By Amity Shlaes
Mathematicians and economists like to highlight the minimum wage as a cause of underemployment because they can lean on arithmetic and basic microeconomics to make their arguments.
There's less evidence available when it comes to the squishier factors that may hinder employment. One party undertaking the difficult task of quantifying such factors is the U.S. Chamber of Commerce.
The chamber once represented policy disappointment -- it was, historically, an unprincipled lobby-beholden entity whose execs were both unclear and unbold. Thomas J. Donohue, its current president and CEO, seems different.
Last year, Donohue identified economic uncertainty, mostly resulting from government overreach, as a primary impediment to hiring or rehiring. Since then, through its lawyers and economists, the chamber has been trying to quantify the cost of federal arbitrariness.
I look forward to those results. Over the years, various government entities and university scholars have taken stabs at measuring regulatory cost, though it was often like trying to stab cotton candy. Sometimes, such as in this 2005 study by W. Mark Crain, they've been able to quantify something we all viscerally know to be true: smaller firms -- the ones unready for the lawsuit, the investigation or the audit -- bear a greater share of regulatory costs.
The Phoenix Center, a markets-oriented group, recently published a study that reflects half a century's worth of data and shows that even a 5 percent reduction in the cost of regulation could help revive the private sector and create more than a million jobs.
These numbers are always softer, their data points closer to arbitrary, than those in the clean-but-sterile minimum-wage discussion. Still, perhaps it's necessary to be a little arbitrary when fighting the greater arbitrariness of government. Hopefully researchers will make peace with that paradox, and hunt on.
(Amity Shlaes, a Bloomberg View columnist, oversees the Echoes blog. The opinions expressed are her own.)
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-0- Jun/29/2011 22:14 GMT