Friday, April 07, 2006

A step back for West Virginia

Occasionally, good things happen in our little state of West Virginia. For example, eminent domain legislation, though imperfect, was recently signed into law. But it seems for every step in the right direction, the Mountain State takes three or four backwards. Enter the state's recent passage of House Bill 4023, which calls for a two-step increase in the minimum wage to $7.25 an hour by the middle of 2008. I like to think of West Virginia as being the caboose of the freedom train, and bills like this simply put a few more train cars between us and the rest of North America.

Interestingly enough, everyone has a bone to pick with the bill. Those in favor of it feel that the bill's scope is too narrow; only 2,000 of the state's 20,000 minimum wage workers would be affected. After all, if you're going to have legislation, isn't the idea to have an effect with the laws you pass? I might even agree on that margin. As John Wooden used to say, "Don't mistake activity for achievement"-- even suppporters of the Legislature's decision are calling them on it.

On the other side of the issue, those who have taken Econ 101 know that increases in the minimum wage do nothing but handcuff companies' ability to be profitable and reduce aggregate employment. Any bill to 'increase the minimum wage' can and should be modified to instead read 'increase unemployment.' Nobel Laureate James Buchanan said it most effectively: " self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimum scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores."

Sadly, this isn't over and done with. Larry Matheny, secretary-treasurer of the West Virginia AFL-CIO, the state's largest labor-related interest group, has proclaimed that "[i]t's a shame. It's a shame, but we'll be back." Yes, they will be back. They will be back to keep West Virginia at the bottom of the economic freedom list, the bottom of per capita income, and the bottom of general resident well-being. I guess when you're at the bottom of the list, you can't have any legislation that reduces your relative position, right?

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