The Minimum Wage Redux
The mantra that "the minimum wage should be $0" fills every economics 101 textbook that I've ever seen and conservatives like to repeat the saying along with their usual chant for "smaller government." The argument is that the mimimum wage distorts the labor market and leads to unemployment. For years, this was the consensus among economists, but no longer. When PhD members of the American Economic Association were recently polled, it is one of the few issues that generates basic controversy: 37.7% want it increased and 46.8 want it eliminated.
I support raising the minimum wage, although it is a crude anti-poverty measure and I would vastly prefer a reduction in the tax rate for people earning under $20,000 a year. But, given that all tax bills somehow end up unequally benefiting the top 1% of Americans, increasing the mimimum wage is a start.
I agree with Kinger and Kevin Drum that conservative economists often mistakenly view workers as commodities. Aside from the moral problems with this view, there is plenty of research showing that it is factually wrong: commodity markets and the labor market are fundamentally different (See this paper by Stiglitz et al for an example).
One of my favorite points to make against conservative pundits is that there is no conclusive evidence that raising the mimum wage actually increases unemployment. David Carr and Alan Krueger provided the most compelling evidence. (If people know what they're talking about, they'll cite some other contradictory studies such as the work by Neumark and Wascher, but like I said, there's no conclusive evidence.)
Most people support the minimum wage as a matter of promoting equality. The minimum wage might also be about Power. Employers, such as fast-food restaurants, often have more power than their low skilled workers, who earn nickle and dimed wages. Poor workers have no option but to take the work they are offered, since they have no savings to search for higher-paying jobs. The miminum wage is a way of guarranteeing that poor workers are not exploited any more than they already are.
Not all employers enjoy such power and low-skill workers do not always produce more value than the wage they receive, which is why there are adverse effects to raising the minimum wage. But, if the government isn't going to help out the poorest Americans with tax breaks, free health care or other social services, a higher minimum wage is the best of a bad situation.
Poster by Peter
I support raising the minimum wage, although it is a crude anti-poverty measure and I would vastly prefer a reduction in the tax rate for people earning under $20,000 a year. But, given that all tax bills somehow end up unequally benefiting the top 1% of Americans, increasing the mimimum wage is a start.
I agree with Kinger and Kevin Drum that conservative economists often mistakenly view workers as commodities. Aside from the moral problems with this view, there is plenty of research showing that it is factually wrong: commodity markets and the labor market are fundamentally different (See this paper by Stiglitz et al for an example).
One of my favorite points to make against conservative pundits is that there is no conclusive evidence that raising the mimum wage actually increases unemployment. David Carr and Alan Krueger provided the most compelling evidence. (If people know what they're talking about, they'll cite some other contradictory studies such as the work by Neumark and Wascher, but like I said, there's no conclusive evidence.)
Most people support the minimum wage as a matter of promoting equality. The minimum wage might also be about Power. Employers, such as fast-food restaurants, often have more power than their low skilled workers, who earn nickle and dimed wages. Poor workers have no option but to take the work they are offered, since they have no savings to search for higher-paying jobs. The miminum wage is a way of guarranteeing that poor workers are not exploited any more than they already are.
Not all employers enjoy such power and low-skill workers do not always produce more value than the wage they receive, which is why there are adverse effects to raising the minimum wage. But, if the government isn't going to help out the poorest Americans with tax breaks, free health care or other social services, a higher minimum wage is the best of a bad situation.
Poster by Peter
posted by PWN at 5:33 PM
1 Comments:
Nice Post!
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