Open letter to President Obama (Part 468)
(Emailed to White House on 4-9-13.)
President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500
Dear Mr. President,
I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.
State of the Union 2013
Published on Feb 13, 2013
Cato Institute scholars Michael Tanner, Alex Nowrasteh, Julian Sanchez, Simon Lester, John Samples, Pat Michaels, Jagadeesh Gokhale, Michael F. Cannon, Jim Harper, Malou Innocent, Juan Carlos Hidalgo, Ilya Shapiro, Trevor Burrus and Neal McCluskey respond to President Obama’s 2013 State of the Union Address.
Video produced by Caleb O. Brown, Austin Bragg and Lester Romero.
Nobel laureate economist Milton Friedman observed: “The real tragedy of minimum wage laws is that they are supported by well-meaning groups who want to reduce poverty. But the people who are hurt most by higher minimums are the most poverty stricken.”
Economic research has only a tenuous relationship to economic policymaking in Washington. President Obama’s new proposal to raise the federal minimum wage from $7.25 to $9.00 is a case in point. It would bad for workers and the economy, but the administration seems to be ignoring the large body of theory and evidence on the issue.
Labor economist Mark Wilson discusses the economics of the minimum wage in an essay on Downsizing Government. Here are a few highlights:
There is no free lunch when the government mandates a minimum wage. If the government requires that certain workers be paid higher wages, then businesses make adjustments to pay for the added costs, such as reducing hiring, cutting employee work hours, reducing benefits, and charging higher prices.
The main finding of economic theory and empirical research over the past 70 years is that minimum wage increases tend to reduce employment. The higher the minimum wage relative to competitive-market wage levels, the greater the employment loss that occurs. While minimum wages ostensibly aim to improve the economic well-being of the working poor, the disemployment effects of a minimum wages have been found to fall disproportionately on the least skilled and on the most disadvantaged individuals, including the disabled, youth, lower-skilled workers, immigrants, and ethnic minorities.
Nobel laureate economist Milton Friedman observed: ‘The real tragedy of minimum wage laws is that they are supported by well-meaning groups who want to reduce poverty. But the people who are hurt most by higher minimums are the most poverty stricken.’
In the American economy, low wages are usually paid to entry-level workers, but those workers usually do not earn these wages for extended periods of time. Indeed, research indicates that nearly two-thirds of minimum wage workers move above that wage within one year.
While they are often low-paid, entry-level jobs are vitally important for young and low-skill workers because they allow people to establish a track record, to learn skills, and to advance over time to a better-paying job. Thus, in trying to fix a perceived problem with minimum wage laws, policymakers cause collateral damage by reducing the number of entry-level jobs.
As Milton Friedman noted, ‘The minimum wage law is most properly described as a law saying employers must discriminate against people who have low skills.’
I have put up lots of cartoons from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism, Greece, welfare state or on gun control.
My Cato colleague, Mark Calabria, recently explained how the minimum wage destroys jobs, and I’ve written on several occasions why government-mandated wages can create unemployment by making it unprofitable to hire people with low work skills and/or poor work histories. And I’ve attacked Republicans for going along with these job-killing policies, and also pointed out the racist impact of such intervention.
But this cartoon may be a more effective argument for getting government out of the business of interfering with market forces. It’s simple, direct, and gets the point across. I’m not sure that always happens with my writing.
My former intern, Orphe Divougny, also did a very good job in explaining why politicians shouldn’t interfere with the right of workers and employers to enter into labor contracts.
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, email@example.com
“Friedman Friday” EPISODE “The Power of the Market” of Free to Choose in 1990 by Milton Friedman (Part 5)
Milton Friedman The Power of the Market 5-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms. I wanted to share this info below with you from Milton Friedman who has influenced me greatly over […]
Dear Senator Pryor, why not pass the Balanced Budget Amendment? (“Thirsty Thursday”, Open letter to Senator Pryor)
House Republicans for a Balanced Budget Amendment Uploaded by HouseConference on Nov 17, 2011 This week, House Republican freshmen Members held a press conference to discuss the importance of passing a balanced budget amendment to the United States Constitution and how now is the time for a permanent solution to our nation’s spending-driven debt crisis. […]
Listing of transcripts and videos of Free to Choose by Milton Friedman: Episode “Created Equal” on www.theDailyHatch.org
Milton Friedman in his series “Free to Choose” used a pencil as a simple example to should have the “invisible hand” of the freemarket works (phrase originally used by Adam Smith). Here are some great quotes about Milton Friedman: “Milton Friedman is a scholar of first rank whose original contributions to economic science […]
Listing of transcripts and videos of Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” on www.theDailyHatch.org
Everywhere school vouchers have been tried they have been met with great success. Why do you think President Obama got rid of them in Washington D.C.? It was a political disaster for him because the school unions had always opposed them and their success made Obama’s allies look bad. In 1980 when I first sat […]
“Friedman Friday” EPISODE “The Power of the Market” of Free to Choose in 1990 by Milton Friedman (Part 4)
Milton Friedman The Power of the Market 4-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms. I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]
Milton Friedman was a man of common sense and great foresight. What he said in 1999 has come to pass and the Cato Institute article on 1-28-13 pointed that out. Updated January 28, 2013, 1:05 a.m. ET Silicon Valley’s ‘Suicide Impulse’ The industry’s affection for Washington keeps growing. Facebook had 38 lobbyists working in 2012. It’s a measure of […]
Listing of transcripts and videos of “Free to Choose” episode 4 – From Cradle to Grave on www.theDailyHatch.org
In the last few years the number of people receiving Food Stamps has skyrocketed. President Obama has not cut any federal welfare programs but has increased them, and he has used class warfare over and over the last few months and according to him equality at the finish line is the equality that we should […]
Milton Friedman – Socialism is Force Uploaded by LibertyPen on May 21, 2010 Milton Friedman discusses the moral values encouraged by economic systems and explains that a primary difference between capitalism and socialism is the difference between free choice and compulsory force. ________________ President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, […]
Milton Friedman – Public Schools / Voucher System (Q&A) Part 2 Published on May 7, 2012 by BasicEconomics __________ Max Brantley of the Arkansas Times Blog is always critical of the voucher system but has he taken a closer look at what has been going on in the public schools the last few decades with […]