Chicago's city council has passed a minimum wage law that would double the cost of labor for large businesses. Targeted at “box stores” like Wal-Mart and Target, the “living wage” legislation would increase the minimum wage in the city from $6.50 per hour to $10 per hour plus $3 in benefits.

Just like Maryland's pointless health care law targeted at Wal-Mart (overturned by the courts last week), the bill will cause large businesses to cut payrolls, reduce their operations in the city and reconsider future investments in Chicago. A Wal-Mart spokesman has already said the company would “redirect our focus on our suburban strategy,” which hurts not just urban consumers but urban workers as well. This law is aimed squarely as those it is intended to help, the urban poor, who will face the double blow of lost jobs and higher prices.

Posted by Nathaniel Ward at 04:24 PM | Permalink | TrackBacks (0)

Headline in this morning's New York Times: "Democrats Link Fortunes to Rise in Minimum Wage."

By fortunes, the headline refers to the political kind and not the economic variety--no doubt because hiking the minimum wage does not generate dollar-based fortunes and may even lower the lifetime earnings of impacted workers. Here's a bit of the abstract from a David Neumark paper on the topic:

We estimate the longer-run effects of minimum wages by using information on the minimum wage history that workers have faced since potentially entering the labor market. The evidence indicates that even as individuals reach their late 20's, they work less and earn less the longer they were exposed to a higher minimum wage, especially as a teenager. The adverse longer-run effects of facing high minimum wages as a teenager are stronger for blacks. From a policy perspective, these longer-run effects of minimum wages are likely more significant than the contemporaneous effects of minimum wages on youths that are the focus of most research and policy debate.

How unfortunate.

Posted by Andrew Grossman at 12:35 PM | Permalink | TrackBacks (0)

Microsoft just unveiled a new security product that it says will protect users from all the flaws in its operating system and the people who take advantage of them. The cost: $50 per year. To some extent, antitrust concerns were behind the decision not to bundle this new service with Windows. Over on Tech Liberation, I ponder what kind of consumer protection, an ostensible goal of antitrust, this is, exactly.

Posted by Andrew Grossman at 12:26 PM | Permalink | TrackBacks (0)