Minimum Wage Demagoguery

The Toledo Blade reports:

“Typically, most of our employees already make the new minimum wage,” he said. “The only ones that don’t are likely part-time entry level and maybe some of fitness staffs.”

But Ms. Delaney said she remains unclear about whether company employees who are paid on commission sales are eligible for the new wage level if their earnings don’t exceed $6.95 an hour, and how employees under 18 are treated under the change.

“We were supposed to receive information, but I didn’t get it,” she said.

The Michigan Department of Labor’s wage and hour division said the new minimum goes to $6.95 for most workers, then to $7.15 on July 1 and to $7.40 on July 1, 2008.

[...]

Heidi Watson, a spokesman for Michigan Gov. Jennifer Granholm’s office, the state labor agency has received numerous calls about the issue, but most questions have been like Ms. Delaney’s that relate to procedure and eligibility.

“The majority of our calls [to the Governor's office] are from constituents saying, ‘Thanks for the raise.’ They’re been waiting a long time for a raise,” she said.

Apparently, they have not received very many phone calls. In all seriousness, this highlights the motivations behind the minimum wage and reveals them to be completely political.

The Phillips Curve

The Economist looks at the return of an old, diproved theory:

IF HAIRCUTS and dress styles can come back into fashion, then so can economic theories. That is why policymakers have recently been debating the implications of the shape of that very 1960s concept, the Phillips curve.

Here is their corresponding chart:

They’re Cursed!

Doug of the Pro Football Reference Blog looks at curses:

I am quite sure I am not the first blogger to attempt to debunk The Madden Curse. There’s not much to it, really. It’s a combination of selective memory, regression to the mean, and random chance.

Frank on Keynes

Robert Frank explains why John Maynard Keynes was wrong in 1930:

Keynes granted that although needs rooted in a desire for superiority might indeed be insatiable, this was not true of absolute needs. And seeing absolute needs as more important by far, he concluded, “A point may soon be reached, much sooner perhaps than we are all aware of, when these needs are satisfied in the sense that we prefer to devote our further energies to noneconomic purposes.”

Keynes was surely correct that only a small fraction of total spending is prompted by the desire to flaunt one’s superiority. He was profoundly mistaken, however, in seeing this desire as the only source of insatiable demands.

Wants will continue to drive individuals to work harder and productivity to continue to increase. This essay by Keynes represents a strikingly idealistic hypothesis by a man who produced many profound thoughts on the subject of economics. Frank does a good job explaining why this theory never came to fruition.

In Defense of T.O.

Terrell Owens is obnoxious. He is pompous. He is arrogant.

Owens is also unique. He is unique because he is real. In a world full of those who are merely concerned with mastering their image and pretending to be people they are not, Terrell Owens dares to be himself. Owens does not hide his obnoxious, self-serving behavior. On the contrary, he flaunts it.

One could not help but feel the excitement of the sports media with the reports of Owen’s attempted suicide. Their excitement was not at the thought of T.O.’s possible death, but rather it was the belief that he had become depressed. The news of an attempted suicide suggested the demise of someone sports writers despise.

In sports we love to see the underdog succeed. We love to cheer for the good guy. We also love to watch the favorites and the arrogant fail. Perhaps there is some deeper meaning. Maybe we live vicariously through the underdogs because we see a little part of ourselves in them.

So why do we hate Terrell Owens?

Do we hate T.O. because he epitomizes all the qualities we hate about fellow citizens, co-workers, or employers? Do we hate him because he represents every spoiled kid that we grew up with who somehow always got his way? Do we hate him because we are told to hate him? Or because it is cool to hate him?

As an economist, I often find myself questioning others and in contradiction to the conventional wisdom (it is by no coincidence that this term was coined by an economist). Thus I find myself asking a different question.

Why don’t we love Terrell Owens?

In a world full of people pretending to be something they are not, Owens dares to be real. His actions may be deplorable at times, but they are genuine. We boo Alex Rodriguez because he is too clean-cut, too defensive. Yet we boo Owens for being just the opposite. Owens hides nothing. He was once quoted as saying, “I love me some me.” Honesty — and arrogance — is not displayed any clearer.

Ultimately, whether you like him or hate him, Terrell Owens is very much the product of a 24/7 news environment. The media may despise him, but they are the ones who enable Owens to constantly be in the public spotlight.

But while some are inclined to hate Owens, I choose to embrace him. Sure, he is pompous and obnoxious, but he is also real. Which is more than I can say for many of the figures who are featured on the 24/7 news cycle.

More on Wal-Mart and Prescriptions

The Toledo Blade opines:

WAL-MART’S dramatic announcement that it will start selling hundreds of generic prescription drugs for $4 a prescription, even if the purchaser has no insurance, has the potential to shatter high prices that have forced many Americans, particularly the elderly, to make a most difficult choice: food or medicine.

This is indeed good news. However, the much larger point is that markets work. Wal-Mart is successfully doing what the government has failed to do (as the government so often does).

Blair’s speech

Hot Air has the video of Tony Blair’s speech.

Mankiw is mad!

The normally very diplomatic Greg Mankiw is mad! The outrage is due to an article that confuses correlation and causation:

Researchers at Johns Hopkins School of Medicine tracked 1,055 medical students for 36 years. Compared with cooler heads, the hotheads were six times more likely to suffer heart attacks by age 55 and three times more likely to develop any form of heart or blood vessel disease.

The conclusion is clear: Anger is bad for you at any age.

Mankiw responds:

No, the conclusion from the fact given is not at all clear. People who get mad more easily do so for a reason–a more stressful job, bad genes, or some other mysterious factor X. Maybe it is the X factor, rather than the anger itself, that is bad for you. Maybe reducing anger without changing X won’t change health outcomes at all.

I feel your pain Greg (in my chest).

Bowing?

Bryan Caplan looks for an alternative to the handshake:

Japanese bowing strikes me as highly civilized, but even I’m not weird enough to start doing it unilaterally.

Quote of the Day

“The beauty of the classical liberal system is that it starts with the questions and gets the answers, not vice versa. There are heavy costs to this approach–injustices unremedied, suffering unrectified, virtues unrewarded. The only good thing you can say about such a system it is that it is ever so much better than doing things the other way ’round.”

— Jane Galt