Steven E. Landsburg maintains "It is almost impossible to maintain the old argument that minimum wages are bad for minimum-wage workers." Far from it. I maintain that old argument, because the old argument is still true. To the extent that minimum wages actually raise wages above the market-clearing level, they create unemployment. I really don't care about the statistical studies of actual minimum wage changes, because legislators carefully ignore the moronic requests to double the minimum wage. Instead, they wait until nearly everyone is being paid more than the minimum wage, and raise it just a little. The effects of these kinds of changes are not discoverable by statistical studies because they are lost in the noise.
Steven also shows that he is indifferent to the fate of the people who become permanently unemployable. He claims that they don't care about having their job destroyed. He says "... so what? Sure, you've lost your job. But don't forget, this was a minimum-wage job in the first place.". How in the world can he speak about, much less *for*, someone he has never spoken to? That is, you see, the gist of the problem. The minimum wage destroys the jobs of people who are not known to be willing to have their job destroyed. This seems to me to be completely immoral.
Steven makes the point that published statistical surveys are not representative. He's probably right that we should ignore them. We should ignore them not for the reason he gives, but instead because it's simply bad statistics to measure the results of ongoing production. Instead you should run an experiment at the ends of the parameters you wish to study. The trouble is that we've done that experiment already, and whole industries got destroyed.
posted at: 13:07 | path: /economics | permanent link to this entry