My January 24, 2021 letter to President Joe Biden, Milton Friedman noted, “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.”

Ep. 4 – From Cradle to Grave [6/7]. Milton Friedman’s Free to Choose (1980)

January 24, 2021

President Biden c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Thank you for taking time to have your office try and get a pulse on what is going on out here in the country.

I read this article on January 15, 2021 about your announcement the previous night concerning your first proposal to Congress.

Biden’s $1.9 Trillion COVID Relief Package Includes More Stimulus Checks, State Government Bailout, $15 Federal Minimum Wage

President-elect Joe Biden called Thursday night for a $1.9 trillion COVID-19 package that will include another round of relief checks for most Americans, a bailout for state and local governments, boosted unemployment payments, and a higher federal minimum wage.

Biden is also proposing $170 billion to assist in reopening schools and a $350 billion bailout of state and local governments. And on top of all that, Biden called for raising the national minimum wage to $15 an hour.

Those last two details may be the most contentious details. Democrats pushed for a similar bailout in earlier negotiations over COVID stimulus bills, but Senate Republicans blocked them. Democrats will have a slim Senate majority once the winners of two Georgia run-off elections are sworn-in, but the case for a state bailout remains shaky.

Democrats may still need Republican votes for much of Biden’s plan. The reconciliation process could be used to amend existing tax and budget matters with a simple majority vote in the Senate—perhaps to do something like adjusting the amount of the child tax credit—but relief checks and a state government bailout will likely require 60 votes.

The big unanswered question is how Biden plans to pay for it all. Thanks to years of poor budgeting and overzealous spending by Congress and President Donald Trump, America faces a $3 trillion budget deficit and a national debt that’s zooming towards $30 trillion. An additional $1.9 trillion will only add to the nation’s already overburdened credit card.

Biden did not address plans for spending offsets or tax increases in his speech. An unnamed Biden official told The Wall Street Journal on Thursday that the president-elect did not believe now was the time for worrying about widening budget deficits and that Biden’s focus was on the more immediate emergency.

Previously, Biden has indicated that he will push for higher taxes on corporations and on individuals making more than $400,000 annually.

But near-universal $1,400 checks are not good policy, no matter how popular they might be. States and local governments have the ability to make their own taxing and spending decisions and should not expect or require federal aid—and certainly not when the federal government is in such dire fiscal straits on its own. And ambitious plans to increase social spending and hike wages that don’t have anything to do with the pandemic should be considered separately.

I wanted to let you know what I think about the minimum wage increase you have proposed for the whole country and I wanted to quote Milton Friedman who you are familiar with and you made it clear in July that you didn’t care for his views! Let me challenge you to take a closer look at what he had to say!

Joe Biden’s $15 minimum wage hike would kill 2 million jobs, new study shows

October 21, 2020 – 4:34 PM

Tens of millions of workers are unemployed right now as the economy struggles to rebound from the COVID-19 crisis and ensuing government lockdowns. But if Joe Biden and Democrats sweep the board in November, even more people could find themselves out of jobs at the worst possible time.

Remember, the “moderate” Democratic presidential nominee has endorsed a $15 federal minimum wage. Meanwhile, House Democrats have already passed a bill that would mandate a $15 hourly rate in all 50 states, even those where it would constitute a more than doubling of the current minimum wage. And a new analysis by the fiscally conservative Employment Policies Institute finds that enacting this proposal would destroy 2 million jobs by 2027.

“Texas projects to have the highest losses, totaling over 370,000 jobs lost by 2027,” the report finds. “Pennsylvania, Florida, North Carolina, Ohio, and Georgia are all expected to see over 100,000 jobs lost in the next six years as well.”

The two economists who authored the study, William Even of Miami University and David Macpherson of Trinity University, also conclude that the job losses from a $15 minimum wage would disproportionately hurt young people and women. Of all the impacted jobs currently filled by African Americans, 9% would be eliminated entirely.

This shouldn’t come as a surprise. As free-market economist and Nobel laureate Milton Friedman once wrote, “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.”

It’s easy to understand the basic economics of why minimum wage laws don’t work. Here is economist Thomas Sowell: “By the simplest and most basic economics, a price artificially raised tends to cause more to be supplied and less to be demanded than when prices are left to be determined by supply and demand in a free market,” he writes in his book Basic Economics. “The result is a surplus, whether the price that is set artificially high is that of farm produce or labor.”

Think about it like this: What would you do if the government passed a mandate tripling the price of a household good? You would buy less of it, of course, because the previous market price was representative of what that product was actually worth to consumers like you.

And don’t think that this new study is some outlier either. A 2019 survey, also conducted by the Employment Policies Institute, revealed that 3 in 4 economists oppose increasing the minimum wage, even though most respondents were registered Democrats or independents.

Moreover, a research review by the Cato Institute concluded, “The main finding of economic theory and empirical research over the past 70 years is that minimum wage increases tend to reduce employment.”

As the Washington Examiner’s Tiana Lowe has noted, even the nonpartisan Congressional Budget Office has projected millions of jobs lost nationally from a federal $15 minimum wage.

Oh, and it’s not as if a $15 minimum wage is the only disastrous economic policy Biden is running on — not even close. In fact, a Stanford study just found that the Democrat’s confiscatory tax policies and harsh regulatory regime would destroy 5 million jobs and reduce median household income by $6,500. And that’s to say nothing of Biden’s support for anti-gig economy legislation that would make millions of people’s flexible livelihoods illegal.

In spite of all this, Biden has campaigned on the notion that he alone can steer the country back from the COVID-19 downturn and that he cares about blue-collar workers. Maybe if Biden ever comes out of his basement, someone will force the candidate to explain why he’s running on a platform that would wipe out millions of jobs with the stroke of a pen.

Brad Polumbo (@Brad_Polumbo) is opinion editor at the Foundation for Economic Education and a Washington Examiner contributor.

_____________

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.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5
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