Arnold Kling  

Economists for a Higher Minimum Wage

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Daniel B. Klein and Stewart Dompe want to know why some economists favor raising the minimum wage. Here is one example:


Arindrajit Dube: Increased income (and reduced inequality) has broad effects throughout society and polity; this includes (but is not limited to) increased self worth, increased ability to use added time to spend with kids, attend community college, etc., from an income effect.

...Paul Swaim: Given the very high value placed on self-sufficiency in the US, I think it is important that adults working full time can earn enough to make a substantial contribution to supporting a decent living standard and take pride in their status as workers. Put differently, people playing by the rules should not feel like total losers (or be considered as such by their fellow citizens). The minimum wage can probably make a modest
contribution to approaching this objective.


These folks are assuming (a) that a rise in the minimum wage helps poor people and (b) that the issue is important to adults trying to support a family. If those are their beliefs, then they appear to suffer from economic illiteracy. Russ Roberts occasionally tries to educate journalists about how the economy works. Maybe he needs to hold seminars for economists.

Pointer from Tyler Cowen, who pulls many more quotes.


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CATEGORIES: Labor Market



COMMENTS (6 to date)
Matt writes:

This seems like another attempt to try to change the meaning of words, like "vertically challenged" instead of short. The reason why people might be considered losers for working minimum wage is that it is the lowest legal wage. Raising the minimum wage guarantees that more people will be earning the lowest possible wage, thus creating more losers.

aaron writes:

Why would someone make it their objective to make these people feel like losers?

people playing by the rules should not feel like total losers

The fact that someone is making only the minimum wage is a stigma in itself. Raising that floor will make more people hit that level. Thus, more people will be branded as "minimum-wage employees", and feel worse about themselves rather than better.

Bisaal writes:

You will find many Indian-borns in this list (of economists who prefer to raise minimum wages).
I think most Indian economists come under the category of economic illitrates (I speak as an Indian). In Indian, economic thought is Maxist-dominated (You will not find Hayek in the library of best Indian universities).
The Indian economists get academic positions in US generally because they tend to be good at mathematical manipulations.

Jason writes:

How about Dube's parenthetical? I would like to hear someone explain how reduced income inequality leads to broad effects of people having more time to spend with kids, for college etc. In fact it can be explained that the government's preferred method, taxation of income and redistribution leads to everyone being worse off, not better.

Leah T writes:

Being a college student, I believe raising the minimum wage is a good thing. When a young teenager is starting out- becoming independent, paying for their own things, driving, etc.- they should feel that their efforts of obtaining a job are worthwhile. However, I don't think being paid the minimum wage in our society should necessarily mark someone as a "loser". It doesn't. People who make the lowest, legal wage make themselves feel that way because they see others making six figures or something and envy that. They ask themselves, "Why can't I be like that? Why am I not making that much?". But, I don't think just by having a job that pays minimum wage marks a person a loser. A person should be proud of how much they're earning; no matter how low it may or may not be. I'm sure someone who is raising a family and has children to clothe and feed might feel differently. But, being a minimum wage employee is not a terrible thing. I have no problem with it, though I am quite happy that the amount has increased.

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