Morosoph fails to get the minimum wage argument correct. He makes three glaring errors. First he says "Well, everybody will just raise their prices", ignoring the fact that some will compete by cutting costs. Second, he admits that some poor shmuck is going to lose his job because of the minimum wage. How can that ever be moral? And yet people support the minimum wage because it's just. Third, he thinks that "Decent statistical analysis would clear the air..." It won't, and not for a lack of trying. There are many reasons why a person might lose their job. The effect of a minmum wage increase happens over time, not immediately. This information is lost in the noise. There's no way to pull it out of the noise except by raising the minimum wage by a lot. That's been done before, and yes, many people lost their jobs, so no, we don't need to run that experiment again.
The theory predicts it, the evidence supports it, the only question is "how many people lose their jobs vs. how many people's income goes up." But how can any moral person ask that question? How can it be right to hurt some innocent person just so you can help other people?
Morosoph's kind of economics is the kind that just pisses me right off, because he Just Doesn't Understand how economics works in the real world. He thinks that legislated laws can break natural laws. He would probably vote in favor of changing the speed of light.
posted at: 15:40 | path: /economics | permanent link to this entry