Apparently, some people can’t figure out what a strong argument for the minimum wage might look like. In what follows, I will provide what I think is a reasonable case for minimum wage legislation. What I’m not saying is that the argument is right. I’m claiming it’s reasonable. It is perceivable (there is some probability) that that it could be right. Neither am I saying that this is the argument I agree with. I don’t think the minimum wage is good policy.
The case for a minimum wage. Many people believe that all people deserve a minimum standard of living, and that one method of pursuing this is by paying minimum wage workers an hourly income above the market value of their labor. The classic economic argument against the minimum wage is that it creates unemployment, by pricing many workers out of the market. However, much of the recent evidence fails to reveal disemployment costs, meaning that firms raise their minimum wage without having to let workers go. In fact, some studies show that the minimum wage increases employment, as the monopsony theory of markets predicts. The implication is that the most cited cost to minimum wage may actually not be a cost at all.
Note what I don’t say,
- Minimum wage…liberals…marxists. There has to be something analogous to Godwin’s law for this. As the discussion grows longer, the probability that a libertarian will bring up socialism/Marxism approaches one.
- Minimum wage advocates are assuming labor markets are non-consensual. Or, they assume that the only alternative to taking a low wage job is death, meaning the contract is as good as slavery.
I’m sure there are people who do believe in these things. But, those who want to take part in the debate on the minimum wage know, or should know, that these are relatively weak arguments. And critiques of these arguments do not address the stronger ones. It should not be surprising to you if you are attacking the weak ideas, but your criticism is not persuading anybody who doesn’t already agree with you. And, you are misleading your readers, because you’re guiding them into taking a position by ridiculing the weakest form of opposition against it.
P.S. Here is a strong argument against the minimum wage, that does address the strong arguments for the minimum wage.