The Minimum Wage Debate

First, let me state this strait out: I am not in favor of the minimum wage, just as I am not in favor of the government interfering with the rights of any two people to form contracts freely with each other. The few areas where I am in favor of government intervention in the economy at all, is in providing safety nets for the population. My reasons for being in favor of some safety nets are not economic, but prudential. Societies where the poor and disenfranchised are looked after and not allowed to starve tend to be safer and more stable societies. More over a just and moral society should not be allowing large swathes of its populations to starve.

Secondly, the minimum wage debate, like all highly political debates, is one that is fraught with cherry picked and heavily massaged statistics as well as outright falsehoods. Both sides of the debate have ample numbers to throw around, and neither side is particularly interested in listening to the other. The reality is then, that the criterion that decides peoples' views on this subject is their political view of the proper role of government in society, and not the prudential one of what the actual effects of minimum wage laws.

Thirdly, even acknowledging all this, the minimum wage remains an area that journalists, economists and even philosophers like to debate. The political left likes to point to statistics that show little immediate change in employment after minimum wages are increased, while the political right likes to point to statistics that show states with higher minimum wages tend to have higher youth and minority unemployment rates and that increases in the minimum wage do not yield improvements in the poverty rate. Why is there no consensus? Again, politics.

So, with that said, I recently became aware of a decent article, recommended by Harvard economics professor Greg Mankiw here: http://gregmankiw.blogspot.com/2013/12/minimum-wage-redux.html , by Steven Landsburg, himself an economics professor at University of Rochester, here: http://www.thebigquestions.com/2013/12/02/minimum-insight/ and in more depth here: http://www.thebigquestions.com/2013/02/18/thoughts-on-the-minimum-wage/ . And while I don't necessarily agree with all of his arguments, I think they are both thought provoking and should help inform readers on the economic and political debate over this particular public policy problem.