David A. Moss, Harvard’s McLean Professor of Business Administration, has written an excellent article on what the federal government must do [to try] to prevent another explosion of systemic risk in the financial sector. He argues that those banks that are too big to fail must be separately, and transparently, regulated. This would, among its other benefits, reduce the incentive for banks to grow ever larger! The article should be ‘required reading’ for all those interested in keeping the economy between the ditches.
I’m as much a fan of the Kennedy family as anyone – I keep telling folks at Harvard’s Kennedy School that I once shook hands with Jack Kennedy, and I remember just where I was when I learned that Bobby had been shot.
So when Teddy died, and I read all about his causes through the decades, I wondered whether he’d ever tried to index the minimum wage. You know, if the minimum wage is a part of the social safety net, like Medicaid, Medicare, and Social Security, then shouldn’t it be indexed to the cost of living?
(Troglodytes worried about businesses passing on the increased costs of an increasing minimum wage might reflect on the costs of the already existing safety net programs, not to mention the social costs of desperate, hungry people and undereducated children. And note that in 2004 even Business Week supported indexing.)
Googling “indexing the minimum wage” brought up nine good sites, including this extended statement from the Center for Economic and Policy Research. I found a website devoted solely to the minimum wage (Internet wonders will never cease) with many more references to indexing.
I also discovered that Washington State, Oregon, Florida (!), and San Francisco index their minimum wages, as do Great Britain and Australia. New Jersey’s legislature, ever alert for job opportunities for the politically connected, created a Minimum Wage Advisory Commission to do an annual review and adjustment rather than an automatic indexing.
And wonder of wonders, this year Representative Al Green (D, TX) introduced the Living American Wage (LAW) Act to index the federal minimum wage to the federal poverty threshold! Here’s his press release.
But all the obituaries and this quick analysis revealed no evidence that Ted Kennedy ever proposed indexing the federal minimum wage. I’d love to know whether he didn’t consider it, didn’t think it possible in the US Senate of his day, or whether he did but the story is lost in the machinations of our legislature. Maybe history will tell us.
Meanwhile, three cheers for Rep. Al Green, for proposing what should be an obvious improvement in the design of government! I may send him a campaign contribution.