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Why is it that the states with the highest unemployment rates (Oregon, Washington and Alaska, for example) have the highest minimum wage laws? Why is it that in any one area the most unskilled workers, usually comprised of teenagers and minorities, have a much higher unemployment rate than the rest of the population? The answers are explained in a concise article provided by the Ludwig Von Mises Institute explaining why Economists are against raising the minimum wage. What You Need to Know About the Minimum Wage The short answer is that Economists are against the minimum wage precisely because it hurts the poorest members of society the most . As the Wall Street Journal has noted , "This is one of the most settled propositions in economics, second only perhaps to free trade." What's ironic about this is that, contrary to public opinion, it is actually those who oppose raising the minimum wage that have the poorest members of society in mind. This was a difficult concep...

Russell Roberts, Professor of Economics, writes that it does. He explains himself here , than here , and here . Great reads. Update: Added Walter Williams discussion on the topic .

You often hear the number 45 million quoted but you rarely hear who comprises these numbers. Everybody just assumes it's the poor, the few who can't afford it. Dr. David Gratzer has gone through the numbers and his results will shock you. He writes, A full 16% of the uninsured, the study found, have incomes above $75,000 a year and could obviously afford insurance if they chose to buy it. Roughly a third of those lacking insurance earn $50,000 a year or more. You may think that a poor single mom with three children living in South-Central Los Angeles is among the uninsured, but in fact, she is eligible for Medicaid, as are her children. The BlueCross BlueShield study notes that 1 in 3 of the uninsured are eligible for — but not enrolled in — a government-sponsored health program. Because Medicaid and children's health programs allow patients to be signed up literally in the ER, these individuals could be covered; they just choose not to do the paperwork. And of the remai...

Adam Young has an informative article detailing The Origin of Income Tax .

Max Borders, the project director and editor of aBetterEarth.org, lists the top ten .

Bob Herbert, columnist for the New York Times, writes about the supposedly bad situation of the American worker, he concludes, American workers are in an increasingly defensive position. In a tight labor market, when jobs are plentiful, workers have leverage and can demand increased wages and benefits. But today's workers have lost power in many different ways - through the slack labor market, government policies that favor corporate interests, the weakening of unions, the growth of lower-paying service industries, global trade, capital mobility, the declining real value of the minimum wage, immigration and so on. The end result of all this is a portrait of American families struggling just to hang on, rather than to get ahead. The benefits of productivity gains and economic growth are flowing to profits, not worker compensation. The fat cats are getting fatter, while workers, at least for the time being, are watching the curtain come down on the heralded American dream. Economist...

I must say that my favorite speech at the RNC was by far Arnold Schwarzenegger's. If you didn't get a chance to watch it I strongly recommend you do. If you can't watch it , at least read it . Here are a couple highlights, I was born in Europe ...and I've traveled all over the world. I can tell you that there is no place, no country, more compassionate more generous more accepting and more welcoming than the United States of America. To my fellow immigrants listening tonight, I want you to know how welcome you are in this party. We Republicans admire your ambition. We encourage your dreams. We believe in your future. One thing I learned about America is that if you work hard and play by the rules, this country is truly open to you. You can achieve anything. My fellow immigrants, my fellow Americans, how do you know if you are a Republican? I'll tell you how. If you believe that government should be accountable to the people, not the people to the government...then...

There has been a lot of negative talk recently about immigrants and how they effect the United States. Stephen Green, writing for the Tech Central Station, has an article rebutting some of those negative comments and brings up other points often ignored in the discussions. He concludes, The New (Nuevo?) America won't be the one we're used to -- but neither was the old one, or even the America we knew just twenty years ago. Latin America will also continue to change, as we all become increasingly intertwined politically, economically, and culturally. In return for losing some control of a culture we never really controlled in the first place, we get to live with neighbors who, for the most part, are increasingly free and prosperous. For that, we can all be thankful, and maybe even a little less afraid.

Many liberals claim that Bush's tax cut went primarily to the wealthy. Tavares Forby, a good friend of mine who runs blackpundit.com , created an easy to read graph detailing the before and after tax brackets to show how this tax cut was implemented. He writes, Many liberals claim that the Bush tax cut only benefits the wealthy. Anyone with basic math skills can prove this is not true. Actually, “President Bush tax cut” cuts the most on the lowest income bracket. The graph clearly shows how in terms of percentage the poor benefited much more than the rich. A worth while read.

The Economist comments on the current poverty line report just released, it writes, Whatever crude logic it possessed at the time, the Orshansky poverty line is by now quite arbitrary. Its originator calculated the cost of meeting a family’s nutritional needs and then multiplied this figure by three, because families in the early 1960s spent about a third of their income on food. The Census Bureau does not repeat this exercise to determine today’s poverty line; it does not recalculate the cost of an adequate diet or remeasure the share of income spent on food. It simply adjusts Ms Orshansky’s figures for inflation. Thus today’s dollar thresholds do not tell us how much a family or individual needs to get by in today’s America; they simply restate the cost of feeding a family in the 1960s in today’s prices, and multiply it by three. The Census Bureau has already experimented with such measures, and is probably itching to finally retire the Orshansky line. But its political masters in t...

Economist Don Boudreaux has two very informative blogs. The first one deals with prices and how they are the true equalizer. In direct contradiction to those who use the poor as an excuse for price controls. He writes, Any practical, realistic method apart from rationing by price hikes will involve arbitrariness at least as great (I think greater) than whatever arbitrariness there is in income distribution. One great advantage of rationing by market prices is that they reduce to a minimum the role of arbitrariness. Price are, in other words, a great equalizer. Anyone who is willing to pay the market price for a good or service is just as likely to get that good or service as is the seller’s mother, neighbor, or bowling buddy. The second one addresses the often misunderstood 'trade deficit'. He writes, But the trade deficit is no cause for concern. It reflects foreigners’ preference to invest in American assets rather than to cash out all of their dollar holdings immediately f...

One of the arguments against social programs like welfare is that whenever government steps in, the private sector steps out. And since everybody knows that the private sector is much more efficient than the government, you are left with an overall net loss for the people in need. That is why it is so great to see organizations like "Modest Needs" helping those in need. There is an article in Fox News detailing their work, Modest Needs was conceived, built and still operates on simple concept — a small investment to help an individual or a family with a utility bill, rent check or health-care invoice reaps huge rewards if it keeps its recipient employed or prevents an eviction. Proponents of laissez-faire capitalism often point to organizations like Taylor's when arguing against the need for social safety nets such as welfare and Social Security. It's in our own self-interest to look after one another, the thinking goes, and in the absence of a state-funded social ...

The greater lesson to be learned in this election, with all the 527’s (named after the part of the tax code under which they operate) attacking each candidate, is that all those people that supported the Mc Cain-Feingold Campaign Finance Reform have egg on their face(including GWB for not vetoing it!). As predicted by those who were against it, Campaign Finance Reform will not stop soft money, it would just push it back one more step , to 527's. So now, thanks to 'Campaign Finance Reform', we have a scenario where soft money is pouring into the campaigns, but now through unaccountable 527's, and giving the contributors a tax break where there was none before, all in all, creating a worse scenario. There is no way to stop soft money. If you try to fix the current problem by regulating 527's, than you start trampling on religious freedom and all that goes with it. The most one can do is make all contributions known and documented. And let them flow where they may. ...

The Boston Globe has a very good article in defense of 'price gouging'. Update: More on Price Gouging . Update-9/7/04: I found several other articles on 'price gouging' . Update-9/16/04: Even more on price gouging . Update-3/8/05: The eclectic econoclast has more . Update: Angry Economist has more . Update: Mises has more and more . Update: More here , here , here and here . Update: More here , here and here . Update: More here , here , here , here , here , here , here , here , here , here , here , here , here , here , here , here , here and here . Update: Becker and Posner have more here , here , here and here .

Alex Tabarrok , Associate Professor of Economics at George Mason University, gives a (supposedly) simple economics test over at Marginal Revolution, one that he is giving to his students, he writes, There is in the law what is called "a nonwaivable warranty of habitability," which is a fancy way of saying that a dwelling must have certain features such as heating, hot water, sometimes even air conditioning, whether or not such terms are in the lease and even if the lease explicitly excludes such terms. I ask my students who is made better off and who is made worse off by a legal doctrine that says tenants must have hot water? ...Think about it and then read the extension for more. If you think you know the answer read the rest of the article to see what the correct answer is. By the way, I got the answer wrong. :-( Oh, and if you got that answer correct, and want to try for a bit more difficult challenge, check out his follow up question . Update: Professor Tabarrok answe...

Thomas Sowell writes extensively on black issues, nonetheless, his points have a close relevance to hispanic issues, giving the close political ties of our cultures. Thomas Sowell writes , August 20th marks the 40th anniversary of one of the major turning points in American social history. That was the date on which President Lyndon Johnson signed legislation creating his "War on Poverty" program in 1964. Never had there been such a comprehensive program to tackle poverty at its roots, to offer more opportunities to those starting out in life, to rehabilitate those who had fallen by the wayside, and to make dependent people self-supporting. Its intentions were the best. But we know what road is paved with good intentions. What was the result of these social programs? The article goes into specifics , but based on historical economic experience, I can already guess what the results were.

You hear complaints about the unemployment rate among Hispanics, or how this other group lost their jobs, and everybody's immediate reaction is to blame the Presidents. What is left out of discussions like these is the question of exactly how much power does a President have over the Economy? Not much says Russell Roberts , professor of Economics and the Smith Distinguished Scholar at the Mercatus Center at George Mason University. He writes, The President hardly even runs the government. He certainly cannot direct the fortunes and failures of millions of workers, managers, investors and entrepreneurs. The quickening pace of our times creates an impatience with delay. We want our food fast and our email messages now, on our phone. We want everything yesterday if we can have it that way. The idea that we can do very little about stimulating the economy in the short run is simply unacceptable. Surely there is some policy lever, some economic button to push that can speed things up....

I have always believed that the solution to the rising cost of health care is to do two things. First, eliminate health insurance companies and replace them with "Health Crisis Insurance companies" which insure you for only the most costly procedures. Second, instead of giving Health Insurance coverage, companies should stop offering them and just give the employees a larger income. This will make patients pay for the small, non-crisis type medical necessities out of pocket. Both of these solutions will eliminate unnecessary costs, give patients more power to shop around, thereby driving competition up and establishing a direct link between medical costs and medical decisions. Well now Health Savings Accounts move us much closer to that. Steve Forbes, from Forbes Magazine, has an article detailing the advantages of this new method of savings, he writes, The premise of HSAs is to once again put the patient, i.e., the consumer, in charge of the health care market. HSAs allow...

One of the main methods for poor countries to get out of poverty is through free trade. Especially trade dealing with agriculture, since this is one of the few areas developing countries can compete in. This is one of the main reasons why trade tariffs and trade subsidies should be eliminated. Not only are both economically bad for a country, but they hurt the poorests countries in the process. That is why it was disheartening to learn that President Bush, like all other presidents before him, continued such an unfair practice. But there is a positive side to all of this. It looks as though an agreement was reached between developing countries and developed countries, including the USA, EU and Japan. The agreement is to have the current subsidies phased out, and eventually, eliminated. Let's hope we keep moving in this direction in the future.

There's a good article in the Economist explaining exactly why, Economic freedom, argues the report, does much to foster the investment poor countries urgently need if they are to grow. James Gwartney and Robert Lawson, its authors, have found that the freest 20% of countries invest around $11,000 per worker, more than 12 times the figure for the least free 20%. The effects of economic freedom on coveted foreign direct investment (FDI) are even stronger. The freest fifth of countries attracted over $3,000 of FDI per worker, against $68 for the least free fifth. Moreover, freer countries make better use of what they have: the authors estimate that investment is 70% more productive in the most free countries than in the least free. This translates into faster GDP growth (see chart). After adjustment for differences in initial income, climate, the proportion of people near coastlines and human capital, countries with a freedom score below five saw growth of less than 0.4% a year, on ...