by that date. Imperial College has since clarified that Neil Ferguson’s team was not responsible for these predictions. Yet as historian Phil Magness points out, “the Uppsala team’s projections closely matched Imperial’s own UK and US predictions when scaled to reflect their population sizes,” which suggests the two models are based on quite similar assumptions.

For those of you who continue to believe that governments base their lockdown policies on “the science,” you might wish to take a look at this item.

Allison Pearson notes that every bit of good news about Covid-19 sparks news of new variants of the pathogen. Here’s her opening:

Another week, another Covid variant on the loose. Watch out! I refer, of course, to the deeply worrying Whitehall variant.

The Whitehall variant is rapidly transmitted by scientific advisers whenever there is encouraging news. The better the news, the more aggressive the variant.

The Whitehall strain of Covid-19 is highly contagious and is easily caught by politicians in the same room as members of Sage. Symptoms include a flustered, shifty appearance and an ability to speak only in what grammarians call the “Type 2 conditional”. For example: “This new variant may be more resistant to vaccines.” Or: “This new variant could be more lethal.”

Invariably, after 10 days or so, those speculative statements are proven to be groundless. Turns out our two terrific vaccines can cope just fine. But, by then, it’s too late. The Whitehall variant has caused a fresh outbreak of fear in the population just as they were starting to glimpse the end of lockdown.

Richard Ebeling offers to developing countries some post-Covid advice from Ludwig von Mises.

Here are some telling facts about Sweden and other Nordic countries.

You can’t measure the distress of lockdown, so it’s ignored.”

Here’s Phil Magness’s reaction to the news that Donald Trump received the Covid vaccine in January:

Vaccinating people who have already had Covid and recovered encapsulates the sheer idiocy of our government’s entire pandemic response.

Even if natural immunity is later discovered to dissipate (thus far it hasn’t), vaccines are currently extremely scarce and should be prioritized for those who have not been exposed to Covid. If it turns out that natural immunity dissipates, vaccinate the people who had it and then lost it at a later date. If it doesn’t dissipate, then great!

But vaccinating people who recently had the disease and have recovered is akin to flushing scarce doses down the toilet.

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… is from page 3 of Thomas Sowell’s 1993 collection, Is Reality Optional?:

If safety fanatics are allowed to kill the goose that lays the golden egg, that can also kill people. Already safety crusades are cracking down on the “pollution” of waterways involving traces of chemicals more minute than those found in tap water, sodas, beer, or even Perrier or Evian water. How much standard of living – which includes medical care – are we prepared to sacrifice in order to eliminate ever more remote dangers?

Even to ask such a question requires accepting the reality of economic constraints – and the trade-offs this implies. But those for whom indignation has become a way of life reject economics as readily as they reject history, geography, or anything else which implies that they cannot “have it all.”

DBx: Written decades ago, the above words by Sowell were, obviously, not aimed specifically at the absurd ‘precautions’ taken in the name of avoiding exposure to the coronavirus of 2019. But the same wise principle applies.

Humanity can always obtain some additional increment of protection from Covid-19. But at what cost? That this question has been, and continues to be, largely ignored – that every step believed to reduce exposure to the coronavirus is assumed to be worthwhile – is evidence of the reality of Covid Derangement Syndrome.

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The Wisdom of Walter E. Williams

by Don Boudreaux on March 2, 2021

in Philosophy of Freedom, Video

From 35 years ago is this lecture by my late, great colleague – and much-missed dear friend – Walter Williams.

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… is from page 56 of my late, great colleague Walter Williams’s 2011 book, Race & Economics (original emphasis):

The minimum-wage law has imposed incalculable harm on the most disadvantaged members of our society. The absence of work opportunities for many black youngsters does not only mean an absence of pocket money. Early work opportunities provide much more than that: important insights on how to find a job and to adopt proper attitudes toward both, punctuality, and respect for supervision in the workplace. Lessons of that sort learned on any job help make a young person a more valuable and successful worker in the future. In addition, early work experiences give youngsters the pride and self-respect that come from being financially semi-independent. That is even more important for black youngsters, a disproportionate number of whom grow up in female-headed households and to the nation’s worst schools. If they are to learn job-related lessons, many of them will be learned through a job.

DBx: Yes.

If a gaggle of Grand Wizards of the KKK wished to erect a surreptitious yet highly effective barrier to the economic advancement of minorities, they could do no better than to propose a minimum wage.

So to all you who support minimum wages: You might well have the motives of archangels, but your motives count for nothing against your preferred policies’ devilish results.

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A Discussion about Lockdowns

by Don Boudreaux on March 2, 2021

in Current Affairs, Seen and Unseen, Video

Freddie Sayers and UnHerd TV host this discussion featuring Tory MP Charles Walker and Lord Blunkett of the Labour Party.

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Wall Street Journal columnist Holman Jenkins decries the intellectual state of humanity these days. A slice:

Especially but not exclusively on the left, it seems bad form nowadays, and even evidence of some kind of guilt, to subject any passionately-made claim to cool examination. Consider a well-covered racial incident at Smith College where slandering any number of white people became the preferred alternative to a black person having to hear that she was wrong.

Distrust of the media, and the media’s own disavowal of the supposedly tired idol of “objectivity,” is another factor. If no disinterested authority exists who can be trusted to refute a lie without fear or favor, it begets lying. A lawyer for a voting machine company told the New York Times recently: “So many people out there, including people in positions of authority, are just willing to say anything, regardless of whether it has any relationship to the truth or not.’’

Arnold Kling explains why he’s more worried than are many other economists about the return of high inflation. (I largely agree with Arnold, and am putting my money behind my fear of higher inflation by moving more heavily into inflation-indexed bonds. [Understand, however, that I know next to nothing about finance – even personal finance. But I do fear that inflation is coming.])

Art Carden is not in favor of forgiving student loans.

Nick Gillespie talks with Thomas Sowell’s biographer, Jason Riley.

Juliette Sellgren talks with Lenore Skenazy about parenting.

Thomas Hogan looks at electricity prices in Texas.

George Leef weighs in on minimum wages. A slice:

Most politicians know perfectly well that some workers will be hurt, but to them (the politicians), that doesn’t much matter. Very few of those hapless workers will pin the blame on them for the loss of jobs and besides, the unemployed are the natural constituency for Democratic rhetoric about the need to “build an economy that works for everyone.” Therefore, there is little if any political downside.

Ben Zycher bemoans bureaucrats’ and politicians’ insistence on pushing electric cars on a public that doesn’t really want such vehicles.

Should conservatives favor child allowances? Tune in this afternoon from 2:30pm to 4:30pm, EST, for a discussion.

Here’s the 11th installment in George Selgin’s important series on the New Deal.

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