There’s an old saying: “If you want to hear a dumb opinion, ask someone their thoughts on the minimum wage”.
1 result (0.53 seconds). In other words, that "old saying" was coined specifically for this essay.
In a series of three posts, I’m going to describe a few economic approaches to analyzing minimum wage laws.
Thereby amply demonstrating the above adage. Minimum wage laws aren't about economics, they're about civics and welfare. From a capitalist standpoint, Dickensian workhouses and Calcutta sweatshops are the best economic approach to wages. After all, market forces will maximize efficiency. Minimum wage laws, by inspection, are inefficient from an economic standpoint. Their function is not to improve the economics of a society but to improve the welfare of a society.
Workers want a lot of things from employers. Mostly they want wages, but also a pleasant workplace, stability, good conditions, and respect.
Workers want more benefit from working than from not working. Serfs ceased being serfs when they were better off putting noble heads on pikes than they were working land as chattel.
Employers want several things from workers too, mostly labor but some of the above as well.
Employers want a greater benefit from employing someone than from not employing someone. So long as there is benefit in paying a worker fifteen cents an hour and forcing them to sleep in flophouses, employers will do that. This is a maxim that has been held unassailably true from Adam Smith to Milton Friedman. Smith argued that regulations were necessary to keep businesses from being horrible; Friedman argued that because businesses were horrible it was proof that our society doesn't value non-horrible businesses.
I won’t keep you in suspense – I think that minimum wage laws are a huge mistake, both economically and morally.
Color me shocked. I will wager, however, that you cannot demonstrate this in a logical, non-fallacious way.
The call is to force WalMart to raise its minimum wage to $15/hr, because some percentage of their employees use government assistance.
Left unsaid is the argument that if WalMart cannot turn a profit without reliance on government subsidy in the form of welfare and SNAP assistance for its employees, WalMart should not be in business. It's hilarious how libertarians and capitalists always assume as a maxim that Walmart is entitled to be in business regardless of the social cost.
$20B is more than WalMart’s entire net income. There is simply no way for a company with such tiny margins to increase its costs without transferring the entire increase to prices.
And, in those arguments so sweepingly dismissed, is the argument that WalMart managed to destroy many smaller businesses because as owner-operators they had to pay an equitable cost of living or go out of business. The argument made by minimum-wage proponents is that Walmart leverages public assistance to outcompete competitors that are not eligible to do so.
Even at $10 an hour, WalMart gets more applications per open position that does Harvard.
This is an argument that the local economies inhabited by Walmart are depressed, not that Walmart is a more desirable place to work than Harvard. Talk about apples and oranges: those scrambling for minimum wage and a blue vest are somehow equivalent to those scrambling to pay 63 grand a year how, exactly?
There is going to be a lot of economic theory in parts 2 and 3 of my essay, but the simple fact that higher wages at WalMart would cause a lot of pain to a lot of poor people doesn’t depend on any of it.
The simple fact that higher wages at WalMart would cause fewer poor people doesn't depend on any of it either.
I’m pretty sure that it never crossed the mind of people attacking WalMart’s wages to do the math on WalMart’s income statement.
You would be mistaken. However, "doing the math" in our case means evaluating whether or not Walmart is a viable business without subsidy, not whether or not walmart is profitable. It's interesting how the author considers profits to be inviolate while making an economic argument against minimum wage.
I think it’s because the core of their argument is about ethics, and not about making workers richer. Unfortunately, the ethics of the argument are just as perverse as the numbers.
I'm going to make an assumption, ignore everything else, and then paint how this assumption is wrong, therefore my opponents are stupid.
WalMart is a very convenient scapegoat for American poverty because WalMart does more for poor Americans than pretty much anyone else. In 2004, WalMart saved its customers $263 billion, which is more than all direct government welfare programs (food stamps, EITC, TANf etc.) combined.
Actually, the argument is that Walmart removed $263 billion from local economies. That their prices were this much lower is an argument against Walmart because, again, they are only able to do this through government subsidy. I don't know what that has to do with Copenhagen.
In contrast, a company like Apple doesn’t employ any poor Americans and doesn’t make things for poor Americans.
Nobody at Apple makes minimum wage because nobody at Apple does minimum-wage jobs. The liberal argument here is that if Walmart paid a living wage, more children of Walmart employees would be able to go on to college to work for Apple. This would increase productivity, GDP and wealth for all.
This shit isn't hard. This shit isn't novel. And pretending this shit is about a fucking misinterpretation of quantum mechanics in service of alt-right neoliberal talking points will never make it insightful.