July 25, 2018

ECONOMIC ILLITERACY FROM FEDERAL JUDGES: Eleventh Circuit invalidates state law preempting Birmingham’s minimum wage increase. The whole opinion is a mess, but I was struck by this:

As an initial matter, we have little trouble concluding that the plaintiffs have suffered concrete injuries as a result of the Minimum Wage Act. According to the amended complaint, Lewis and Adams work in Birmingham and earn less than $10.10 per hour. Birmingham Ordinance No. 16-28 guaranteed them $10.10 per hour, adjusted annually to a cost of living index.

In fact, the Birmingham ordinance didn’t guarantee Lewis and Adams anything, as it didn’t guarantee that their employers would be willing to pay them more than the market wage they had been earning. The rest of the opinion proceeds as if minimum wage laws are an unmitigated good for low-wage workers. The implicit reasoning, in part, is that if low-wage workers, particularly African American low-wage workers, approve of being promised something (a higher wage) for nothing (no negative consequences on the low-wage labor market), they must in fact be getting something for nothing. It’s as if neither public choice nor mainstream labor economics is at all familiar to the judges. More incentive for McDonald’s to speed up its installation of unmanned kiosks, I suppose.

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