Editor:
Michael Lind’s misunderstanding of the argument against the minimum wage is unfortunate (“The big lie of the libertarians is wagesMay 9Th) – for at least four reasons.
First, the argument that Lind seeks to debunk is not a libertarian argument, but an economic one. Most economic studies Continue to find That’s what he said. Low wage injury a lot Low skilled workers They seem to help each other.
Second, the false argument comes from the only example provided by Lin A Forbes Column by Tim Warstall from 2014. In the never-ending debate over low wages, has there not recently been one as worthy of a penetrating professional intellectual force as Mr. Lind?
Third, although this fact is not mentioned in Lind’s screed, Worstall’s column focuses on reporting the empirical results of studies that claim that minimum wage increases are at the cost of output produced by low-wage workers. But Lind will do Worstall has rejected all arguments related to the minimum wage, saying he made a grave mistake.
What is this serious error? Speaking in Lean, it is Worstall’s out-of-touch belief that almost all buyers of goods and services are low-wage workers themselves. But a proper reading of Worstall shows that he, Worstall, is only guilty of weak words. By Lynn as “Gotcha!” Here is the article from Worstall’s column in question:
And I would actually go further. Low-wage or near-wage workers, generally consumers of goods made by other low-wage, low-wage workers, are themselves low-wage workers. So it’s not entirely clear that they were all better. Despite their higher wages, those low-wage workers are also bearing the brunt of the new higher price pressures.
However, Worstall wrote about his research findings in the paragraph before this one: “Or you could look at it like I did and point out that everyone in the country is worse off with those high prices.”
Worstall clearly high prices are paid by Everyone.
Worstall’s writing in the passage cited by Lynn is indeed careless. I know Tim Warstall, and I’m sure he means this because low-wage workers buy most goods and services, so their prices go up at minimum wages – and workers’ incomes are below average. – These workers suffer from the burdens of these price increases more than the burdens of higher income workers.
Fourth and most fundamentally, even if so Worstall is guilty as Lyne charged, which Lyne erred on the evidence of.
[o]One of the most common arguments against higher wages and benefits for low-income workers is that while higher wages may make some workers better off, they also make others more expensive by making the goods and services those workers provide more expensive. Low-wage workers are worse off as consumers.
In fact, the argument presented here by Lin is far from being “one of the most common”. Absolutely It appears in the case made by economists – or libertarians – against the minimum wage. By far the main and most common economic (and libertarian) argument against minimum wages is that these wages artificially increase the cost of hiring low-skilled workers and put more low-skilled workers out of work. So these workers are denied not only current income, but — and most importantly — the work experience that would be a ticket for many of them to higher-paying jobs in the future.
Lynn enjoys arguing against libertarians who oppose the minimum wage. But if he wants his ramblings to be taken seriously, he needs to at least get straight to the heart of what he dismisses as the libertarian argument. As long as he doesn’t do this, he and his readers will only enjoy killing off a very broken straw man.
best regard
Donald J. Boudreaux
Professor of Economics
And
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
