RE: Help with a Minimum Wage Model

From: Matthew Gingell (gingell@gnat.com)
Date: Thu Apr 17 2003 - 16:07:53 MDT

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    Rafal Smigrodzki writes:

    > But forbidding a below-minimum wage contract does not make the poor
    > person more likely to have a "dignified existence". Quite the contrary, as
    > evidenced by current levels of unemployment. Regardless of one's ideology,
    > minimum wage laws are irrational, whether you want to benefit the rich or
    > the poor.

     As far as I'm aware there's no substantial empirical evidence linking
     unemployment with increases in the minimum wage, if there were such a
     strong effect as you suggest I'd expect such data to be easy to come
     by. Certainly blaming the current economic downturn on the minimum
     wage is foolish, several steps sillier than the choice of words you
     call me on below.

     But I do want to be clear I'm sympathetic to your position - it may
     well be, in the final analysis, the minimum wage is simply not a very
     useful tool for achieving the kind of ideological objective I
     outlined in my previous post. I might add "irrational" is a loaded
     term, that we disagree doesn't necessarily mean I'm foaming at the
     mouth: One could look at the minimum wage as a legislative mechanism
     for mitigating the enormous transaction costs inherent to collective
     bargaining. (I liked Damien Sullivan's remark on this point further
     up this thread very much.)
     
     One point to be clear about though, and one that often doesn't get
     taken seriously enough in this sort of abstract argument from
     principle, is that while a particular policy tool might not be the
     ideal choice from the perspective of an armchair theorist, it might
     be the only one which is politically achievable. Even if we were to
     agree the minimum wage is an inefficient means of achieving a goal,
     one might still support it because it's here, it does some good, and
     the superior alternatives aren't going to happen. If you actually
     want to talk about the real world, you've got to deal with what is
     and not what should be: I'd trade the minimum wage for a negative
     payroll tax in an instant, but as a practical matter it's foolish to
     let the good be the enemy of the just-about-adequate.

    > Also, the use of "dignity" as a general catch-phrase to bolster one's
    > ideology is manipulative. No nice person would oppose "dignity", and this is
    > why so many want to twist the meaning of the word to sell the pet project.
    > There is nothing undignified with sharing an apartment with others (as I do,
    > to save money). If I can do it, the janitors can do it as well.

     But that's the whole point of rhetoric, to make such a compelling
     case no reasonable, nice person could possibly disagree!
     
     What I mean by dignity is open to discussion, it's an admittedly
     vague concept: I live in Manhattan where you can barely find a *room*
     in a shared apartment for less than $1000 a month: If the woman who
     cleans my place has to take the train in I don't see that as any
     great insult to the rights of man. I would like her to be able to go
     to the doctor when she gets sick though, or get her teeth fixed if
     they start to hurt, and maybe even take her kid to a movie and buy
     some popcorn every once in a while. Does that give you a better sense
     what I'm getting at?

    > There is much more dignity in honest work than in demanding
    > freebies.

     And who could possibly disagree with that. :)



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