Next small item, but not so small over the last two or three weeks...if you paid
attention to financial writing, you've seen the City of Seattle come back in a
different way. Not about voting for an income tax, a different issue. The minimum
wage, it turns out, a group of economists associated with the University of
Washington in Seattle did a study and it showed - this was very exciting for the
journalists - it showed that if you raise the minimum wage there will be some
workers who will be fired by their employer rather than pay that worker a
higher wage. This was thought to be a thunderbolt.
Two weeks earlier, a group of economists at the University of California in
Berkeley did a similar study - also focused on Seattle - in which they showed
that raising the minimum wage has no discernible effect on unemployment.
And so it went back and forth. There were editorials in the Wall Street Journal, in
New York Times, there were op-eds. Which is it? Is it that we can, like
the Democrats want, raise the minimum wage? Help those poor people, give them a
better wage? Or are the conservatives right by saying: shame on you
stinky liberals. You want to raise the wage. You don't realize it's going to lose
work, lose jobs for the people whose wages you raise when they get fired by
their employer. Now, it takes a level of credulity - that I don't possess - to take
seriously conservatives who are worried about unemployment of poor people.
It's not a position you find them championing terribly often. Like, never. So what
is this about? They don't want the minimum wage to be raised because
restaurants and other businesses want to be able to pay dirt-low wages. You don't
need a PhD for this, but what struck me and what I want to bring home,
is that professional economists - people like me - are spending huge amounts of
time debating whether we could or should raise the minimum wage, whether or not
there will be some people fired...what? If you give a happy damn about these people,
you'll raise their wage and give them a job. If private people lay
you off because they're not going to give you $8/hour instead of $7.25, then
if you give a dam,n the government comes in and hires them - which is what we did
in the 1930s for millions of people. The economists ought to be working out how do
you give people a decent wage AND give them a job because that's what our
profession ought to be doing. But no, we are debating whether we should raise the
minimum wage, lose a few jobs, or keep those jobs but give them nothing for it.
You know what this is like? This is like walking down a dark alley where you know
you shouldn't be, and suddenly what you feared accosts you: a nasty looking
fellow who says to you "I'm gonna give you a choice, I'm gonna get your wallet.
I'm either gonna get it by stabbing you, or I'm gonna get it by shooting you, but
it's your choice." Now imagine a person who starts to walk down the alley trying
to weigh these two, right? That kind person needs a lot of help because the
rational response is "I'm not accepting this choice, Jack, I am going to surprise
you because I've got a gun. Here it is." Or, whatever you can do, but you're not going
to weigh these two because they are equally awful. You're going to try to use
your brain to figure out: how do I get out of this situation? Not, how do I
choose between these outrageous impositions?