Posted by
JDComments on Wednesday, January 10, 2007 12:14:29 PM
John Stoessel and Steven Pearlstein of the WaPo have laid out their opposing views regarding raising the minimum wage and have therefore given us an opportunity to assess the logic and practicality of their two very different perspectives.
Stoessel has basically espoused the commonsense
opinion that , there being no such thing as a free lunch, someone has to pay for the raises, and the most likely group to be hurt are the lower rung employees who will lose their jobs.
As he says, this is just supply and demand, a basic economic law which you would think even a Liberal would have to acknowledge. He also makes the trenchant observation that if raising the wage by fiat were truly a solution, than why not raise it significantly and take everyone right up the food chain? The stupidity of that idea speaks for itself, as Stoessel intends it to.
Now to prove that the concept of supply and demand has not quite filtered down to all Liberals, Pearlstein makes the Leftist
lament for raising the rate, calling it the "economical, political and moral " thing to do. Put like that, who can argue with it, right? I mean, it seems kind of petty to point out the delusional basis of his reasoning, doesn't it? Well, its a thankless job, but someone has to do it.
To begin, Pearlstein , as Liberals love to do, makes it more complicated that it has to be, a favorite Liberal ploy to confuse the masses, by arguing not so much for the minimum wage increase as against the countervailing tax breaks for small businesses that are being offered as part of the political negotiations, in the process taking a meanspirited swipe at Max Baucus for not being " Democratic" enough. Liberal tolerance once again notable for its absence.
To briefly summarize his points, Pearlstein's argues that raising the wage will not hurt businesses because they will just raise prices, resulting in a "little inflation", that economists generally agree that adult employment will not be affected, that small businesses don't make that many jobs anyway ,even though he himself says they account for half of all job creation, and lastly, most small businesses are tax cheats so we should be prosecuting them not helping them.
So for Pearlstein, there is a free lunch, or at least you don't have to pay because the restaurant owner is a thief. And you probably thought he didn't know what he was talking about.
But let's consider his arguments. First,a "little" inflation always hurts the lower classes, who are the earners of the minimum wage, disproportionately, and so Pearlstein is in effect giving with one hand and taking away more with his other, but I guess he just doesn't see this.
As for "most economists" not seeing employment being hurt, his list must start and end with Paul Krugman, because everyone I read still abides by that supply and demand thing, which Pearlstein seems to have willed into non existence.
The last two points are actually irrelevant to the case for raising the wage, instead being the justification for not helping small businesses to weather the effects. Thus the fact that they may not create the majority of new jobs means that we should just hang them out to dry, and besides, they are tax cheats and they deserve it anyway. This is just liberal populism and not worth rebutting, and so I will leave it at that.
So the gist of his argument for raising the minimum wage consists of accepting the resulting inflation , and dismissing out of hand the the possibility of job losses, while throwing in some class politics just for good measure. So is that "political, moral and economic" righteousness justified?
Morally, you are nominally giving a raise which you know will result in a surge of inflation which will leave your constituents worse off. Economically...well economically you are ignoring the basic laws that are the foundation of the dismal science and just declaring jobs won't be lost .
Politically however you score all sorts of big points with those lower income people who have been brainwashed into believing their victimhood can only be solved by Big Government free lunches.
Suddenly Pearlstein is starting to make sense.