Minimum Wage Laws

Posted on by Abhi Sivasailam

Over at Mises Daily, Art Carden revisits the harmful effects of minimum wage laws and cites a Show-Me Institute study to do so:

Suppose that a job can be done by either three unskilled workers or two skilled workers. If the unskilled wage is $5 per hour and the skilled wage is $8 per hour, the firm will use unskilled labor and produce the output at a cost of $15. However, if we impose a minimum wage to $6 per hour, the firm will instead use two skilled workers and produce for $16 as opposed to the $18 cost of using unskilled workers. In the “official data” this shows up as a small job loss — in this case, only one job — but we see an increase in average wages to eight dollars per hour in spite of the fact that the least skilled workers are now unemployed.

I am in favor of helping the poor, but minimum wage laws — striking examples of the law of unintended consequences at work — are not the best tools to address the plight of the working class. As Carden notes, wage floors create unemployment for low-skilled workers. But earning a low wage would be better than no wage at all. Further, wage floors create deadweight losses through inefficiency, strain employer-employee relations, and foster the emergence of black markets in labor.

Wage floors are supported by people with the noblest intentions and the poorest reasoning. Proponents would do well instead to support education, skills training, and expansion of market opportunities through deregulation as better mechanisms to alleviate lower class struggles without the sting of such harmful unintended consequences.

Policy Pulse Updates

Posted on by Abhi Sivasailam

Over at our Policy Pulse portal, staff reporter Audrey Spalding has published several recent articles about education issues in Missouri.

This past week, Audrey has explored how recent school board meetings have not led to a resolution for teacher negotiations in the Lindbergh School district, how recent state legislation has affected Lindbergh’s budget, and how that same legislation threatens to choke funding to 23 St. Louis County school districts.

Please stay tuned to Policy Pulse as we continue to promote government transparency, civic participation, and policy analysis.

Blue on the Boys’ Wall, Yellow on the Girls’ Wall

Posted on by Sarah Brodsky

The Panama City Renaissance School blog links to an article in the Las Vegas Sun about same-sex public education. The article quotes the usual experts for and against single-sex schooling. Then it concludes with this on-target quote from a parent:

“I don’t know if boys and girls really do learn differently — I know that’s the theory,” Curiel told the Sun as he dropped Eric off for class. “But whatever it is, it’s working.”

Experts on the both sides make the mistake of overgeneralizing. Single-sex education proponents claim, for example, that all boys should learn in classrooms painted certain colors because the average boy reacted better than the average girl to that color in a research study — never mind that wall color may not affect achievement, or that individual boys have different color preferences. On the other hand, critics of single-sex education rally against the perceived unfairness of separate classes, dismissing the fact that some students have had good experiences with single-sex schooling.

One system wouldn’t work for everyone, but it’s better when people have a choice.

Political Fix and “Saturday Night Live”

Posted on by David Stokes

I was blessed with a pretty good memory, especially for words and numbers — less so for faces. So when I read this headline at the Post-Dispatch‘s “Political Fix” blog, it instantly reminded me of this “Saturday Night Live” skit from 20 years ago. My memory had it that John Goodman was in the sketch, not John Larroquette, but other than that, I was right on.

Perhaps I confused the two because they each have a St. Louis connection. If you can tell me what that connection is in the comments, you will win my praise (but nothing else).

The Missouri Plan

Posted on by Caitlin Hartsell

John Combest recently posted a couple of articles about Better Courts for Missouri’s attempt to change the Missouri Plan, the current method for choosing justices for the state courts. The Missouri Plan, in theory, is supposed to take the politics out of the process of judicial selection: A panel, mostly comprised of lawyers, submits three nominations to the governor, who selects from those three. After a year, the judge stands a “retention” election. Better Courts for Missouri argues that this process is too secretive and heavily favors trial lawyers.

Show-Me Institute scholars have written about this topic before, discussing benefits of the Missouri Plan as measured by a few particular metrics.

Findings from the Show-Me Institute’s 2008 study of judicial selection have been misinterpreted by proponents of the Missouri Plan who have drawn broad conclusions about its positive effects on the economy based on the study’s relatively narrow, caveated data set. The authors of the study, economists Joshua Hall and Russell Sobel, stipulated that the criteria they used to determine the effects of judicial selection mechanisms on economic growth amounted to a limited methodology. They concluded that although it appeared variants of the Missouri Plan tended to correlate with better economic growth than states using partisan or nonpartisan elections, it might be possible to make minor improvements to the process, such as adding legislative oversight. Although Hall and Sobel’s data provided a useful glimpse at the effects of the Missouri Plan from one particular angle, other future studies analysing different sets of source material might arrive at somewhat different conclusions.

Hopefully, Better Courts for Missouri will take as many of these factors into account as possible as they work toward a solution that brings increased transparency to judicial selection in Missouri.

Thoughts on Liberating Learning: The Politics of Blocking

Posted on by Sarah Brodsky

This chapter of Liberating Learning describes the political process of education reform. In a nutshell, new practices like merit pay and parental choice threaten teachers’ unions, so the unions do all that’s in their power (and they have a lot of power) to prevent them from taking root. If a significant reform makes it through the political process, unions challenge its legality in the courts.

The authors stress how unions would lose out if public schools became more competitive and efficient. I think they would agree, though, that virtual schools, charter schools, and other new developments in the education market have the potential to help teachers as individuals. The catch, from the unions’ point of view, is that not all teachers would gain in the same way. Good teachers would earn more. The best would have new opportunities for career advancement; an example of this appears in the very beginning of the next chapter, “Technology on All Fronts,” where the authors tell the story of a teacher who goes into curriculum development after helping to create a successful online charter school.

Teachers would depend less on unions if schools competed to offer them better pay and benefits. They might also consider which schools would suit their teaching style — virtual vs. in person would be just one choice they could make. Instead of asking, “Will the union negotiate the best deal for me and everyone else?” teachers would ask, “Which combination of work environment and pay would be best for me personally?” Then unions would lose members, dues, and power.

Promoting Job Cuts, 20 Cents at a Time

Posted on by Caitlin Hartsell

This week, the federal minimum wage will rise to $7.25, which is 70 cents higher than the previous national minimum and 20 cents higher than the current minimum in Missouri. Advocates of the minimum wage hike ostensibly intend to create a “living wage” for the poor, but there are some significant unintended consequences: Minimum wage policy raises costs for businesses and creates economic pressure for them to hire less low-skilled labor.

As the Show-Me Institute has cited in several studies and articles about the effects of minimum wage on the labor market, most people in minimum wage jobs are not in the poorest brackets — many are teenagers who live with their parents, or are people with wealthier spouses.

Those in the poorest brackets and at minimum wage level tend to be predominantly low-skilled workers. When the minimum wage is increased and employers are forced to scale back their hiring, the poorest low-skilled workers tend to lose their jobs as employers choose between them and teenagers from mostly middle-income backgrounds. Minimum wage increases also raise the cost of goods, which harms poorer families disproportionately. Essentially, minimum wage function as an additional tax on the poor.

Any time that the minimum wage is raised, but especially during a recession, the people hurt the most are the lowest-skilled workers — the very same people these raises are supposed to help. If Missouri wants to help its poorest workers, lowering mandated minimum wage levels (or eliminating them entirely) would help tremendously.

Should There Be an Age Restriction for Hunting?

Posted on by David Stokes

The urbanites that run MSNBC are apparently shocked that young people in America are allowed to hunt all by themselves. Can you believe this? Kids are actually allowed to use guns and hunt animals without a parent or guardian around in many states. (In Missouri, which is covered in the story, you only have to be 11 years old to be able to hunt on your own.) How terrible.

Of course, they found a tragedy that they’ve used as the basis for an argument that kids should hit a certain age before they are allowed to do something that kids in America’s rural areas have been doing for hundreds of years. From the story:

On the national level, Guzzo’s comments won support from Jim Kessler, policy director and co-founder of the progressive think-tank Third Way who previously spent four years at Americans for Gun Safety. Both groups seek tighter gun laws but are not opposed to hunting.

“I find it shocking actually that there aren’t laws that prohibit unsupervised hunting by minors,” said Kessler. “For a lot of families, hunting is passing on values from fathers to sons and it’s about responsibility and there are a lot of good lessons there, but it is far too much responsibility to give to a child or a minor teen, far too much responsibility. You need an adult there.”

There are tragic accidents in every aspect of life. The young man who committed the manslaughter prompting the article will pay a price for it. It seems most people see a tragedy and try to make laws to restrict the rights of others in order to prevent another tragedy, no matter how small the odds may be that the law will actually prevent a similar future tragedy. Maybe I am a jerk, but I get offended when people try to use a tragedy to limit the freedoms of others.

And I don’t mean to make fun of MSNBC. The story is interesting and the survey informative. I just don’t see a need for Missouri to increase its age limit because of one terrible incident.

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