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Not really in the mood to write about this – we live in a world of economic creationists. Nonethless, among the zillions of excellent logical questions one might ask proponents about it, only to be dodged, Jason Brennan (of Why Not Capitalism fame) asks this:

If you believe employers owe employees a living wage, do you think that an employer has a moral duty to pay an employee more just because she has more children? Suppose Bob and Jane are equally productive employees with the same background credentials and qualifications. Suppose they are getting paid the same amount, and both right now make an amount that exceeds the MIT living wage. But suppose Bob later has triplets, and as a result, suddenly makes less than the MIT living wage (since the living wage for a person with three children is higher than a person with none). Is the employer obligated to pay him more because of that? Suppose the employer decides to pay Bob much more than Jane because Bob has triplets, even though they are equally productive employees. Suppose Jane says, “Bob is getting paid $50 an hour, and I’m only getting paid $20, even though we’re equally productive. That’s not fair–he shouldn’t get paid almost three times what I’m paid just because he had kids.” Should we tell Jane she’s an evil and immoral jerk who just doesn’t care about social justice? Suppose Bob’s labor is only worth $23/hr to his employer. When he has triplets in DC, he now needs to make $50/hr to get a living wage. If the employer says, “I can’t afford to keep Bob on a living wage, so I’ll just fire him. After all, I care about social justice, and I don’t want to pay a worker less than a living wage.” Does the employer do the right thing?

Mr. Brennan will not be getting invited to dinner parties. And as far as his particular question goes, I don’t think Mr. Brennan realizes that almost every supporter of the minwage (and opponnent mind you too) has not thought this deeply about it, and has no need for intellectual consistency about it. It is NOT about that. The minimum wage argument (is there an argument) is a political one – with the typical in-group vs. out-group dynamics at play.

For a less politicized version of this question, consider how fair it is that so many workers make their fellow workers pay the “kid tax.” I do it too – on certain days I have to leave the office at 2pm just so I can go home and get my kids. No one seems to object to that, so perhaps people are perfectly accepting of the fact that these workers do in fact already get paid more! On the other hand, I tend to work at all times of the day to make up for it.

3 Responses to “Minimum Wage Question”

  1. Alex says:

    I always ask this question: “Isn’t it more plausible to think that if there’s some enforceable positive duty to provide [unproductive employee] Bob with enough stuff to lead a good life, that all of us, together share this burdensome duty, rather than just Bob’s employer?”

    Usually I receive a “that’s just the way it is response”. But then I wonder: what would that look like? Minwage supporters are usually willing to pay higher prices if it means higher wages. Have had trouble thinking about how that would play out, esp for low income earners. Also is there evidence that the INCIDENCE of the minwage is on the employer, or do they already shift costs to consumers?

    • wintercow20 says:

      Real quick, as I am on the way to class. On the labor demand literature, what you see is that almost all of the costs thrown on employers are not borne by them – disability costs, health care costs, payroll taxes, etc. That leaves the workers themselves or the customers. It would definitely depend on what market we are talking about – I’ve seen research on both sides. A really cool paper (maybe Macurdy did one on this too?) would be to see what the incidence of purchasing from minwage workers is. I know the caricature is Walmart – but Walmart does not employ many minimum wage workers either. So I’d love to see a study of where the minwage workers actually are, and who their customers are.

      Good questions.

  2. Trapper_John says:

    Alex–it’s an interesting discussion that so many miss. Walmart is the classic case where people believe the “employer should bear the burdens of living wage”, and yet their proposed solution does anything but that. If Walmart raises prices across the board to pay for increased labor expense, this is borne by their customers, who are largely poor people. If the government provides food stamps to Walmart employees to supplement their wages, that is borne by taxpayers, who are largely rich (the top 50% of earners in the US pay ~95% of the taxes, or some such).

    I imagine this case holds for many businesses who employ low-skilled labor (fast food, big retail stores). Their customers are the people who can least afford the added tax on their purchases (and to pay for fellow laborers–solidarity, my ass). Robbing low-income Peter to pay low-income Paul. But, amazingly, minwage supporters miss this. I guess an argument can be made for enhanced convenience/dignity of a) not having to deal with government agencies and b) only seeing the paycheck which is “earned” money, coming from the evil employer who has been defeated in the Fight for Fifteen. What I really hate is that the progressive left now has me arguing in favor of government programs. Are their policies intentionally so bad that the governmental alternative is better? If so, well played. Ugh. I need a drink.

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