Sigh. Tom Blackburn is right and wrong, but mostly wrong in his column on the minimum-wage debate. He spends two thirds of his column summarizing the debate among economists, which is a waste of time. Only incompetent economists fail to acknowledge that the minimum wage creates unemployment to the extent that it actually raises wages above the market-clearing price. He does this in order to conclude that the argument for the minimum wage is moral, not economic. The thing is, he's right, it is a moral argument!
Economists do not make moral judgements. They tell you what will happen as a result of an action that you choose. It is up to you to decide whether those actions will be moral. Tom is trying to say that he can ignore economics when it comes to making his moral judgement. He has found economists who disagree with the truth of the matter. This is necessary for him, because Tom's morals require that paying a minimum wage only be a cost to businesses. If he was to respect good economics, he would have to conclude that the minimum wages are immoral. How can it be moral to help some low-paid workers at the cost of hurting lower-paid workers by causing them to be unemployable?
posted at: 04:41 | path: /economics | permanent link to this entry