Bill: I recall, while still in law school, listening to a debate between Frank Knight and Thurman Arnold on a proposed bill that would increase the minimum wage from $1.00 to $1.25. Arnold was reciting the standard catechism that is still used – only the amounts are subject to change – while Knight responded: “if minimum wages really work, and cause no harm, why stop at $1.25? Why be a piker? Why not go up to $10.00 per hour, or $10.00 per minute?”
The original minimum wage law was enacted at the behest of labor unions – premised on the same price-fixing logic that would send its supporters screaming if promoted by milk producers for the sale of milk – and northern textile manufacturers who wanted to force their southern competitors to pay the same level of wages as they, in a labor-intensive industry that produced largely fungible goods. It was grounded in the same logic that still attends government regulation of the marketplace: “what’s good for General Motors is good for America.” (Although I still prefer the lyrics to the song from the musical “Li’l Abner”: “what’s good for General Bullmoose is good for the U.S.A.”)
