Thursday, May 01, 2014

Fairy Tale Economics: The minimum wage debate another example of why it's so easy to be a liberal

While the rest of the world is celebrating May Day by Morris dancing, or crowning a May Queen, or enjoying a bank holiday, or recovering from Walpurgis Night, Democrats here in America are celebrating it as International Workers Day, an international socialist holiday.

And that's only appropriate. The minimum wage issue is a paradigm case of the liberal mindset on policy issues. It is a case study showing the key features of the liberal worldview:

  • Good intentions count for everything
  • The mere passing of well-intentioned legislation is sufficient to discharge one's obligations as a statesman
  • Disagreement with liberal policy positions is evidence of evil intentions and bad faith and is sufficient to prove the moral evil of the person disagreeing

It is also an example of how easy it is to be a liberal.

Liberalism is the political path of least resistance. It is the position that requires the least critical thought because it does not require you to ask hard questions about your policy stance. It merely requires a pledge of good faith.

In the case of the minimum wage, the only thing you need think about is that workers at the bottom of the economic ladder will get paid more. Period. Stop there. No more questions are to be asked. You simply declare that you are in favor of workers making more money.

The problems with this position are not evident until a step or two into the economic thought process, a thought process that is never pursued because it would make the good intentions problematic.

And because the consideration of minimum wage laws never extends beyond the intention of helping workers to the reality of their actual effect, it never has to be considered.

The actual effect, of course, is that many workers--many of them new to the job market or trying to find their first job--will either lose their jobs or be faced with fewer job opportunities.

The extent of this effect is subject to debate, but the actuality of it is not. And those who attempt to deny it (the discussion never really gets to that point because this effect is seldom argued against and is more often simply ignored) should simply be asked, "Why are you settling for setting the minimum wage at $10.10 per hour?" "Wouldn't workers benefit more by raising it higher?"

In Seattle there is a movement to raise the minimum wage to $15.00 per hour--a proposal that is garnering the opposition of even politically liberal businessmen to whom good intentions are all-of-a-sudden not enough. Recent immigrants who run businesses in the city are particularly upset by the prospect, since their profit margins are lower than most other small businesses.

But what is the problem with $15 an hour? Why not $20? Why not $25? Why not $50? Would the person opposing such proposals be opposed to the well-being of workers in the same way they are characterized by minimum wage supporters as being in the case of the $10.10 legislation?

The problem, of course, is that such legislation would throw a lot of people out of work--something the $10.10 minimum wage would do as well, just not quite as much.

This is an election year political move, of course, of the kind both parties engage in when the prospect of facing the voters draw nigh. But that fact doesn't make it any less odious.

2 comments:

Art said...

But what is the problem with $15 an hour? Why not $20? Why not $25? Why not $50?

A good target is the hourly wage at which full-time employees can move off of food stamps. After all, why should I be subsidizing the Walton family with my tax dollars?

KyCobb said...

Martin:
"But what is the problem with $15 an hour? Why not $20? Why not $25? Why not $50? Would the person opposing such proposals be opposed to the well-being of workers in the same way they are characterized by minimum wage supporters as being in the case of the $10.10 legislation?"

This is one of the dumbest arguments out there. You can make any proposal sound bad by taking it to its extreme, including conservative proposals. "You want to cut taxes? Well then, shouldn't we cut taxes to zero percent, that would be better, wouldn't it?" And liberals do consider the effects of raising the minimum wage. The CBO reported: "A popular Democratic proposal to raise the minimum wage to $10.10 an hour, championed by President Obama, could reduce total employment by 500,000 workers by the second half of 2016. But it would also lift 900,000 families out of poverty and increase the incomes of 16.5 million low-wage workers in an average week."