Fantastic Words

I've been posting in a conversation about the minimum wage over at Real Clear Politics. Check out this gem from a fellow posting under the title "Actual Moderate Conservative."

Minimum wage laws address imbalances in bargaining power due to an oversupply of labour at lower level positions. While capitalism is by far the superior economic system, that imbalance is a natural outcome of capitalism, like it or not. Many things are a natural outcome of capitalism, and yet reasonable people (excluding hard libertarians, of course) will agree that our social compact dictates that we maintain laws to prevent some of them - monopolies, child labour, unsafe work conditions, etc. It is for this reason that America, and every other western nation, has always had a mixed economy of mostly capitalism, with some limitations (such as those above) mixed in to facilitate capitalism. 

Most even-handed people that i know fully acknowledge that minimum wage laws are necessary as part of that package of laws that establish limits on the natural outcomes of capitalism and maintain social order. If that is the case, then it is not a matter of having a minimum wage or not. It is, rather, what that level should be. To do that, one must establish what one is trying to accomplish with it - in other words, go back to first principles. 

Most of the posts here are simply arguing about issues like the impact of minimum wages as if there was no data on the subject. There is plenty, and there are plenty of real-world examples in the US AND (I cannot emphasize this enough) around the world. While the data is mixed, it seems clear from the evidence that minimum wage increases - at least at the levels that have actually been done, rather than silly $1,000/hour thought experiments - are washed out in the economy, as there are too many moving parts in any modern economy. 

So you have something that has virtually no macro impact but affects the real lives of hundreds of thousands of people. My suggestion is that people should be talking not about what the impact is, so much as they should be thinking about what the purpose of minimum wage laws are, and whether the current levels are accomplishing that goal.

I wish there were more conservatives out there like this person!