Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at intelligent and rational individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

"Observe that the 'haves' are those who have freedom, and that it is freedom that the 'have-nots' have not." Ayn Rand

"The virtue involved in helping those one loves is not 'selflessness' or 'sacrifice', but integrity." Ayn Rand

For "a human being, the question 'to be or not to be,' is the question 'to think or not to think.'" Ayn Rand
Showing posts with label economic freedom. Show all posts
Showing posts with label economic freedom. Show all posts

25 August 2022

The Anti-Economic Freedom Party

The Club for Growth rates each member of Congress annually for their commitment to economic freedom and growth.  The 2022 ratings are not available, since the 2022 sessions are still underway.  The 2021 session ratings for the House of Representatives, controlled by a Democratic Party majority, are available here.  There are some very important lessons to keep in mind for the 2022 mid-term election coming up.

First, lets get the Big Picture View:


Republican Rating Breakdown:

28 earned 100% rating

79 earned 90-99% ratings

74 earned 80 - 89% ratings

19 earned 70 - 79% ratings

7 earned 60 - 69% ratings

3 earned 50 - 59% ratings

1 earned 40 - 49% rating


Democrat Rating Breakdown:

7 earned 10 - 19% ratings

3 earned 1 - 9% ratings

210 earned 0% rating


First Observation:  It is most remarkable that all but 10 Democrats had a 0% rating on economic freedom and growth, making the median Democrat rating 0%.

Second Observation:  The entire range of Democrat ratings was between 0 and 17%.  Democrats are extremely united in their opposition to economic freedom and growth.

Third Observation:  Republicans range from 48% to 100%.  There are Republicans who are not highly committed to economic freedom and growth.

Fourth Observation:  Democrats universally move in lock-step with Nancy Pelosi and her 0% rating, with a very few symbolic instances of rebellion, often because Nancy Pelosi was not thought to be as strongly anti-economic freedom as the Democrat wanted her to be.  Examples -- Ilhan Omar 13%, Alexandria Ocasio-Cortez 10%, and Rashida Tlaib 10%.

Many of these 0% Democrats will tell you they favor capitalism over socialism, but that is a lie.  They are adamantly anti-economic freedom.  They are universally in agreement that we should be driven into energy poverty.  They are universally in agreement that we should be hounded by IRS agents armed to the teeth and wasting many tens of hours of our time, with horrible economic costs.  They are universally in favor of ever more regulations weighing down small businesses.  They are universally in favor of mandating our subservience to corrupt union bosses.  They are universally determined to force our children to go to government-run schools where they are besieged with propaganda in favor big government as a supposed protection against immoral businessmen, never mind the immorality of politicians and bureaucrats.  Many of these Democrats believe the Earth cannot sustain its 8 billion people and are so anti-human as to suggest that we need to reduce the human population!  How can they make that happen?  

Simple -- destroy the capitalist private sector that provides us a high standard of living by putting it completely under the control of politicians, bureaucrats, experts in universities, and union bosses.  With the exception of a good fraction of the Republican politicians, these groups are in it only so they can exercise their own power lust.  They long for the control of the old Medieval aristocracy and clergy over the impoverished serfs.  But now with the establishment of huge databases of information on each of us, they can classify us as being in their camp as fellow elitists, in their camp as deceived dependents, or as their opposition -- that is as The Deplorables.  It is The Deplorables who want freedom and in the context of an increasingly authoritarian government, we are the Rebels.  Biden just called us near Nazis, revealing his total ignorance and transferring to us his own behavior and motivations.  Biden and the Democrats in the House of Representatives see eye to eye.  Economic freedoms must be suppressed in order that they can micromanage our lives and make us their serf slaves.

Of course our freedom of speech, freedom to write and read, freedom of assembly, freedom of conscience, and freedom of association are all also being ever more restricted too.  The Elite aristocracy cannot allow these freedoms either, because they can be used by the rebellious freedom-lovers to deny them power.



18 July 2019

Government is a great servant but horrid master by Jeffrey Foss

Today bigger, supremely powerful global governments are justified by environmental claims

Jeffrey Foss

Through the ages, the suffering, destruction and murder perpetrated by governments like those of Caligula, Hitler, Stalin, Mao, Pol Pot, Castro and their ilk reduces the evil of common criminals like Al Capone, Daniel Ortega, Bernie Madoff and El Chapo to the scale of breaking wind at Sunday dinner.

There is a historical lesson here for any of us who would entrust our sustenance, security and happiness to government. History teaches us that when governments go bad, they can really stink – enough to make us ashamed of our very species. But the more we entrust to government, the bigger it gets; and the bigger it gets, the more likely it is to become our ill-odored, malignant master, instead of our servant or helper.  

Governing is all about power, of course. Otherwise the governed would not obey, and anarchy would ensue, assuming it wasn’t there already. Thus the first power of government must be the appropriation of violence (such as imprisonment, torture and execution) unto itself for its sole use. All other forms of violence are outlawed.

If you or I kill someone, that is murder, which is illegal. But when government kills someone, it is execution or warfare, which is perfectly – and ever so conveniently – legal. If we take money from someone by force or stealth, that’s theft, But when government does likewise, it’s taxation, fees or fines. If I break into your house, I do not pass Go, I do not collect $200, I go straight to jail. If government breaks into my house, they get the police (or even a SWAT team) to do it.

All governments are born in sin: the appropriation of overwhelming power. Power doesn’t immediately or necessarily entail evil, of course. Power can be used for good. But misuse of power is as seductive as Delilah sitting at the side of the bed.

So government must be controlled, like the powerful beast it is, by putting a ring though its nose. The genius of democracy is that it ties that ring by millions of strings to the hands of ordinary people like you and me, by our votes. By pulling together we can control the beast – unless we let it get too dang big, or we get divided into one faction that wants small, controllable government and another that wants free stuff and payment for not working, courtesy of legalized government theft and violence against others.

So our first rule must be to vote for less government, not more. Note well that, by a cruel irony of fate, the so-called Democratic Party, which advertises itself as the champion of the powerless, is for ever-bigger government. Note also that the Republican Party, the party of Lincoln that freed the slaves, is for less.
    
To be clear as blue skies, I am not arguing against government. Far from it. Government is necessary. Good government is a wonderful servant: it lubricates our cooperation while putting a lid on our violence as we procure food, clothing, shelter, safety and (if we engage in the proper pursuits) happiness.

If you take a look at what’s around you, you made or created little or nothing. Others made it for you, just as you make things for them, in a system of cooperation involving money, banks, sales, purchases, property, mutual benefit and so on. This system gives us virtually everything we have.

History and observation teach that democratic governments linked to economic freedom have excelled in helping us produce the plenty we now enjoy. Our form of democratic, republican government, relative to every other form that has ever existed, is best at serving the people.
But government can also be a horrible master. The reason people outside the developed democracies do not enjoy the health, wealth and happiness we have is that their governments suffer from the disease universally endemic to government: serving itself to achieve its own goals.

It is no accident that the government atrocities of Stalin, Mao and their ilk were inflicted on their own citizens. These leftist governments gained and sustained power by claiming they cared deeply about the people and pretending the vice of envy is really a virtue. They thereby instigated hatred of the rich by the poor, hatred of the successful by the unsuccessful, hatred of the happy by the discontented. Weakened by internal conflict, the people were readily conned into domestic and foreign wars both hot and cold, and into bizarre economic experiments. Over 100,000,000 were starved, murdered or worked to death.

By yet another cruel irony of fate, the poor were the main victims. Stalin, for instance, reorganized millions of previously successful farmers into communes, and then starved them to death when they were bold enough to protest that farming itself was being destroyed. Those citizens he permitted to live did so in despicable poverty and fear, while Stalin himself spent his days in the palaces of the Czars, the very people he reviled, strutting about like a toy soldier, grinning like the cat that ate the canary.

Today we are told even vastly bigger government is needed – at a global level – to protect planet and civilization from the ravages of fossil fuels, runaway climate change and big evil corporations.

We already see this eco-imperialism imposed on billions of people, who are told they develop as they wish, use fossil fuels or improve their health and living standards more than a trifling bit. As the globalist ruling elites gain ever more power, they are demanding that citizens of already developed countries reduce their living standards, stop driving cars and flying airplanes, and eat insects and organic vegetables instead of meat or conventional foods. Of course, like Stalin, the ruling classes would exempt themselves from the diktats and penalties they impose on the masses.

Let there be no doubt: history teaches there are two keys to the levels of health, wealth and happiness that we humans have so far achieved. The first is democracy: putting government under our control. The second is freedom to make our own economic choices, to work for whom we choose, to own property, and to start businesses if we like, without being smothered by endless regulations, paperwork and taxes.

But keeping government under control isn’t easy. Government power stealthily increases, even in democracies. As Figure 1 shows, the growth of US government has been relentless, creeping and sneaky since the halcyon days when the Original Colonies first cut off the chains of monarchy. 
The graph shows that government’s share of all the money made in the country has steadily increased from about 3% in 1790 to over 40% today. Who can doubt that government had less power in 1790 than it does now? Or that the people rebelled over far less odious usurpations than they face today?

Those who lean left preach that there are good reasons for us to envy and revile the rich – indeed, anyone in the arbitrarily designated 1% of top earners. But by a stroke of unparalleled self-deception they refuse to see that this same logic applies with its ultimate force to big-spending, big-taxing, big-borrowing, big-leftist government itself.

So if you are tempted by some politician’s promise to play Robin Hood for you, you are being fooled. Politicians may pretend to be Robin, but under their disguise of forest green you will always find the evil Sherriff of Nottingham and his taxman. And what honor is there in getting someone to steal for you?

It is wrong for any of us to envy, revile or hate the rich simply because they are rich. We should instead rejoice in the success of law-abiding people like Bill Gates, Warren Buffet and Stewart Butterfield (my former student, Canadian entrepreneur and midwife of Flickr and Slack). They are beacons of hope. 

Those decent people among us who legally acquire a few millions or billions of dollars to pose against the many trillions of dollars taken from us by government are like those 1776 colonists, who rose up against King George III, wrote a Declaration of Independence and Constitution that set down their inspirations, aspirations, and belief in God, unalienable natural rights, and small government with limited powers, intentions and instruments of taxation and suppression.

They show us that we too can get ahead, be free and prosper with limited government that understands its proper role.

Dr. Jeffrey Foss is a philosopher of science, Professor Emeritus at the University of Victoria, Canada, and author of Beyond Environmentalism: A Philosophy of Nature.


FIGURE 1. Growth of U.S. government, 1790 to 2016.

Comment by Charles:  I have posted this article at the request of Paul Driessen.  Jeffrey Foss understands the threat of big government very well.


02 November 2014

Do the Democrat Senators in Close Elections Disagree with Obama or Each Other?

We are hearing constantly about how Democrat Senators up for re-election and other Democrats who are trying to move to the Senate from the House are distancing themselves from Obama and Harry Reid.  Some will not say that they voted for Obama and others try to claim that they have some significant differences with him.  Every Democrat Senator up for re-election voted for the PPACA or ObamaCare.  They all claimed the government owns every American's body and mind and gets to dictate how we will care for the government's property.  Without a clear title to self-ownership, all individual rights become a sham, which is why Saul Alinsky and every serious socialist wants government control of healthcare.

One of the most notable traits of Democrats in the Senate and House is that they all vote in very nearly lock-step with their leadership, however they may talk more independently when they visit their constituents in their home state.  What goes on in Washington, DC stays in DC.

The Club for Growth keeps a scorecard on how Senators and Representatives vote on issues affecting economic freedom, taxation, and spending.  A 100% rating would be held by someone who they believe voted correctly on all the votes they score.  Some of the Senators with high scores are:

Sen. Ted Cruz, Republican, Texas, 100% in 2013, 100% lifetime
Sen. Mike Lee, Republican, Utah, 100% in 2013, 100% lifetime
Sen. Rand Paul, Republican, Kentucky, 97% in 2013, 99% lifetime

In comparison, Senator Harry Reid's lifetime score is 5% and Rep. Nancy Pelosi's lifetime score is 7%.

So, let us examine the scores of the candidates running for the competitive Senate seats who have such voting records.

Alaska, Sen. Mark Begich, Democrat, 3% in 2013, 6% lifetime

Arkansas, Sen. Mark Pryor, Democrat, 12% in 2013, 16% lifetime
                 Rep. Tom Cotton, Republican,  92% in 2013, 92% lifetime

Colorado, Sen. Mark Udall, Democrat, N/A in 2013 (skipped too many votes), 8% lifetime
                 Rep. Cory Gardner, Republican, 69% in 2013, 75% lifetime

Iowa, Rep. Bruce Braley, Democrat, 6% in 2013, 1% lifetime, worst record of current Iowa Reps.

Kansas, Sen. Pat Roberts, Republican, 84% in 2013, 74% lifetime

Kentucky, Sen. Mitch McConnell, Republican, 87% in 2013, 85% lifetime

Louisiana, Sen. Mary Landrieu, Democrat, 8% in 2013, 15% lifetime
                  Rep. Bill Cassidy, Republican, 64% in 2013, 76% lifetime

Michigan, Rep. Gary Peters, Democrat, 3% in 2013, 8% lifetime

Minnesota, Sen. Al Franken, Democrat, N/A in 2013 (skipped too many votes), 2% lifetime

New Hampshire,  Sen. Jeanne Shaheen, Democrat, 3% in 2013, 7% lifetime
                             Sen. Scott Brown, Republican, 62% in 2010, 49% in 2011 (Massachusetts)

North Carolina, Sen. Kay Hagan, 3% in 2013, 8% lifetime

The best of any of the Democrat scores in this list is Sen. Mark Pryor's lifetime score of 16%.  The worst score of any Republican in the list is Sen. Scott Brown's 2011 score of 49%.  So the worst single year score of a Republican was still more than three times better than the best of the Democrat lifetime or 2013 scores.

It is a popular belief among libertarians that both parties are equally bad.  While the Republican Party is often disappointing, at least on issues of economic freedom there is a significant difference between it and the Democrat Party.  Senators Lee, Cruz, and Paul do make a difference and every Democrat is almost their polar opposite, right along side Obama, Harry Reid, and Nancy Pelosi.






28 October 2014

Debunking the Progressive Elitist Claim that Minimum Wage Laws Increase Employment

Back during the Great Depression, the Progressive Elitist mantra was that if only companies would pay their employees more, all would be well in the economy.  FDR pressed businessmen on this over and over, while many unemployed people would have been eager to work for less.  Record unemployment lasted for a decade due to this wrongheaded Progressive policy, along with a host of other economically illiterate Progressive policies.

Recently, there have been a host of Progressive Elitist claims that raising the minimum wage results in more employment and an improved economy.  I will address that claim, but first it is important to realize that minimum wage laws are an immoral deprivation of very fundamental and essential individual rights.  Everyone owns their own mind and body.  They have the right to associate with others according to their own choice in the very broadest sense.  Specifically, the right to cooperate with others for economic purposes and to earn a living is a very broad right.  The employer has a right to hire and others have a right to provide their labor under a voluntary agreement between the employer and the employee.  It is this panoply of rights and voluntary choices to cooperate between individuals that the Progressive Elitists want to trample.  They are determined to use force to impose their own imperious will upon others.

A great many Americans believe that it is not practical to be a man of principle, so the moral argument holds no sway with them.  They are determined to march out into a complex world as unprincipled as they can be, but for some vague notion that they want to help the underdog or the greatest number of people.  Now this means they are perfectly willing to hurt many other people and they are willing to substitute their judgment for that of others, even though they may not know those whose judgment is over-ridden and do not know the circumstances that might affect their choices.  As though not knowing the people affected by their directives to the government is not enough, they have to understand the many results set in motion by their directives without the aid of principles.  The simplifying and integrating functions of principles having been given up, the Progressive Elitists are without sufficient rational tools to understand reality and the consequences of their tyranny over others.  The chaotic results seldom match their intentions and are generally harmful to those whose individual rights and choices have been trampled.

 The Democrat Party is on a campaign to see the minimum wage raised in as many locales and states as possible.  They would also like to see the federal minimum wage increased.  There are more and more columns and articles about how some community raised the minimum wage and there was no local economic disaster in this or that town.  More recently, two University of Delaware economists, Saul W. Hoffman and Wai-Kit (Ricky) Shum have claimed there were no negative effects due to increases in the minimum wage in 13 states between 1 January 2011 and 1 January 2014.  This recent study, actually not even complete yet, is supposed to make us forget the history of the last staged increase in the federal minimum wage in 2007, 2008, and 2009.  See Democrats Eat the Young: Minimum Wage Case in Point, where I agree with the old Economics 101 viewpoint that higher wages mean fewer jobs, just as higher prices mean fewer sales.  Joe Conason wrote a recent column calling this a myth and citing the work of Hoffman and Shum as his proof.

Apparently, Conason not only does not know economics, but he does not read very well.  He claims that 13 states raised their minimum wage above the federal minimum wage earlier this year.  This is not true.  Hoffman and Shum looked at the 13 states that raised their minimum wage from 1 January 2011 to 1 January 2014 as noted above and Conason apparently did not even take note of that.

I am going to present some data dealing with the factors that affect the minimum wage impact on a state by state basis and the resulting employment of young people between the ages of 16 and 24 in the table that follows.  One very important point is that the minimum wage impact on a local economy is going to be proportionate to the cost of living in that local economy.  For this reason, as I have often argued, the policy of setting a federal minimum wage is very foolish.  The following table will provide an effective comparative minimum wage adjusted for the differing costs of living on a state by state basis.  One of the things you will see is that many of the states that have increased their minimum wage above the federal minimum wage are actually on an adjusted basis below most of the states whose minimum wage is the federal minimum wage.  If their cost of living adjusted minimum wage is below that of other states who use the federal minimum wage, then they actually have an effectively cheaper youth labor force and the employment of such young people should actually benefit from that cost advantage.


State
Cost of Living
Q2 - 2013
Minimum Wage
2012 ($)
Minimum Wage
Adjusted for
Cost of Living ($)
Unemployment
Ages 16-24
2012 (%)
Mercatus
Economic
Freedom Score
For 2011
Alabama
92.4
7.25
7.85
16.3
31.33
Alaska
131.1
7.75
5.91
14.8
7.21
Arizona
100.8
7.65
7.59
17.6
34.35
Arkansas
91.0
7.25
7.97
17.7
-8.56
California
128.6
8.00
6.22
20.2
-71.82
Colorado
99.7
7.64
7.66
16.7
11.56
Connecticut
133.8
8.25
6.17
17.0
-21.17
Delaware
106.9
7.25
6.78
15.2
24.43
Florida
97.8
7.67
7.84
16.4
21.67
Georgia
92.0
7.25
7.88
20.6
31.89
Hawaii
161.7
7.25
4.48
13.5
-56.36
Idaho
89.4
7.25
8.11
17.3
51.82
Illinois
94.9
8.25
8.69
18.5
-13.19
Indiana
90.0
7.25
8.06
14.9
14.62
Iowa
91.3
7.25
7.94
11.0
18.66
Kansas
91.8
7.25
7.90
13.2
9.03
Kentucky
90.1
7.25
8.05
16.9
5.05
Louisiana
94.2
7.25
7.70
16.7
-7.74
Maine
109.0
7.50
6.88
16.6
-35.51
Maryland
122.3
7.25
5.93
13.4
-17.31
Massachusetts
121.2
8.00
 6.60
12.2
-7.03
Michigan
94.4
7.40
7.84
16.9
-5.36
Minnesota
100.9
7.25
7.19
11.0
-7.79
Mississippi
88.7
7.25
8.17
23.0
-19.25
Missouri
92.9
7.35
7.91
16.1
30.64
Montana
98.4
7.65
7.77
11.1
30.53
Nebraska
88.9
7.25
8.16
8.9
17.35
Nevada
94.9
8.25
8.69
17.6
1.68
New Hampshire
120.2
7.25
6.03
13.4
41.17
New Jersey
129.5
7.25
5.60
18.2
-69.19
New Mexico
92.5
7.50
8.11
12.6
3.50
New York
134.5
7.25
5.39
18.0
-133.59
North Carolina
95.6
7.25
7.58
18.8
12.80
North Dakota
99.7
7.25
7.27
7.2
65.72
Ohio
92.3
7.70
8.34
12.6
-2.54
Oklahoma
90.0
7.25
8.06
10.8
50.10
Oregon
106.9
8.80
8.23
17.9
5.62
Pennsylvania
101.1
7.25
7.17
13.4
0.75
Rhode Island
125.8
7.75
6.16
17.2
-35.89
South Carolina
95.0
7.25
7.63
22.9
22.45
South Dakota
99.7
7.25
7.27
9.9
72.76
Tennessee
89.7
7.25
8.08
13.5
62.12
Texas
91.4
7.25
7.93
13.5
30.52
Utah
93.0
7.25
7.80
11.9
37.72
Vermont
118.3
8.46
7.15
13.1
-39.39
Virginia
95.9
7.25
7.56
16.8
45.10
Washington
101.6
9.04
8.90
16.7
2.69
West Virginia
96.6
7.25
7.51
15.7
-35.97
Wisconsin
95.1
7.25
7.62
12.9
-13.33
Wyoming
99.5
7.25
7.29
12.7
-16.35


Because Democrats are more eager than Republicans generally to raise the minimum wage and Democrat-controlled states are usually higher cost of living states, the small increases in the minimum wage in those Democrat states do not usually make them expensive states in which to hire young people.

Now let us compare the results for those states with an adjusted minimum wage under $6.90 with those having an adjusted minimum wage greater than $7.60:

These states have an adjusted minimum wage under $6.90:

State
COL Adj Min Wage ($)
Unemployment
Ages 16-24 in 2012 (%)
Mercatus Economic
Freedom Score
Alaska
5.91
14.8
7.21
California
6.22
20.2
-71.82
Connecticut
6.17
17.0
-21.17
Delaware
6.78
15.2
24.43
Hawaii
4.48
13.5
-56.36
Maine
6.88
16.6
-35.51
Maryland
5.93
13.4
-17.31
Massachusetts
6.60
12.2
-7.03
New Hampshire
6.03
13.4
41.17
New Jersey
5.60
18.2
-69.19
New York
5.39
18.0
-133.59
Rhode Island
6.16
17.2
-35.89
Average
6.01
15.81
-31.26

The states in blue above have a state minimum wage greater than the federal minimum wage.  Six of the twelve states, or exactly 0.50 of these cheap youth labor states have minimum wages higher than the federal minimum wage.


These states have an adjusted minimum wage over $7.60:

State
COL Adj Min Wage ($)
Unemployment
Ages 16-24 in 2012 (%)
Mercatus Economic
Freedom Score
Arkansas
7.97
17.7
-8.56
Colorado
7.66
16.7
11.56
Florida
7.84
16.4
21.67
Georgia
7.88
20.6
31.89
Idaho
8.11
17.3
51.82
Illinois
8.69
18.5
-13.19
Indiana
8.06
14.9
14.62
Iowa
7.94
11.0
18.66
Kansas
7.90
13.2
9.03
Kentucky
8.05
16.9
5.05
Louisiana
7.70
16.7
-7.74
Michigan
7.84
16.9
-5.36
Mississippi
8.17
23.0
-19.25
Missouri
7.91
16.1
30.64
Montana
7.77
11.1
30.53
Nebraska
8.16
8.9
17.35
Nevada
8.69
17.6
1.68
New Mexico
8.11
12.6
3.50
Ohio
8.34
12.6
-2.54
Oklahoma
8.06
10.8
50.10
Oregon
8.23
17.9
5.62
South Carolina
7.63
22.9
22.45
Tennessee
8.08
13.5
62.12
Texas
7.93
13.5
30.52
Utah
7.80
11.9
37.72
Washington
8.90
16.7
2.69
Wisconsin
7.62
12.9
-13.33
Average
8.04
15.51
14.42


In these expensive adjusted minimum wage states, 11 of the 27 states or 0.41 of them have minimum wages set higher than the federal minimum wage.  So, in 2012 a larger fraction of the actually inexpensive states had a minimum higher than the federal minimum wage compared to the expensive adjusted minimum wage states.  Despite having the advantage of a slightly cheaper effective minimum wage, the states with an adjusted minimum below $6.90 had a slightly higher youth unemployment rate of 15.81% compared to the effectively more expensive youth wage states with an unemployment rate of 15.51%.

Why were these inexpensive youth wage states not better at employing youth?  The answer lies in the last column in which I have provided the Mercatus Center state economic freedom rating for 2011 from their Freedom in the 50 States, 2013 Edition.   All of the inexpensive states have costs of living greater than the national average.  This is usually associated with a dense population and/or with Democrat Party control.  The average Mercatus Center economic freedom rating of -31.26 is very low compared to that of the expensive youth wage state freedom rating of 14.42.  Youth employment tends to be better when businesses thrive and businesses definitely thrive better with greater economic freedom.  People at the minimum wage level are the least productive workers in the economy, so their effect on how the economy flourishes is rather small.  The effect of a flourishing economy on them is much greater!

Now let us examine the list of 13 states that increased their minimum wage between 1 January 2011 and 1 January 2014.  These were the states examined by Hoffman and Shum.  The average cost of living index in these states is 110.2 and the adjusted minimum wage is just $7.55.


State
Min. Wage($)
1 Jan 2014
Cost of Living Index 2013
Adjusted Min. ($) Wage for COL
Mercatus Center Economic Freedom
Arizona
7.90
100.8
7.84
34.35
Colorado
8.00
99.7
8.02
11.56
Connecticut
8.70
133.8
6.50
-21.17
Florida
7.93
97.8
8.11
21.67
Missouri
7.50
92.9
8.07
30.64
Montana
7.90
98.4
8.03
30.53
New Jersey
8.25
129.5
6.37
-69.19
New York
8.00
134.5
5.95
-133.59
Ohio
7.95
92.3
8.61
-2.54
Oregon
9.10
106.9
8.51
5.62
Rhode Island
8.00
125.8
6.36
-35.89
Vermont
8.73
118.3
7.38
-39.39
Washington
9.32
101.6
8.46
2.69
Average
8.25
110.2
7.55
-12.67


These 13 states were compared to the remaining 37 states.  Seven of those remaining states had state minimum wages that were higher than the federal minimum wage.  What is more, since the states with changes had an average cost of living index of 110.2, the 37 remaining states had to have an average cost of living index of 96.4.  If we assume that each of these states had a minimum wage at the federal level of $7.25, the cost of living adjusted average would be $7.52.  This is almost equal to the $7.55 adjusted minimum wage to which Hoffman and Shum are comparing these states.  In fact, the seven states with higher than the federal minimum wage who did not raise their rate in the time-frame of the Hoffman and Shum study more than make up the difference.  Taking their rates into account yields an average adjusted minimum wage for the non-raising set of 37 states to $7.64.

So, Hoffman and Shum are trying to claim that a higher minimum wage does not hurt those states which actually have a slightly lower adjusted minimum wage when you compare them to states with a higher effective minimum wage!  Well, surprise, surprise.  How wrongheaded can you be Hoffman and Shum?

On average, the states that have raised their minimum wage rates above the federal level have done so because of the high cost of living in their state.  This is most definitely not an argument for raising the national minimum wage rate, which would only hurt the lower cost of living states to the advantage of the higher cost of living states.  This would also have the moral effect of hurting the freer states to the advantage of the more enslaved states.

Neither does the Hoffman and Shum comparison tell us anything about whether the increases in the minimum wage in the 13 states they compared to the non-raising 37 states gained or lost relative to the economic results they would have had without raising the minimum wage.  The study is useless on that question.

But from the above table we do see that these minimum wage raising states suffer with low economic freedom ratings.  Their attempt to interfere with voluntary employer-employee cooperation is consistent with that low regard for individual freedom.  We know for sure that the states with more economic freedom do out-perform those states with less economic freedom in terms of job growth and goods and services production growth.

The Hoffman and Shum and the Conason arguments for raising the minimum wage are here shown to leak like a sieve.