Color me unimpressed.
There are alarmists on both sides of this issue. I'm not a minimum wage alarmist. It seems like a blunt instrument, but not a terrible idea, and it appears to have far more modest consequences than a lot of people would have you think. But it certainly shouldn't be on the short list of policy priorities to push during the State of the Union right now. How about we talk more about this graph:
Let's not, because it is very misleading.
ReplyDeleteWhy do you say the second chart is misleading?
DeleteMaybe he means b/c Krugman says so: http://krugman.blogs.nytimes.com/2012/10/06/constant-demography-employment-wonkish-but-relevant/
DeleteHowever, even adjusted for population changes, the employment-pop ratio still stinks. http://data.bls.gov/timeseries/LNS12300000
Fun new fact I just learned: Germany doesn't have a minimum wage. Perhaps this is a part (however small) of why they're doing better than most of Europe.
Oops, didn't mean to include second link. The appropriate chart is in Krugman's post.
DeleteUnemployment is bad right now, so let's do something that will only increase unemployment, especially in the always-mostly-unemployed category of people under 25. Raising the minimum wage is a terrible idea. I didn't realize there were people versed in economics that were not aware that price controls are bad. Apparently, I am still able to be shocked at how ridiculous the mainstream thought in economics can be.
ReplyDeleteI am amazed that my reaction is blasé at best to this and people have responded like I am demanding a minimum wage hike!
DeleteThe impression I meant to give with this post was that he's looking at the wrong policy choices.
Apparently I have to foam at the mouth at the mention of the minimum wage to please some people!
If we want to help poor workers, why not permanently extend the payroll tax cuts instead?
DeleteBecause our entitlement programs are a shithole as it is.
DeleteBut I like thinking along those lines. Minimum wages are more palatable to me if they're paired with some kind of labor demand policy
We can allow people to opt out of social security. Here's one idea:
Deletehttp://divisionoflabour.com/archives/000625.php
"Give Ms. Smith the right to opt out of paying $100 in social security payroll taxes provided she also opts out of (say) $103 in future Social Security benefits. She can now save her $100 privately. She will consider herself better off opting out if she thinks she can earn a return of better than $103 for each $100 saved. Voila, who could object?"
I don't think minimum wage laws are that important. If the market wage is below the minimum wage then it's quite simple to task workers with jobs that will take much longer than their contracted hours and then fire them if they don't achieve those tasks. Cleaning companies in Britain and Ireland always do this, there is little that governments can do about that. So, in practice, I don't think the existence of a minimum wage matters much. Mainly it prevents employers who insist on the law being followed in spirit as well as word from employing certain people.
ReplyDelete