The Anti-Manichaeist

The House of Reps has passed a min wage hike from $5.15 to $7.25, that was conveniently coupled with an estate tax-cut of 310 billion.  I got an email from Sojourners encouraging me to call my congressman about the bill. 

• Economic analysis that debunks minimum wage myths, from the Economic Policy Institute. (in other words, how to answer the question, “but won’t increasing the minimum wage eliminate jobs?”)
• Minimum wage fact sheet put together by the Center for American Progress Action Fund.
• Find out if your representative signed a “discharge petition” to raise the minimum wage to $7.25/hour.
• Find out if your representative signed a letter to Majority Leader John Boehner (R-Ohio) demanding a significant increase in the minimum wage (signed by 28 Republicans).

I checked out this information and found the studies to be selective and done by think-tanks, not professionals.  More importantly they miss the point that it does not matter whether a minimum wage increase reduces somewhat employment in covered sectors.  What matters is whether the increase effectively reduces poverty and that is an empirical question!  So I emailed Sojourners and asked them to ask that the US gov’t use some randomization in the implementation of a minimum wage increase. 

I doubt they’ll listen.  Sojourners tends to imbue too much of the spirit of Liberalism.  This can elevate the minimum wage as signifying far more than its practical effects.  It stands for being against poverty.  Nevermind that it’s the ugly cousin of effectively anti-poverty program like the Basic Income Guarantee program  that happens to avoid tax increases or tax reform and puts a disproportionate burden on small businesses. 

But having said all that, I’m not against minimum wages or an increase in their value, I just want to see some pragmatism in planning the change so that we can better evaluate its effects.  I’d also love to see the US working with EU and Japan and others to set up a $.60 minimum wage per hour for all products we import from the third world.  That would make a difference and be enforceable, without facing extreme opposition from the third world politicos or MNCs.  But I honestly don’t know if uber-idealistic organizations like Sojourners or Call to Renewal would ever support something like that.  Can one reconcile pressing for a $7.15 min wage at home and a $.60 abroad?  I say yes, so long as the underlying goal is the reduction of poverty, rather than ideological purity. 

dlw