September 29, 2006
The Minimum Wage: Still More Posted by John Steele Gordon at 10:45 AM EST Fred Smoler writes, “If minimum wages help very needy people at all, that is already a blow to the empire of theory, because theory maintains that minimum wages increase unemployment, especially among the unskilled.” There is no doubt that the minimum wage helps those who still have a job—it increases their take-home pay. But it hurts those people who lose their jobs as a result of a minimum-wage increase. Even if, net, there is no loss of jobs or considerably more people are helped than hurt, that doesn’t change the fact that some people—real people, with families, with dreamswill be hurt by an increase in the minimum wage.
It is all too easy for us who, by the grace of God, can earn a decent living, to regard low-wage workers as an abstraction, a data set, not flesh and blood. But all the beautifully designed and carefully executed economic studies in the world do not put supper on the table of the family whose breadwinner lost his job because of an increase in the minimum wage.
He writes, “I think this claim [that minimum wage increases cause a rise in unemployment] is the source of any moral authority that the argument against the minimum wage can command . . .” Does no “moral authority”—whatever the hell that is—derive from the fact that there is a better way to help those who need help? A way that would involve no one losing his or her job?
I wrote yesterday that God did not include among the instructions for a well-run society that Moses brought down from Mt. Sinai a commandment to institute a minimum wage. Both Mr. Smoler and Mr. Zeitz do not seem to grasp that the minimum wage is not a sacred, unquestionable concept to be defended at all costs.
Mr. Smoler writes, “Academic economists tend to agree that earned income tax credits are preferable to minimum wages, and Mr. Gordon seems to share this view. My sense is that while there are some problems with earned income tax credits—very poor people are bad at filing the requisite forms, and the credit arrives only once a year, which is a significant practical difficulty—EITCs would in an ideal world be better public policy.”
This is a classic example of a liberalism-in-its-dotage argument for maintaining the status quo. There might be a problem somewhere, somehow, so let’s do nothing. Exactly the same argument is used to prevent any reform of voter registration laws. Anyone capable of holding a job is capable of filing a form. And the credit could easily arrive weekly. Simply set up an account for the individual, an account replenished weekly, and give him a debit card. People who now deal with food stamps can surely deal with this system. Indeed, they already do.
He writes, “But this is not an ideal world. There is significant political momentum behind the drive to raise the minimum wage, and politics is the art of the possible.” Again, this is simply an argument to maintain the status quo, no matter how lousy the status quo is. Liberalism has become the conservative force in American politics, fiercely resisting any and all ideas that weren’t part of the progressive agenda of a century ago (the first minimum wage law was enacted in Massachusetts in 1911).
He writes, “If you want to help the poorest working Americans, raising the minimum wage by a dollar or two may well be the likeliest way to do that any time soon.” Except, of course, for the poorest working Americans who actually lose their jobs because of it. They will be hurt. But liberals, munching a nice ripe Brie in their Upper West Side apartments, and washing it down with a naive little Pinot Grigio of no breeding but much presumption, will feel all warm and fuzzy anyway.
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