Sunday, July 22, 2007

P.J. O Rourke On Minimum Wages

Like everyone else, I have been basically forced to switch from VHS to DVD format with regards to new movies, but since I've got dozens of old VHS tapes with a lot of stuff I want to keep I have a dual VHS/DVD format VCR. Anyway though, I have in many cases not been so good in writing down what I have on what VHS cassette so I have now started a project to look through them all, a project which will likely take some time before it's finished since again we're talking about dozens of 4-hour tapes.

In one of the tapes I recently looked through I saw a really great old clip from 60 minutes. Next week, America will see its first increase the minimum wage for a decade. Because the real value of it is still relatively low both in historical terms and compared to other countries, I don't think it will do much damage. But it will certainly do even less good, and the net effect, while small, will certainly be negative. The clip in question featured a short duel with first an opponent holding a monologue against the increase and then a supporter holding a monologue in favor of the increase.Libertarian-conservative humorist P.J. O'Rourke had been chosen to argue against an increase and now deceased left-liberal Molly Ivins had been chosen to argue for it. Ivins had no real strong arguments and simply argued against O'Rourke's arguments below that "free market fundamentalism is as dead as the dodo. We had this debate a 100 years ago, and the good guys won". The only thing resembling a factual argument was denying O'Rourke's argument that wage increases means fewer jobs with this line "if this were true, how come we have so many CEO:s around? Their salaries have sky-rocketed". A rather pathetic argument as it of course overlooks that pay increases driven by rising marginal productivity will not be empirically associated with the same change in employment as pay increases mandanted by government (or union) decree. O'Rourke on the other hand was really good arguing:

"Why is Congress even debating the minimum wage? Where does the constitution say that government sets the price of delivering pizza? And if government knows the best price of everything, then how come the B-1 bomber cost so much? And if minimum wage laws work, why fool around? Why not make it a thousand an hour? Molly, if workers are more expensive fewer workers are hired. I wish this weren't so. I also wish I could wear the same size jeans I wore in College. Free market value isn't good or bad, it's a measurement. Laws won't fix it. We can pass a law saying a foot has ten inches*. I put a tape around my waist-same size jeans I wore in College! But the gut is still there. Raise the minimum wage, pay goes up a little, prices goes up and poor people are back where they started. But liberals feel good, which is of course the whole point of government. If we want to help the working poor, we should cut sales taxes, cut gas taxes, cut farm subsidies that keep food prices high. And get rid of all the nonsense regulations, such as minimum wage laws, that just keeps poor people from starting businesses and getting richer".

*=To those used to the metric system of measurement it should be pointed out that a foot currently has twelve inches.


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