Legislating The Economy

Mount Hood from Portland, OR

In Oregon this week, something unprecedented happened: Democrats admitted they were wrong! (gasp, thumpity, thump, falling body sound.)

After rushing to pass a minimum wage hike into law in March, state Democrats now realize that by forcing Oregon employers to adhere to the highest wage floor in the United States, they may have made a mistake! (gasp!)  "Call the DNC!  What would Debbie do?  Surely she has a trick or two!"

“They just wanted to pass something,” said economist Eric Fruits, an academic with an unfortunate name.  “They were really worried about the "15 Now" people protesting, they got so snakebit they would have passed anything that was called a minimum wage increase.”

Under the law, signed by Governor Kate Brown a few months ago, the state will raise the minimum wage to $12.50 in rural Oregon, to $13.50 in mid-size cities, and to $14.75 in the Portland area by 2022 and we now find this was done with no studies, hearings, testimony or debate.  On those issues alone it is not valid legislation.

So desperate were the state lawmakers to pass the legislation that they chose not to wait for Oregon economists to testify. These guys could have qualified to navigate the Titanic.  Then analysts dropped their grim predictions on the Democrats.  According to them, the wage hike will “result in approximately 40,000 fewer jobs in 2025 than would have been the case without the legislation.

Why is it legislators can never master the idea that an economy is an equilibrium system something like a "teeter-totter."  When one side goes up the other goes down.  It may not be that simple, but the analogy is instructive and all they will accomplish in this is make a new generation of minor criminals.

If a guy has a small business and would like to have a small job like cleaning up at the end of the day or helping with sales after school when the daily herd of kids comes in he will hire some and pay them in cash thereby becoming a criminal in the eyes of stupid law makers.  These little events are the seeds of anger with establishments and ultimate revolutions of many kinds.

Now Oregon lawmakers are scrambling to add a few pertinent amendments to the law in the hopes of avoiding catastrophe. They are considering a new bill that would make exemptions for workers in training and new employees who fit defined criteria. But even those adjustments have met resistance as the legislature is "liberal."

“I think having a sub-minimum wage, while it might sound good, could end up hurting the very people we’re trying to help,” said Diane Rosenbaum, a Democratic state senator.

It is tragic that so many of our elected ruling class have not learned the lesson of the free market.  It always produces the best solution. It will wobble getting there, make mistakes along the way, but it is a self-correcting mechanism.  That is something the elected ruling class cannot abide:  Something they cannot control and so they ignore it and continue legislating the economy.

Adrian Vance