You can make your case for an artificially high minimum wage all you want here. We have and will continue to tolerate such “arguments.”
We understand why you want a minimum wage that is above the real wage for unskilled labor to work. We get it. The world is hard. More money to the poor would be more “just.” And so on and so on.
The thing is government can’t just declare something to be. A job that is worth $10/hour does not suddenly become worth $15/hour because the city council declares that it be worth $15/hour. THERE IS REALITY. REALITY EXISTS. REALITY IS NOT DEFINED BY GOVERNMENTS.
Of course this in essence is the great folly of all central planning. People believe that they can in fact suspend the laws of physics and economics because reality is “unfair.”
One can’t. Sorry. We understand why one would want to believe in magic economics and why so many do, but it’s still nonsense.
And the saddest part of this whole situation is that pushing the minimum wage up hurts the most vulnerable of all. Those whose labor isn’t worth the new minimum wage level. So they lose their jobs.
But that’s “social justice” for ya.
In late June, researchers published a careful and data-rich study on Seattle’s minimum-wage law. It found that the city’s graduated hike in the minimum wage is costing thousands of jobs and cutting the number of hours worked by people in low-pay jobs. In the aggregate, Seattle workers are losing millions of dollars in wages thanks to the law. The study has drawn praise for its analytical rigor; one economist at MIT called it “sufficiently compelling in its design and statistical power that it can change minds.”
Since its publication, liberals have given the study hyper-skeptical treatment, claiming to find all sorts of shortcomingswith its methodology, data set, and so on. They point to a different study, from the University of California at Berkeley, which examined the law’s effects on the restaurant industry and found no statistically measurable effect.
Even Seattle’s political leaders are piling on, although they commissioned the research in the first place.
The idea that the price of something has no effect on demand for it sounds pretty funny, coming from liberals. After all, progressives generally support raising taxes on cigarettes to discourage people from smoking. Last November several cities joined the growing list of liberal demesnes that have imposed soda taxes—Berkeley, Philadelphia, San Francisco, etc.—to discourage consumption of sugary drinks. Heck, some localities even have firearms and ammunition taxes. One of them, in fact, is Seattle—where gun sales have dropped as a result.
The cognitive dissonance can be head-spinning. On Sunday, The New York Times ran an editorial dismissing the study on Seattle’s minimum wage. This was the same editorial board that exulted, “A big tax on sugary drinks in Mexico appears to be driving down sales of soda” a couple of years ago. On Monday, the paper’s David Leonhardt praised Seattle’s tax on sugary soft drinks, asserting that such taxes “work as intended … people in those places are … drinking less soda.”
Yet supporters of the minimum wage insist wages are somehow different. They point to research purporting to show that small wage hikes have no effect on employment. That might be true—just as small hikes in cigarette taxes don’t change the behavior of smokers, and small releases of carbon dioxide into the atmosphere don’t affect planetary climate. Different goods and services have different price elasticities, just as different greenhouse gases have different radiative forcing effects. But it does not follow that just because a small increase has no effect, a big increase will have none, either.
Yet when it comes to wages, liberals want to suspend the iron laws of economics—or at least pretend they don’t apply, despite mountains of evidence to the contrary.