My February 5, 2021 letter to President Joe Biden, Nobel Prize winner Milton Friedman once heard a Third World bureaucrat, suffering from this fallacy, defend his decision to have poor workers dig a massive canal with shovels rather than earth movers because that meant more jobs. Friedman quipped: “Why don’t you replace their shovels with spoons?“

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

February 5, 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

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.

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!

$15 minimum wage: Good intentions can’t drive economy

Gov. Jerry Brown sounded ambivalent when he recently signed a law raising the state’s minimum wage to $15 per hour. “Economically, minimum wages may not make sense,” Brown said as he signed the law.

Some academics now claim that small hikes in the minimum wage are not harmful, but few believe that anything more than 50 percent of the median wage – which means a little over $8.70 an hour – would be beneficial.

And a $15 minimum wage – equal to 86 percent of America’s median wage, and the highest in the Western world – would almost certainly kill jobs.

But minimum wage enthusiasts aren’t just ignoring the idea of potential job losses, they are making other extravagant claims.’s Matthew Yglesias, for example, claims that raising the cost of hiring workers and rendering them jobless wouldn’t be a bad thing because it would force companies to invest in labor-saving technologies. Nobel Prize winner Milton Friedman once heard a Third World bureaucrat, suffering from this fallacy, defend his decision to have poor workers dig a massive canal with shovels rather than earth movers because that meant more jobs. Friedman quipped: Why don’t you replace their shovels with spoons?

If Friedman were alive today, he would ask Yglesias why, by his logic, he doesn’t just ban all manual labor.

Michael Reich, an economist at UC Berkeley, claims a $15 minimum wage would actually stimulate the economy, resulting in job gains in the long run. “They’d [employees] have more money to spend, the overall level of demand for goods and services would be higher, and so would the level of employment,” he insists.

But shifting wealth around doesn’t generate real economic growth – boosting productivity does. Indeed, ordering employers to give artificial raises means that employers would have less money to spend or invest, canceling out any extra spending by workers.

Advocates of raising the minimum wage also claim that welfare programs end up subsidizing the low-wage workforce, and forcing companies to pay something resembling “living” wages would diminish low-wage workers’ dependence on government programs.

However, this assumes that boosting the minimum wage would hand more workers a raise than it would throw out of work. Indeed, there will be no less strain on welfare programs if the probability that a family will escape poverty due to higher wages is offset by the probability that another family will enter poverty because it has been priced out of the labor market and can’t find employment.

The core fallacy in this line of reasoning is that employers can set wages based on employee needs rather than market forces. That, however, is not how things work, especially in a globalized world where forcing employers to cough up wages higher than the market can bear can undermine their competitiveness – not something that helps anyone in the long run.

Gov. Brown’s instincts were right: Raising the minimum wage doesn’t make sense economically. Brown said the increase made sense “morally and socially,” but California may soon find that good intentions can’t alone power an economy.

Shikha Dalmia is senior policy analyst at Reason Foundation and a columnist for The Week.


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

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