Weird Bullet-Biting by Minimum Wage Proponents

It's frustrating how the argument sometimes changes from "minimum wages have no effect on unemployment or job counts" to "those were bullshit jobs that shouldn't have existed anyway."

I'm thinking of a few recent examples from social media. Someone had posted a picture of the checkout counters of a store, where almost everything had been converted to self-checkout. This was from a state that had recently increased its minimum wage. The point was that it's easier to staff checkout counters with people if your store is free to set the wage. These are obviously low-skill, entry-level positions. Stores cannot afford to pay an arbitrarily high wage to these employees, so those jobs start to disappear when the minimum wage is raised high enough. Anyway, someone chimed in with a comment such as (paraphrasing): Those are demeaning jobs, and they should go away anyway. I guess that's fine if it was always your position. Someone could claim to be internally consistent if their position was that the minimum wage should be raised in order to kill off the "demeaning" jobs. (I find this to be an incredibly arrogant position and think it's insulting to low-wage earners, but I could imagine someone believing it). What makes it less believable is that these are often the very same people who argue that minimum wages have no impact on unemployment. They are inventing a post hoc rationalization when the bad consequences of their policy come to fruition (which they were warned about, and which they often explicitly denied would happen).

I hear this point expressed in different but similar language. When I have attempted to argue that a job might we worth doing at $5/hour but not at $7.25/hour (much less at the incredibly irresponsible $15/hour minimum some are proposing), sometimes minimum wage proponents implicitly acknowledge the point by saying "If you can't pay the minimum, you shouldn't be in business anyway." I've also heard, "You have to pay to play" from someone making the same point. I wrote about this here in my summary of Jonathan Meer's debate with Jamie Galbraith. Galbraith at one point bizarrely admits that some jobs will disappear, while maintaining adamantly that there will be no net loss in employment. (Galbraith's point: "Sure, you'll see some disruption. The whole point is to change the structure of the labor market.") This is weird. Someone is admitting that there are low-valued tasks out there in the world that might be worth doing. They are acknowledging that some entrepreneur could feasibly organize some (probably low-skilled) employees to do these tasks at a wage those employees would accept, a wage which is below the current (or proposed) legal minimum. But they are borderline gleeful about destroying such jobs.

For another related example, listen to this episode of Econtalk with Jacob Vigdor, in which he discusses Seattle's experience with a very large increase in the minimum wage.

And I'd say that there are not a whole lot of people who express optimism about the future of low-wage employment. I had a political operative from the Seattle Mayor's office come visit me a couple of years ago. This particular staffer from the Mayor was wondering if I would be willing to sort of go out in public and advocate for a higher minimum wage. And, I responded by saying, 'Look, that's not my job. I'm not an advocate. I'm a researcher.' And I mentioned to him that our research was actually showing that there were some potentially adverse impacts of Seattle's minimum wage. And he responded to me by saying, 'Well, in the long run, aren't these jobs going to go away anyway?' And so, this is coming from someone whose job description is to be a minimum wage advocate.

Emphasis mine. Just think about the contempt for low-wage workers that this reveals on the part of their political "advocates." I should acknowledge here that the politician in question isn't necessarily wishing these jobs to go away, as I've heard some people do. He's just observing that they probably are going away regardless and not feeling too bad about hastening their demise.

This doesn't make any sense, at least not if someone is insisting on both the "no net job losses" story and the "those bullshit jobs should go away anyway" story. Supposedly there are people who would be in business hiring people for $5/hour, if we would let them. (And, importantly, there are workers who would willingly accept that wage. The willing consent of the workers is often overlooked or dismissed as "acting under economic duress" by minimum wage advocates.) If the "no net job losses" story is true, that means there are also, simultaneously, people willing to pay (for example) $15/hour for those same employees. Employers pay the wage necessary to attract the labor they need, but only up to the point that it actually pays off to employ that person. In other words, employers basically pay employees for their productivity. Supposedly there are employees who can coax $15/hour out of any given employee, but would be reticent in a world where the minimum wage was still $5/hour. These employers would supposedly sit quietly and let someone else buy up all the labor at $5/hour, even though these more productive employers could easily get an additional $10/hour of productivity out of them. Supposedly they know the secret formula for coaxing productivity out of low-skilled workers but will only do so if we make them? (Because, I don't know, they don't like money?)

Maybe I'm tying myself into a knot trying to make sense out of this. Most people are just sleep-walking into their political beliefs; they don't really have a coherent viewpoint or a well-articulated picture of their policies playing out. Their "ideology" is a bunch of ad hoc responses to criticism thrown together in a slap-dash manner, with nobody checking to see if the bullet points contradict each other (or common sense or economic theory or empirical studies).

In my preferred story, there is no contradiction. The minimum wage proponents are wrong on both fronts. Raising the minimum wage causes net job losses. The best minimum wage studies to date confirm the Econ 101 story, and find that the effect is quite large. And those low-wage jobs, the ones that are already killed off or would be killed off with another minimum wage hike, are perfectly legitimate options. Third parties should not be in the business of judging the morality of someone else's labor contract. If you aren't actually doing the hard work of figuring out how to put low skilled workers to work and getting high productivity out of them (and I absolutely salute you if you are such a hero!), if you aren't actively bidding for those workers' labor because you have a better deal to offer them, then it's really not your business to judge someone else's arrangement. This is coming from someone who generally tries to stay out of the "who holds the moral high-ground" game, because it's such a quagmire. But since some people come to this argument with nothing but moral rectitude, I should point out that minimum wage opponents have a good reason for thinking they also hold the high ground. That's why "I hold the moral high ground" doesn't get us anywhere.