An Incoherent Argument Against Higher Minimum Wages
June 18, 2024 | 592 words | Economics, Philosophy
A day after the Ross Douthat – J.D. Vance interview appeared in The New York Times, Eric Boehm writing for the Reason website chimed in to question Vance’s idea of economic populism, by offering the standard libertarian defense of letting market forces determine wages.
When Mr. Boehm writes: “But if your job is lost to marker forces – because someone else is willing to do the same work for less – that’s a problem he (Vance) implies the government has a role in solving,” I had to stifle a belly laugh.
Because someone is willing to do the same work for less? Honestly, Mr. Boehm, do you really believe people routinely “work for less” of their own free will?
To clarify, I am not “someone who favors greater government intervention in the economy.” Nor do I like the idea of government “picking winners and losers,” which is something else libertarians are always complaining about.
Arguing in favor of higher wages is not a matter of, as young Mr. Boehm asserts, thinking government officials know exactly what levers to pull and what incentives to offer. Or thinking government officials know that a $20 per hour wage is enough, or can gauge how many factories a town or state needs, or which jobs are important enough to protect.
No reasonable person thinks government officials hold the answers to such questions. But some of us also realize that leaving the compensation of working people with no leverage to the largesse of the ownership class is not the best way to preserve or enhance the social fabric of society.
Mr. Boehm selectively quotes Mr. Vance’s ideas about economic populism to critique them, but he strategically avoids mentioning the lead-in paragraph that spells out Vance’s definition of the problem:
“The main thrust of the postwar American order of globalization has involved relying more and more on cheaper labor. The trade issue and the immigration issue are two sides of the same coin: The trade issue is cheaper labor overseas; the immigration issue is cheaper labor at home, which applies upward pressure on a whole host of services, from hospital services to housing and so forth.”
(What Vance is saying, just to be clear, is that when you have a domestic population making very little money, that portion of the citizenry is going to have trouble paying for basic needs such as hospitals and housing, etc. and will need assistance of some kind, from some source, to do so.)
To hear Eric Boehm tell it, there is no problem in this country relative to wage levels. We can sit back and let the immutable scientific law of supply and demand determine what people should be paid.
This boiler plate libertarian explanation of how the economy should be allowed to function does break new ground in one important respect. Boehm concludes that those on the right who express concern for low-end workers lack humility:
“Conservatives used to have enough humility to recognize that government officials won’t have the answers to all these questions.”
Well, Eric, that is certainly a novel way of looking at the situation. Here is another, slightly grittier way:
The social fabric of our country would benefit from political leadership willing to defy the donor class by enforcing antitrust laws. Encouraging the growth of unions to balance the influence and power that capital now exerts in the marketplace would also be a good move. With the goal being to help hard-working Americans access their fair share of the financial rewards being generated by our booming economy.
Robert J. Cavanaugh, Jr.
bobcavjr@gmail.com