Writing in today’s Wall Street Journal, economist Bradley Schiller contends that the big battle over the minimum wage was just political theatrics with scarcely any actual impact. Schiller’s article is available here.
The fact that the minimum wage increase doesn’t have much effect doesn’t mean that we should be indifferent as to whether we have such a law or not. If we had never made the foolish choice to institute a minimum wage law at all, we’d be better off because what the law does is to create the appearance that income gains for workers need to be legislated, rather than earned. Furthermore, the minimum wage encourages people to think that the law should “take sides” — that is, that it’s right for the government to force one group of citizens to give some of their wealth to another group. The ideal set of laws is neutral, favoring no person or group. Minimum wage laws and many other similar interventions necessarily destroy the neutrality of the law. As a result, we get the kind of factionalism Madison warned against, with many organizations working day and night to influence politicians to enact laws and regulations that help them or hurt their rivals.
