Thursday, March 14, 2013

Minimum Wage

Interesting piece in the FREEMAN on minimum wage.

Still, I have to admit I have been converted to Angus's position.  Minimum wage is probably a bad policy, and it should be indexed.  But if you want to make a list of the really awful things the state does to regulate prices or kill people, minimum wage is not really worth your time.

In 2006 I wrote this.

But now I think this is right.

12 comments:

AD said...

I agree that min. wage isn't the worst offender, but to not argue against the minimum wage, at least at some level, is to concede that top down government controls can work.

I like Caplan's take:

"The minimum wage is far from the most harmful regulation on the books. Why then do I make such a big deal about it? Because it is a symbol of larger evils."

http://econlog.econlib.org/archives/2013/03/the_vice_of_sel.html

kebko said...

2 questions:
1) I've been wondering. Wouldn't the model people use to claim that higher MW doesn't increase unemployment also lead to the broader claim that there would never be any unemployment?

2) In terms of the importance of MW, isn't terminal unemployment of young black males of 30-50% a crisis? And can't we lay some significant part of the problem historically, empirically, and theoretically at the feet of MW?

Angus said...

Hi Kebko:

At this point in my life, no, I don't think we can lay "some significant part of the problem historically, empirically, and theoretically at the feet of MW?"

russell said...

you don't think preventing young kids from gaining meaningful work experience is a significant problem??? wow.

Angus said...

*sigh*. Oh Russell you rascal. That is not what I said at all. What I said was that the minimum wage is not a major cause of the problem, not that there isn't a problem.

This is why I titled my first post, "please to calm down about the minimum wage".

russell said...

*double sigh* i was referring to your comment above, though your other post on the issue was also alarming. a youth unemployment rate >25% (much worse for minorities) is a significant social problem. there is just no for me to even imagine that the MW hasn't played a part in that.

Angus said...

Jeebus help us. I was referring to my comment above too.

"there is just no (way?) for me to even imagine that the MW hasn't played a part"

There's your problem right there chief.

Try to open your mind just a sliver.

russell said...

isn't this simple econ buddy? what happens when prices rise? my mind is open...i'm just beginning to learn econ, so i definitely have an open mind. so, please dude, educate me. show me how raising the price of labor doesn't impact the amount of labor that's demanded. teach me how shrinking the demand for labor somehow doesn't increase unemployment at the bottom of the wage scale (where the MW does its damage).

Angus said...

If that's what you call open-minded, I think I'll pass. Feel free to think of me as a socialist dope.

russell said...

I don't think you're a dope or a socialist, and certainly not a socialist dope (if I did, I wouldn't be reading your blog). I come here to enjoy and learn.

But I do question the fact that you think the MW law isn't a big deal. I think it's extremely important. First, for moral reasons...people should be able to interact freely without gov't intervention. Second, it seems like it has to impact the very parts of society that can least afford its negative effects.

Anonymous said...

At the end of your minimum wage post, you state that there are far, far, far more important government actions to be concerned about. Care to share what some of those are?

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