3-D Chess And The Federal Minimum Wage

MSN.com reports that President Joe Biden is signing an executive order to set the wage minimum paid to federal employees and contractors at $15 per hour.

Note that this is not actually "an increase in the federal minimum wage." Biden's executive order is about the wage that the federal government pays to its own employees. It is not an executive order about setting a national minimum wage. If I'm not mistaken, the latter requires Congress and could never be achieved by an executive order. 

Biden has always been popular among federal employee unions, school unions, and the like, because he has always been quite favorable to their policy preferences in the past. So it will not be surprising if we hear members of these unions reacting quite happily to Biden's executive order on federal wages. That's a political win for Biden.

Interestingly enough, though, it might also be an example of 3-D chess. Why? Because increases in the minimum wage are well-understood to decrease employment. When you make something more expensive - in this case, labor costs - you get less of that something - in this case, labor. This is one of the most empirically robust findings in economics. It's not even worth debating anymore. Increases in the minimum wage decrease employment. 

Thanks to both the covid-19 pandemic and the various government lockdowns attendant thereto, the economy is in quite a pickle. The federal government is spending money like a drunken sailor, money it doesn't actually have. So the government's debt is increasing, and its budget deficit is increasing, and the US economy is not very healthy. One solution proposed by those who favor "austerity measures" is a reduction in federal spending. 

So the question is, how would a Democrat who wants to make unions happy choose to reduce federal spending while still pleasing his union supporters? One way might be to raise the wage standard such that the federal government hires fewer employees, reducing costs. Of course, this can only happen if the workforce reduction (or its growth rate) is reduced by more than the cost of the wage increase. Well, the federal government is now free to reduce the size of its workforce as much as it wants, since the unions are happy and US citizens in general have received the signal that Biden is "good for labor."

It will be interesting to watch and see what happens to the size of the federal workforce.


  1. You should have listened to that passion prices on mortgage brokers near me whitby are at their cheapest. The mortgage has actually ended up being much more simple as well as affordable to obtain.

  2. Very nice post, i really love your content, it is the best free custom receipt makers that make a free fake receipt, homework assignment help choose the simple receipt template and itemized receipt template to make a free custom receipt maker .

  3. Our paper experts research the theme a long time prior to composing to give custom scholarly composing administrations. We generally guarantee that our pay equity research paper follow the essential article structure and designing while tweaking papers as per the client's requirements. The article papers should be trailed by presentation, body, and end, the primary pieces of respectable exposition composing.

  4. Might you at any point wear an earthy colored Hannibal Hugh Dancy Jacket coat with dark jeans? Earthy colored calfskin coat with dark jeans goes well together. Adding earthy colored calfskin boots adds refinement to your head-turning look. For a tasteful and easygoing look, go for an earthy colored calfskin coat with dark jeans, a mix of these look cool.

  5. You can be sure you're getting the best deal possible with our extensive array of additional services, including CEMENT TREATED BASE services in USA. To begin, reach out to us right away!

  6. We have games for everyone, including404 esports in Dubai first-person shooters and strategic games. There is no excuse not to participate in the fun  So why are you still waiting? Create an account right away to get playing and winning!