Faithful readers know that I am not as hard over on criticisms of the minimum wage as some. In fact, I've advocated that as a political matter (not an economic matter), it would be best if the GOP gives a bit on the minimum wage in order to get something we want--like a border fence, or a drop in corporate tax rates, etc. Others (see Tigerhawk) are less enthusiastic about raising the minimum wage (or even the existence thereof), and they base their objections largely along pretty straightforward economic analyses.
Into the picture rides Robert Samuelson, one of my favorite economic commentators, with this piece on the minimum wage. There's a little bit in it for everyone to like (or hate)--for the practical political animals in the audience, Samuelson throws this bone: "Let’s be clear. Some increase in the federal minimum is justified. It’s been at $7.25 since 2009. Inflation has eroded its value 10 percent since then and 24 percent since its peak year of 1968, says the left-leaning Economic Policy Institute." For those who (rightly) question its impact on the economy and the workforce, Samuelson lays out several scenarios of minimum wage increases, from a minimum of $10.10 an hour (500,000 lost) to what appears to be the Holy Grail for advocates, a $15.00/hr rate (3.3 million).
The issue doesn't work that well for us (GOP), but I'm not clear it works against us all that much. It is a HUGE issue for D's--which is why I find it to be so tempting as compromise bait--we give away something that matters less to get something that matters more. We shall see.
Did you watch even "Free to Choose"? They address this topic directly as I recall.
ReplyDeleteHow can you (or anybody else) justify paying x amount of dollars for y amount of productivity when actual productivity is y/2? If a $15 minimum wage is desirable then why not 50, or 150? Crazy you say? Well if wages bear no relationship to productivity or other economic factors but is simply a function of politics, why not?
This is interesting. Have a look.
ReplyDeletehttp://www.caintv.com/liberal-seattle-ceo-who-instit
Boudreaux had a MW post yesterday that brought up a point that I've not seen anywhere else.
ReplyDeletehttp://cafehayek.com/2015/08/minimum-wages-maximum-effects-play-out-over-the-long-run.html
And, it simply makes no sense to have a national MW at all. High COL/high wage cities on the coasts already pay more than the FMW, because they have to do that to get decent labor quality, but the lower COL/lower wage regions, small towns and rural communities simply cannot afford to pay what the feds say they must.
There is no one-size fits-all minimum wage that does more good than harm, both in the short run and the long.
I suppose I need again to stress that as an economic matter, I agree wholeheartedly with Hammer, Milton Friedman, and Murph. But this isn't solely an economic matter. It is leverage.
ReplyDeleteYeah we know CW, that's the problem.
ReplyDelete