Friday, January 05, 2007

Minimum Wage Silliness

Via Noah, one of the silliest minimum wage articles I've ever read.

As you probably know, the Dems are busy buying votes by raising the minimum wage for the first time since 1997. It's part of Pelosi's 100 hours stunt. Never mind that the bill is (sadly) uncontroversial, will almost certainly be ineffective, and that a similar bill passed the House last year anyway. The Democrats are entertaining their normal fantasies that they're the party of the "little man." The condescension of this self-image aside (it's based, you see, on the belief that large portions of the population are completely incompetent and therefore incapable of bettering themselves without BigGuv assistance) - their version is particularly twisted. In Democrat La-La Land, price controls and regulations are somehow good for the "little guy" - you know, the one most likely to lose his job if the price of regulations requires cutbacks, the one most likely to suffer from inflationary price increases as the result of a confiscatory tax policy (since living costs are a greater portion of his income), etc.

Whatever. The Republicans - President Bush in particular - aren't helping. The bill will pass with little opposition.

And so what if it does? The greatest irony about the whole debate, really, is that it doesn't much matter. Only about 0.6 percent of the workforce actually makes minimum wage, and sizeable portions of them either have other jobs, or are students who only need supplemental income anyway. Statistically speaking, there's hardly anyone out there who actually "needs" this increase to begin with.

Alright - but what about those who do? Won't this help them? Well, I guess it will, yeah. And since there are so few of them out there, the impact on the economy is likely to be minimal anyway. It'll be a bit more expensive than Florida's highly-publicized 2004 minimum wage hike, but it's not a bank-breaker by any means. Ultimately, what it is (as I said), is just a way for the Democrats to paint themselves as friends of the poor. And that's why the "small-government" (giggle) Republican Party won't be opposing it - because who wants to be seen as anti-poor?

Of all the regulatory schemes, the minimum wage is probably the most obviously self-defeating. All it takes is a simple thought experiment to see why. Sure, we can raise wages from $5.15 to $7.50 slowly over the next 5 years. Since most people already make $7.50 or more anyway, this isn't actually going to affect anyone's lifestyle - at least, not in statistical terms. And since it's being phased in slowly, the marginal costs (i.e. having to pay other people already earning $7.50 even more to keep them around) will be relatively painless. Well, one might reasonably ask, if this isn't helping anyone really, then why are we setting it so low? Shouldn't we maybe raise it higher - oh, to say $9/hr or something? Ah, but of course then we'd see effects. Then someone already paying well above the current minimum (say, $7.50/hr) would find himself with sizeable cost increases on his hands. And he might, you know, raise prices to compensate, or lay people off, or freeze hiring for awhile, or something. And naturally, the higher you raise it, the more problems of this kind there are. The truth is that most employers already pay the majority of workers at something close to the equilibrium level anyway. Our economy isn't a free-market economy, but it's something like one, and people, by and large, get what they earn. If the government decides to send wages through the roof all of the sudden, there will be effects. And they know this, and so they don't. As Rich Lowry aptly puts it, "If we could buy people into the middle class, we'd have done it by now."

So for the most part I tend to ignore minimum wage discussions. I know it's a bad idea, and I know it doesn't help the people it's supposed to (or anyone except the political class, really), but in the giant scheme of BigGuv regulations, this country more or less learned its lesson about Minimum Wage some time ago, and thankfully there's no one on the scene kooky enough to raise it to any truly damaging level. If the economy's going to tank because of our government, it's more likely to do so on account of Medicare, Social Security, corporate taxes (way too high at present), spending deficits, or any number of currency and price-fixing schemes. So I usually don't pay much attention.

But today, thanks to Noah and against my better judgment, I found myself reading the post linked above by one Mr. "Nitpicker" on Glen Greenwald's Blog. And I'm glad he tipped me off, because this one is a bit sillier than most. It isn't, you see, just about the minimum wage, but it also wants to somehow bring Catholic theology into the picture and argue that good Christians should support this bill.

Alright - well, where to start? First with the mundane facts, I guess. We get the typical uninformed argument in favor of minimum wage increases by citing Florida's recent wage hike. See, Florida raised its state minimum wage in 2004 via a constitutional amendment that pegs it to the rate of inflation (or the CPI or some relevant economic indicator, I can't remember which). As minimum wage policies go, it's therefore pretty sensible (since it doesn't base its figures on what people "think" the wage should be). Well, some pundits in Florida leading up to the passage of the bill predicted economic disaster - but Florida's been doing just fine since then. So QED, right? Two years ago, Florida raised its minimum wage, Florida's still doing just fine, ergo all and every minimum wage increases are peachy? As arguments go: YUCK! All it takes is about 18 keystrokes to get a good Google search on the subject, and the data definitely doesn't support the idea that one isolated case of an economic boom in one state that happens to coincide with a minimum wage increase that also affected almost no one somehow proves that minimum wage increases in general are good for all. Some prominent counterexamples include the UK's minimum wage law in 1999, which has (obviously) been more carefully studied than Florida's - the general conclusion about which is that employers have reduced hiring, reduced staff hours, and raised prices. Whodda thunk it? More relevant to the US, I wonder if Nitpicker has bothered to read this accessible paper on the subject, or this column, or even the Wikipedia page? Really, honestly and truly, I know I beat this dead horse biweekly, but people generally uniformed about statistics (and things like the third variable problem) should either get informed or else stop trying to think without assistance.

But the real hoot was the attempt to conclude from Catechism that supporting the federal minimum wage increase is a good idea. I mean...!!!

Alright - to be fair, what he was really pointing out was that lots of people in the Religious Right pick and choose which pieces of their religion they think God is serious about. And that's certainly true enough. The case in point here was some commenter on National Review's blog "the Corner" who apparently defended his opposition to the minimum wage increase by citing his "Catholic bona fides" (unspecified in post) and then claiming that the Church only requires the payment of a "just wage." Nitpicker rightly points out that the Church's definition of a "just wage" goes a bit further than "what market price will bring." As it turns out, Catholics are required to pay wages that also take into account the employee's expenses and standard of living. I'll leave it to the curious to click the link and read the actual quote. The point that Nitpicker was trying to make was that anyone who cites Catholicism as, say, a reason for opposition to abortion is also required to support fair wages.

But so what? None of this is remotely relevant to federal minimum wage laws! Thanks to the Establishment Clause, the government isn't supposed to endorse any particular religion. That includes, at last check, Papism and Saint Worship. So the Catholic Catechism has exactly ZERO relevance to what the US Government decides to do about abortion or the minimum wage. The best that can be said about Catechism is that it requires Catholics to (a) forgo abortion (apparently even in cases of rape) and (b) pay their workers a church-approved wage, provided they hire any. Fine - anyone who believes in Catholicism should, in fact, do these things. My question is what this has to do with the rest of us?

I mean, I admit, I appreciate the irony that people quick to invoke "God" when it comes to abortion might find "God" on the other side of the fence on other issues, granted. But God is not in the US Congress. If He were, we wouldn't need to bother with all this Constitution and Courts nonsense since He could just dictate according to the Order of the Universe He created and all would be well, right? Back to Eden? The fact that God is NOT manifestly present is the WHOLE REASON we want a secular government! Short of everyone having direct communication with God, all appeals to God amount to in normal human discourse is just "I said so, that's why!" God is the ulimate discussion killer - because you either share the speaker's perception of what God wants and therefore have nothing to add, or you don't, and therefore have no ground to stand on in trying to convince the speaker he's wrong. Public discourse simply cannot proceed in this way. And so our wise Founding Fathers tried to ensure that it would not - by leaving religion off limits to Congress.

So - let's please please please please please leave religion off limits to Congress! Consult God on your own time, and live your own life accordingly. But do NOT try to boss the rest of us around on the basis of your arbitrary feelings! I can think of very little that's LESS appropriate to how to run the United States than what the Vatican thinks we should do! The Vatican can and should stick to running its church. (As I understand it, it already has its hands full with that little task anyway.)

And in fact, nothing in the bit of Catechism posted alluded in any way to federal wage policies. All it said was that wages should be just - and then went on to elaborate on that a bit. The implication for me was that this is meant to be a guide for believers in their personal transactions. I have no (political) objections to that.

Alright - end of rant. Really, it isn't worth my time, because people are going to go on looking at star charts, spinning wheels and talking to God about public policy - I know they will. I just really wish they wouldn't. People need to learn to leave each other alone. If Catholics are concerned about the morality of the world, then they are free to go out and try to convince people to change. But they aren't allowed to do it at the barrel of a gun - which is what passing laws legislating your own private morality ammounts to.

In the end, I'm opposed to minimum wage hikes, not for any immediately practical reason (as I've said above, there's reason to think it will not have much effect on the economy in the end), but just because they're yet another way the government bosses us around. There are more pressing regulatory concerns to be sure - but in its own small way standing up to minimum wage increases plays a part in dismantling the whole ugly apparatus. So here's hoping (against hope) that somehow this bill doesn't pass. Oh yeah, and I don't give a fig what the hell the Vatican's opinion is on this - or pretty much anything. Thanks for playing.


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