On CNN earlier this week, Democrat Rep. Ro Khanna said:

“If you look at the minimum wage, it increased with worker productivity until 1968 and that relationship was severed. If workers were actually getting paid for the value they were creating, it would be up to $23.”

This claim is frequently made in minimum wage debates. It implies that over the past 52 years, the failure of politicians to raise the federal minimum wage in line with aggregate productivity (output per worker hour) has caused a disconnect between worker’s production and their pay. And this is taken as evidence of companies using their power to exploit workers.

Let’s leave aside for a moment the power of the idea of your inherent right to contract your labor as you see fit. There are two obvious problems with Khanna’s analysis.

First, state, local, and city governments across the country already often set minimum wages significantly higher than the federal level, particularly in higher‐​productivity regions. Even if minimum wages are considered a worthy policy tool and productivity a good guide to setting their level, setting minimum wages in line with the productivity conditions within a locality makes more sense than setting a homo­genous higher wage floor for the whole country. Country‐​wide productivity statistics mask vast productivity discrepancies across regions.

Second, and more importantly, comparing productivity gains among all workers as if these reflect what should have happened to hourly wage rates for minimum wage workers in particular industries is obviously a nonsense. After all, different industries experience different productivity growth rates over time, as do different types of workers within industries.

Sadly, a productivity series solely for minimum wage workers is not available. But back in 2019 I wrote a paper that tried to look at how the federal minimum wage might have evolved between 1987 and 2017 if it had tracked various different productivity trends:

The federal minimum wage in 1987 was $3.35, which is $7.32 in 2017 dollars. Since then, private nonfarm labor productivity has increased by an average of just under 2 percent per year. If the federal minimum wage had increased in line with trend productivity over that period, it would have increased to $13.22 by 2017 (see Figure 1).

Yet labor productivity in the restaurant sector (often regarded as a better proxy for a typical minimum wage industry) rose by an average of just 0.4 percent per year between 1987 and 2017 (with unit labor costs increasing by 3.3 percent per year). If pegged instead to this productivity measure, the minimum wage would have increased by just 13 percent in real terms over three decades, rising to $8.25 by 2017.

Given that the actual federal minimum wage was $7.25 in 2017 and that 22 states had minimum wages higher than $8.25, this productivity series and start date imply that minimum wages were higher in 2017 than justified by restaurant productivity trends since 1987 in much of the country.

Some subsectors have had even worse productivity performances. Labor productivity in “drinking places for alcoholic beverages” (i.e., bars and pubs) actually fell, on average, by 0.2 percent per year since 1987. If pegged to this trend productivity rate, the federal minimum wage would have fallen, too, to $6.89 in 2017 (see Figure 1)…

As I concluded then:

What this…analysis does show…is the danger of spurious comparisons between economy‐​wide productivity and the level of the federal minimum wage. Making the link between the two explicit might lead us to deliver much higher wage floors than are justified by the productivity of workers in certain sectors or regions, causing significant localized job losses or other economic adjustments.

President Joe Biden rescinded Donald Trump’s president proclamation banning new immigrant visas for most new legal permanent residents coming from abroad. Trump justified the ban based on old, disproven economic protectionist arguments. He claimed immigrants would take jobs. During his campaign and in this proclamation, President Biden rejected this idea. Yet incongruously, he’s keeping an identical ban on temporary work visa holders.

The State Department issued nearly 290,000 fewer immigrant visas in the categories that the ban targeted during the year that it was in effect. If they are not from a country on which Biden has imposed a countrywide entry ban—mostly Europe, South Africa, Brazil, China, and Iran—these immigrants will now be able to immigrate to the United States. This is great news for them and for the Americans with whom they plan to associate.

Altogether, the banned categories saw a 90 percent decline in visa issuances over the last year. The family‐​sponsored categories saw an average decline of 94 percent, while employees of U.S. businesses were least affected (partly due to a favorable court decision that exempted employees of members of the National Association of Manufacturers and the Chamber of Commerce). 83 percent of the banned immigrants were family members of U.S. citizens and legal permanent residents.

Spouses and minor children of U.S. citizens were exempt from the ban, but they also saw a decline in the number of visas issued due to the travel restrictions. According to a government filing this month, the State Department had nearly 473,000 documentarily qualified family‐​based immigrant visa applicants—presumably some of these cases will ultimately turn into denials, but this will be a huge undertaking for the consulates to process.

Four ideas to help with this backlog (mostly borrowed from our one‐​time Cato author David Kubat):

1. The government should use “parole‐​in‐​place” authority to waive the requirement to travel to consulate abroad for certain applicants who would otherwise be eligible to adjust in the United States if not for the fact that they initially entered without inspection (illegally).
2. It should adjudicate applications for waivers on grounds of inadmissibility before conducting the interview to save time and streamline the process. Under the current process, the State Department waits until after they’ve taken your fingerprints, medical evaluation, and other documents and then get denied. Only then do you restart the many months‐​long process of trying again.
3. It should allow for remote or virtual interviews to speed the interview process. Remote immigration court hearings are already happening.
4. It should waive as many interviews as possible for applicants with no red flags and a history of travel to the United States.

As Figure 1 shows, the number of immigrant visas had already declined by more than a quarter before the pandemic. This means that even without the visa bans, the new administration will have to go further to rescind the numerous restrictions on legal immigration that led to that decline.

Of course, the other major visa ban—on the most common nonimmigrant work visa categories for skilled and seasonal nonagricultural workers—is still in effect. President Biden states in his order revoking the immigrant visa ban, “The suspension of entry…. does not advance the interests of the United States. To the contrary, it harms the United States including…. industries in the United States that utilize talent from around the world.” These lines apply just as much to the nonimmigrant visa ban, yet Biden has chosen to keep it.

The nonimmigrant visa ban and immigrant visa backlog are just two of the numerous issues that Biden will have to address to get the legal immigration system back to what it was pre‐​Trump. There are also country‐​specific entry bans on Europe, South Africa, Brazil, China, and Iran that lack any health basis. The public charge rule to keep out low‐​income immigrants is also still in force. USCIS has not reinstated its prior deference memo and so is still relitigating past approved petitions and applications in order to increase denials. The immigration forms still contain the bogus, vague, time‐​consuming, and expensive “extreme vetting” questions based on a faulty reading of the data on vetting failures. At the border, Border Patrol is still “expelling” asylum seekers under a political CDC order. The immigration courts and asylum process generally is still in chaos.

With this action, the president makes his first real attempt to reinstate the system to how it once was, but he’s not even 10 percent of the way there. Still, it’s a great first step.

Annabel Edith Villagra has died.

If that name doesn’t ring a bell, you may have known her as Annabel Battistella. Or Fanne Foxe. Or the “Argentine Firecracker.” Or “the Tidal Basin Bombshell.” Or the 38‐​year‐​old exotic dancer with bruised eyes who jumped out of a car and into Washington, DC’s Tidal Basin after a row with her lover, 65‐​year‐​old House Ways and Means Committee Wilbur D. Mills (D‐​Ark.), in 1974.

Mills was the father of Medicare. In his 2006 book Medicare Meets Mephistopheles, Cato adjunct scholar David Hyman writes, “As the chairman of the House Ways and Means Committee, Mr. Mills shepherded the Medicare bill through Congress, and was the person most responsible for Medicare’s basic design features.” The Tidal Basin incident led to the discovery of his affair with Battistella (her surname at the time) and to the end of his tenure at the helm of the committee that oversees Medicare.

Medicare Meets Mephistopheles is likely the only satire anyone has ever written about Medicare. (Even more likely it’s the only funny one.) Borrowing from C.S. Lewis’ The Screwtape Letters, Hyman writes in the voice of a junior devil who reports back to Satan on Medicare’s success as a recruitment tool. The program’s many faults, you see, are all traps that its demonic progenitors use to tempt humans into committing all Seven Deadly Sins. The junior devil reports that he tempted Mills into an affair with Battistella (her surname at the time) to punish him (Mills) for trying to impose some fiscal restraint on Medicare. The junior devil later admits he needn’t have bothered.

The Washington Post’s obituary provides more context to the story. Mills struggled with substance abuse, “left office in 1977, and became an advocate for recovering alcoholics until his death in 1992.” Battistella’s life was not an easy one. Her first marriage bore three children but “imploded” even before the scandal, which wrought its own toll. Following the scandal, she told the Post, “I’ve been around too long. I may act sometimes like I’m 18, but I feel like I’m 50.” She remarried, and in 2017 lost the daughter of that marriage. She became a grandmother seven times over, graduated college, and earned two master’s degrees.

Rest in peace.

Politico reports that President Biden will sign an executive order today to review the global supply chains for medical goods and other “key industries,” in order “to determine whether U.S. firms in these sectors are relying too much on foreign suppliers, particularly those in China.” As I explain in a new Pandemics and Policy paper (coincidentally) out today, the federal government should not embrace economic nationalism to “fix” global supply chains that wobbled during the pandemic because–

• The nation’s overall productive capacity and its medical goods industries are generally healthy, and domestic industries and their supply chains adapted during the pandemic to meet extraordinary demand. This is particularly the case for pharmaceutical supply chains, which proved — according to the U.S. International Trade Commission’s thorough review in December — remarkably “resilient.”

• Past U.S. government attempts to re‐​shore “essential” supply chains have proven costly and unsuccessful, while those implemented during the current pandemic have produced significant distortions (e.g., a ventilator glut), public embarrassment, and subsidies to politically‐​connected companies that are at best tangentially‐​related to COVID-19.

• Global integration and economic openness can bolster U.S. resiliency by increasing economic growth, mitigating the impact of domestic shocks, and maximizing flexibility. As we have seen during the pandemic with respect to trucks and semiconductors, moreover, re‐​nationalizing supply chains can actually amplify manufacturers’ pain when economic shocks (pandemics, natural disasters, etc.) are within U.S. borders.

• There are numerous market‐​oriented policies that would generally benefit the U.S. economy while also supporting the industrial base and national resiliency, including: unilateral trade and investment liberalization; entering new economic agreements with U.S. allies, particularly those that specialize in medical goods; eliminating nationalist restrictions on government stockpiles and opposing any new ones; expanding high‐​skilled immigration; and eliminating “never needed” regulations that were suspended during the pandemic to boost domestic production, investment, and adjustment.

Fortunately, Politico quotes a senior Biden administration official as saying that “[r]esilient supply chains are not the same thing as all products being made in America. That’s not our intention here.” Let’s certainly hope not, as the facts above argue strongly against using protectionism and subsidies to “renationalize” allegedly vulnerable global supply chains.

More broadly, the White House’s medical supply chain review should resist the temptation to proposes “fixes” to supply chain problems that — due to previous government interventions and the independent efforts of numerous American companies and foreign multinationals to expand domestic operations, enter the U.S. medical goods market, or adjust their supply chains in response to the pandemic — might no longer exist. Indeed, by the time U.S. policymakers decide to intervene further in the market, it will look much different than the one on which they based their decision and will likely change again by the time any government‐​supported production comes online.

A common medical principle therefore applies to White House’s own medical supply chain review: “First, do no harm.”

(You can read the entire paper here.)

They say journalism is the first rough draft of history. With the Covid pandemic now a year old, we are starting to see books on the topic. And various libertarian studies and articles, critically examining government and private-sector responses to the crisis, have appeared. But some of those rough drafts in the major media add up to a pretty strong critique of government failure by themselves. Just consider the disappointing, even tragic, analyses that have been appearing over the past year:

The federal government had reports and warnings and war games about pandemic danger at least as far back as 2001, but was apparently unprepared when it hit.

Simulations as recently as 2019 predicted that agencies would fail to work together even after all those reports and plans.

A Seattle lab doing a flu study proposed in February 2020 to start monitoring the novel coronavirus. When it couldn't get approval from state and federal officials, the lab went ahead on its own. As the New York Times reported, "the Seattle Flu Study illustrates how existing regulations and red tape — sometimes designed to protect privacy and health — have impeded the rapid rollout of testing nationally."

Washington Post, March 16: "From mid-January until Feb. 28, fewer than 4,000 tests from the U.S. Centers for Disease Control and Prevention were used out of more 160,000 produced. The United States’ struggles, in [German entrepreneur Olfert] Landt’s view, stemmed from the fact the country took too long to use private companies to develop the tests. The coronavirus pandemic was too big and moving too fast for the CDC to develop its own tests in time, he said."

Washington Post, April 3: "In the 21 days that followed, as Trump administration officials continued to rely on the flawed CDC test, many lab scientists eager to aid the faltering effort grew increasingly alarmed and exasperated by the federal government’s actions, according to previously unreported email messages and other documents reviewed by The Washington Post, as well as exclusive interviews with scientists and officials involved.

In their private communications, scientists at academic, hospital and public health labs — one layer removed from federal agency operations — expressed dismay at the failure to move more quickly and frustration at bureaucratic demands that delayed their attempts to develop alternatives to the CDC test."

New York Times, June 3: "Given its record and resources, the [Centers for Disease Control] might have become the undisputed leader in the global fight against the virus.

Instead, the C.D.C. made missteps that undermined America’s response.

One criticism of Donald Trump’s foreign policy is that it was “transactional.” In 2020, Joseph Nye lamented Trump’s “transactional myopia.” And last week in his speech to the Munich Security Conference, President Biden argued that “our partnerships have endured and grown through the years because they are rooted in the richness of our shared democratic values. They’re not transactional.”

They should be.

To get this out of the way up front, transactional isn’t a perfect synonym for Trumpy. Complaints about Trump’s habit of describing alliances as protection rackets or his struggle to separate his interest from the national interest or his boorish style are separable from complaints about transactionalism. (All presidents use their own personal style and mental shortcuts, including Trump.) Trump’s idiosyncrasies aside, the alternative to transactionalism is sentiment and reflexive tribalism.

Think about international trade, or immigration, or international law. Free traders and protectionists both make their arguments in terms of what’s good for their country. Immigration restrictionists and liberalizers both argue that their preferred policies would benefit the country. Those who favor and those who oppose the International Criminal Court argue in terms of the national interest. It is hard to conceive of these openly transactional debates in any other way.

To suggest by contrast that international security–alliances, troop deployments, and wars–should be something other than transactional is bizarre. But huge swathes of the foreign policy establishment do it.

In 2010 remarks at the Brookings Institution, for instance, then‐​Secretary of State Hillary Clinton suggested that:

there are certain commitments, as we saw in a bipartisan basis to NATO, that need to be embedded in the DNA of American foreign policy and not sort of beginning and ending in fits and starts.

Similarly, in his presidential campaign Foreign Affairs article, Biden wrote that NATO:

transcends dollars and cents; the United States’ commitment is sacred, not transactional. NATO is… an alliance of values, which makes it far more durable, reliable, and powerful than partnerships built by coercion or cash.

This kind of thinking pervades the foreign policy establishment. In remarking on Biden’s Munich Security Conference address, Heather Conley of CSIS remarked that:

This was a homecoming speech — the prodigal American son has returned to the trans­atlantic family. This was not a time to raise family squabbles or traumas.

This is airy romanticism. If an alliance is embedded in our DNA, or if it is not secular but sacred, or if the alliance is a family to which we, the prodigal son, have returned, then it is impervious to critical scrutiny. (For readers reeling at the prodigal son metaphor, Patrick Porter has you covered.)

It should not require the CRISPR to examine or shrink America’s alliance commitments. Thinking of alliances as immutable and non‐​transactional is the antithesis of the founding admonition contained in George Washington’s farewell address of 1796 that:

It is our true policy to steer clear of permanent alliances with any portion of the foreign world… Taking care always to keep ourselves, by suitable establishments, on a respectably defensive posture, we may safely trust to temporary alliances for extraordinary emergencies.

There is no extraordinary emergency in Europe.

In a 1990 essay examining the meaning of the end of the Cold War, Jeane Kirkpatrick noted that “foreign policy elites often have different views than those of popular majorities,” warning against foreign policies lacking public support. She concluded that essay by arguing that “most of the international military obligations that we assumed were once important are now outdated. Our alliances should be alliances of equals, with equal risks, burdens, and responsibilities.”

To judge what are equal risks, burdens or responsibilities requires transactional thinking: What assets and liabilities do we have, what do they have, and is an alliance in our interest? The alternative is romance and sentiment.

Yesterday, the U.S. Department of Education announced that the Biden administration will not lift the federal requirement that public elementary and secondary schools administer state standardized tests this year. Well, sort of: The feds will allow numerous changes to how tests are given from previous years – they can be shorter, administered remotely, and states can apply for waivers from federal accountability measures, including for the share of students tested. So states will still have to test, but the conditions will be very different from previous years. (Note that last year the Trump administration waived all testing requirements.)

What good is this going to do?

For establishing trends, these tests will be largely useless. Unless the testing conditions are the same as in past years – which they clearly are not – we will not be able to tell the extent to which the results reflect changes in learning versus changes in the testing itself.

What about telling educators where their students stand as a result of COVID-19 disruptions? In this regard the testing might help, but if many students do not take the tests, or they do so in unprecedented remote conditions, again, what can be concluded about their learning versus the changing testing situation? Indeed, such tests might understate learning loss – what we are most worried about – by being easier than in the past.

Ironically, the federal mandate for uniform, high‐​stakes testing – testing with concrete ramifications for schools – may have kneecapped the ability of tests to give us reliable information when we experience major disruptions, the times we arguably need good diagnostic data the most. Because it makes little sense to punish schools when the thing hurting achievement is outside of the schools, we drop the stakes and loosen conditions, and hence fundamentally change the testing so that results are unmoored from the past.

As my co‐​authors and I argue in our recent paper Rightsizing Fed Ed, the federal government should ultimately end its testing mandate. But that would be a big change. More politically feasible in the short‐​term would be to loosen the mandates, returning power to states and districts. Perhaps a good thing to do as soon as possible, which we did not specifically recommend, would be to end all stakes for such tests, so that when the going in the country gets tough, we can still get reasonably comparable results from year to year.