…yesterday the president issued an executive order (probably preempted by the Fair Labor Standards Act, Service Contract Act, Davis-Bacon Act while violating the Walsh-Healey Act) raising the minimum wage for employees of certain federal contractors to $10.10 an hour. He did so, according to the text of the Order, to increase productivity and improve the economy. If a $10.10 minimum wage for a narrow sliver of the workforce will improve the economy, why not raise it to $20.10? Come on, boost it to $50.10 and really get the economy humming. A Mercedes in every garage.
Then there’s Obamacare. The president’s granted so many waivers and extensions completely contrary to the plain text of the statute it’s hard to keep track. He’s ostensibly done so to, among other things, give individuals and businesses time to comply with the law and avoid some of the immediate costs associated with compliance. Again, why stop with Obamacare? Why not extend this year’s income-tax filing deadline to 2017? Give taxpayers more time to comply and adjust to the costs of compliance. It’s the right thing to do.
Why indeed is $10.10 the right number? This complete arbitrariness reminds me of the story of how Roosevelt determined the daily price of gold:
…the exposure to investors that Morgenthau was getting through the gold purchase project of 1933 was already teaching him something. Investors didn’t like the arbitrariness. It took away their confidence. One day Morgenthau asked FDR why the president had chosen to drive up the price of gold by 21 cents. The president cavalierly said he’d done that because 21 was seven times three, and three was a lucky number. “If anyone ever knew how we really set the gold price through a combination of lucky numbers etc., I think they would be frightened,” Morgenthau wrote in his diary. And they were: In the second half of 1933 a powerful stock rally flattened.
There is no more basis for the $10.10 number than there is for Roosevelt’s lucky number. But there are no limiting principles, as far as I can see. This is the totalitarian impulse.