A Challenge to Minimum Wage Advocates

The only positive thing about minimum wage logic is that it is easily defeated. Common sense economics rejects it, but non-economic arguments cause it problems, too.

Here is a non-economic challenge to minimum wage proponents I have yet to hear convincingly answered (perhaps a commenter or my counterpart Tim can provide an explanation): If someone—say, John—wants to work for six dollars an hour at Company X, and Company X wants to hire John for that wage, why should that be illegal?

Why the Stimulus Failed, Part Two

I recently explained why government stimulus spending must fail. Tim contested my argument, but I will show why it stands.

The basic flaw with stimulus spending is that, in order to spend a dollar into the economy, government must remove a dollar from the economy, which renders spending a zero-sum transfer of resources.

Tim challenged these basics by asserting that not all money is contributing to economic activity, so utilizing “idle” dollars for government expenditure would avoid the zero-sum critique and raise national income. There are three reasons this is wrong.

Who Cares if People Work Less?

In a post Tim wrote partly as a reply to my piece on the Congressional Budget Office’s (CBO) recent revelation that Obamacare will drive Americans to work less, he asks why we should care.

While acknowledging that Obamacare will cause workers to “withdraw their labor,” Tim maintains that these workers “will also take home a proportionally smaller share of the economic pie because they will be earning less. So the question is, why do you care how much other people work?”

If people were freely making choices, conservatives would not object. After all, Milton Friedman taught that free people make the best choices for themselves given the incentives they face in the private marketplace.

Minimum Wage: Minimum Idea

Tim recently argued that raising the minimum wage is sound economics. However, doing so would hurt many poor people.

The crux of his argument is that low-wage workers are not paid their proper value for their contribution—in economic jargon, their “marginal product”—and that therefore an increase in the minimum wage would render little, if any, job loss. He further bolsters his case by stating that studies since 2000 demonstrate “little to no employment response to modest increases in the minimum wage.” In fact, he reasons, “a higher minimum wage may even save some employers money in the long term because it reduces costs associated with higher turnover and vacancies by making minimum wage jobs more desirable.”

These points do not support the case for raising the minimum wage.

Who is Ignorant?

A couple years ago, Nicholas Kristoff, a liberal writer for The New York Times, observed that conservatives know the left better than liberals know the right:

One academic study asked 2,000 Americans to fill out questionnaires about moral questions. In some cases, they were asked to fill them out as they thought a “typical liberal” or a “typical conservative” would respond. 

Moderates and conservatives were adept at guessing how liberals would answer questions. Liberals, especially those who described themselves as “very liberal,” were least able to put themselves in the minds of their adversaries and guess how conservatives would answer.

He then candidly confessed that he needed the help of a book to “demystify the right.” So why is it that conservatives understand liberals better than the reverse?

When Unemployment is Celebrated

In light of recent news that Obamacare discourages employment, the left has applauded the notion that working less is a good thing. But why should we celebrate forced unemployment?

Work disincentives have, until now, been universally recognized as negative for both individuals and society. Liberals, for instance, have agreed that unemployment benefits and food stamps may discourage work to some degree, but have maintained that, on the whole, the benefits simply outweigh the costs.