Garett Jones  

Assorted Tweets: Minimum Grade Law Edition

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Christina Romer on the Minimum... The Robber Barons: Neither Rob...
1.  My colleague Don Boudreaux wrote a faux news article where politicians pushed for a "minimum grade law" to help struggling students. It's just a matter of simple fairness, of course.  I tweeted:

Extra bonus of Boudreaux's Minimum Grade Law: banning Fs means more diplomas, higher wages for neediest students

If we raised the grades of the weakest students, those students would be more likely to graduate, which would boost their wages on average.  As a matter of simple humanity, how can we not help out those with poor life prospects: those with weak grades?  

The progressive counterargument to the MGL would likely be that we should instead improve the learning process for the weakest students  But when "raising worker productivity" through better education (or perhaps legal unpaid interships and apprenticeships) is used as a counterargument to a higher minimum wage, we hear: Why not either/or when we can do both/and? The same both/and approach should apply to the MGL.  

I genuinely believe that if economists did a decade of empirical research into whether a "minimum grade law" created more harm than good the research would be inconclusive. Who agrees?  

2.  The "precautionary principle" is strong risk-aversion applied to policy issues:

One upside of the minimum-wage debate: it's thrilling to watch progressives reject the precautionary principle so thoroughly.

There are plenty of stories about how the minimum wage could hurt low-skilled workers a lot in the long run--cutting off the bottom rung of the ladder of opportunity--and there are plenty of stories about how lax environmental regulations could hurt human health a lot in the long run.  Better to play it safe, no?  

3.  Finally this from the great Dan Rothschild: 

[Tweet feigning outrage that politics continues to be political and engenders political behavior among politicians.]


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COMMENTS (9 to date)
Thomas Sewell writes:

Excellent advertising method for your twitter account to cross-post tweets here! I commend you. I also followed you on twitter, although as you only follow 50 people right now, I suppose I'll have to despair over your ever following my little twitter account under @Sharper31, even though I actually linked to your hilarious article on twitter a couple of hours ago, before even reading this.

I also enjoy your precautionary principle point. There are plenty more examples... i.e. who would drink any water at all if they weren't 100% sure it was safe from contaminants? I mean, how can you be sure it won't eventually kill you? After all, people have signed petitions to get it banned completely, so there must be something there to worry about...

P.S. In case you are wondering, although I can see a bit of a tone there at the top which you should take as meant a little playfully, I'm more serious than not. Nice posts, in other words.

Tom West writes:

I don't think the analogy of marks vs. wages holds.

Marks are presumably awarded in relation to your work (which equates to your marginal product in the workplace). Minimum wage, on the other hand, is meant to address the situation where labor does not have the market power to command something close to their marginal product.

The closest analogy might be a professor who only needs a certain number of students in his class to be paid for teaching it. Seeing there are many more students who want to take the class (and wishing to save himself teaching and marking effort), he drops the marks in the course until the minimum are left.

In an environment like that, you might have a minimum mark movement!

(Actually, I think I *have* had courses like that :-). Professor had 140 students, he wanted 70. Brought his "special assignment" the next week. 20 of us graduated at semester end. Ah, memories.)

Wallace Forman writes:

Wouldn't it be better in terms of the LDP just to redistribute wages instead of grades? Likewise, to redistribute wages more, instead of redistributing grades and wages? Hard to fault progressives for neglecting an inferior strategy.

MingoV writes:

"If we raised the grades of the weakest students..."

There is no "if" about it. Less stringent admission standards, a plethora of Mickey Mouse courses, and grade inflation allow mediocre students to attend college and get degrees. Some college courses are taught at a high school level. Colleges are giving students credit for Remedial Algebra! The average college grade now is a B, and it soon will rise to a B-plus.

Brian writes:

Tom West,

You say "Minimum wage, on the other hand, is meant to address the situation where labor does not have the market power to command something close to their marginal product."

No, not really. The minimum wage is and has always been about income redistribution. Some people just don't like the idea that the marginal product of some workers is low. Consider what Christine Romer says in the article mentioned in the previous post:

"Instead, most arguments for instituting or raising a minimum wage are based on fairness and redistribution. Even if workers are getting a competitive wage, many of us are deeply disturbed that some hard-working families still have very little."

Actually, removing grades below C- would just result in compressing grades into a narrower range: C- as the new F.

You could fool some people for some time who are not aware of the change. But eventually, everything would be the same. No real problem here, apart from the transition perhaps.

That's not true for a minimum wage (in real terms at least) where getting more pay means you can exchange your labor for more goods. That's not going away because it is not just a different label for the same thing.

The argument might even backfire: If there is no problem with limiting grades to a narrower range, then there is also no problem with a minimum wage, right?

Ajb writes:

Actually the elites already do it. They've virtually abolished the F while restricting entry to top schools. Because of their monopoly power other schools that attempt higher standards get hurt. I note that schools like GMU get hurt when students fail out. It is penalized in rankings for not graduating enough of its students. A non elite that gives out meaningful grades harms even those who graduate by weakening their ability to go to med school etc. whereas a de facto minimum B at HYPS has made them even more desirable in the marketplace.

Tom West writes:

Some people just don't like the idea that the marginal product of some workers is low.

Except minimum wage laws can't make water flow uphill. If the marginal product is below the minimum wage, then the job will disappear (which does occasionally occur). The rest of the time, the workers are earning more of their marginal product than before, a situation that could only occur if they lacked market power and were earning less than their marginal product.

Instead, most arguments for instituting or raising a minimum wage are based on fairness and redistribution.

What is fairness? Yes, for many, it's the idea of wages being associated with effort, but for many others, it's wages being associated with marginal product. If my unskilled laborers earn me $100/hour, but I only pay them $7 because there are more unskilled laborers than openings, many people will feel that it's unfair.

And yes, redistribution certainly plays a role.

So yes, the reason for addressing the lack of market power are the feeling of fairness and redistribution, but minimum wage laws only work if unskilled workers lack market power.

Floccina writes:
I genuinely believe that if economists did a decade of empirical research into whether a "minimum grade law" created more harm than good the research would be inconclusive. Who agrees?

I agree and interestingly I think that those who are strong believers in the human capital development theory of schooling would/should support the policy of making school easier and more enjoyable. They would see a downside in that it might make students work less hard but I would think that could be partly overcome perhaps by more class time and individual instruction and the upside would be much bigger.

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