From: Rafal Smigrodzki (rafal@smigrodzki.org)
Date: Sun Apr 06 2003 - 09:51:51 MDT
----- Original Message -----
From: "Barbara Lamar" <blamar@satx.rr.com>
To: <extropians@extropy.org>
Sent: Sunday, April 06, 2003 1:09 AM
Subject: RE: Help with a Minimum Wage Model
> Rafal wrote:
>
> > ### A minimal wage law is an attempt to do good with other
> > people's money -
>
> > Generally, trying to do good with other people's money is a bad idea.
> > Helping the poor can be achieved by less dishonest means, such as
offering
> > employers subsidies to hire workers, e.g., by matching every 1$/hour in
> > wages
> > paid with 1$ in subsidy
>
> Whose money would you be using to bankroll the subsidy?
>
> The rest of your argument makes sense, but it looks to me as though you're
> using other people's money in both of your hypothetical cases.
### You are correct, subsidizing wages from flat tax is still playing with
other people's money, but it is all a matter of degree. Minimum wage laws
mean there is hardly any overlap between the decisionmaker
(voter/legislator), and the payer (the business employing poor people). The
majority which enacts the law doesn't pay directly, only a minority does, so
for the average voter, almost all the money transferred due to his decision
will be somebody else's money. Of course, sooner or later the cost will get
spread over most of the society, but very indirectly, so most decisionmakers
will never become aware of the cost of their decisions.
In the wage subsidy, every decisionmaker in the majority which enacts a
subsidy law, has to transfer voluntarily a portion of his/her own funds, no
less than the funds transferred from the average member of a minority who
might oppose the subsidy. As a result, only a fraction, specifically, less
than 50% of the transfer, is other people's money taken against their vote.
This is still not perfectly honest, like private charity would be, but it is
a step in the right direction.
Rafal
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