The Minimum Wage and the Three Axes

Bryan Caplan writes,

Please don’t give me any “hard heads, soft hearts” answers. Give me “soft heads, soft hearts” answers. You’re trying to persuade Oprah Winfrey

The idea is to argue against the minimum wage. In my terms, Caplan’s challenge is to make this argument to someone who views political economy along the oppressor-oppressed axis. Low-wage workers are typically seen as oppressed, their employers are seen as oppressors, and the minimum wage looks like a tool to reduce oppression.

You can say, “The low-skilled workers who are priced out of the labor market by a minimum wage are even more oppressed,” but that does not get you far. Even though eliminating the minimum wage will make some low-skilled workers better off, it seems as though you are strengthening the oppressors’ bargaining position vis-a-vis the low-skilled workers who deserve more than the minimum wage.

The libertarian’s freedom-coercion heuristic says that working at a sub-minimum wage cannot possibly be a bad thing if someone agrees to do so. For progressives, aside from the fact that this is not their preferred heuristic, the problem is that working at a sub-minimum wage is not, in Michael Munger’s terms, euvoluntary. That is, it is only voluntary because your best alternative (not working at all) is so bad.

The Greg Mankiw approach would be to argue that a minimum wage acts like a wage subsidy to low-skilled workers combined with a tax on hiring low-skilled workers. So, if you really want to help the oppressed, you should have the government give a subsidy to low-wage workers, period, with no minimum wage. The subsidy will raise wages and increase employment rather than lowering employment.

I think that even the Mankiw approach will fail among those who see corporations and business owners as the oppressors. The subsidy fails to make the statement that low wages are an act of oppression. A minimum wage law does make such a statement.

9 thoughts on “The Minimum Wage and the Three Axes

  1. Whatever hermeneutic axis you lay over it, and while I concede that the analysis of axes is instructive, the fundamental problem consists in the ineradicable fact that the majority of people are locked into anthropomorphic concepts of the environment that surrounds them, which is also why an understanding of ecological matters is rarely found in people, rhetoric notwithstanding.

    Where order exists or is supposed to be provided, it must be created by human minds/actors – this is ‘the model of the tidy desk’ that comes about only by human order-creating intervention.

    This perceptional bias is exceedingly strong and ardently adhered to because in everyday life what we typically and often very impressively experience is human created order, not order that creates itself (like the human body, the brain, the climate, the evolution of (our) species, culture, history, nature, the universe).

    Then there are people and institutions that thrive on this very bias as well as their ability and willingness to pander to the anthropomorphic preconception so popular with us: political entrepreneurs (politicians, state agents etc.). “Give us power, give us money, and we will create order for you.” People like the offer, they are epistemically doomed to liking it.

    The inability “to think beyond step one” (Sowell) and recognise the cybernetic nature of certain types of order vital to human welfare and survival can only be overcome when human beings learn to think ecologically, i.e. in term of spontaneous orders (when it is appropriate – of course, there is a role for human-created order).

    Ironically, this ability is almost entirely absent in our present age, even though people pride themselves of their appreciation of ecological matters – in Germany environmentalism is a religion as strong as traditional religion use to be, say in the 1950s.

    Whether ‘progressive’ or ‘conservative’, people today are adamant about their thoroughly unecological views of the world.

    Hence, not only do they have unecological ideas about matters subsumed under the traditional, narrow category of ecology that refers exclusively to extra-human nature (monocausal religion of satanic CO2), they don’t begin to understand that human society is part of nature, and as such part of a complex ecological order. Incidentally, many libertarians do not seem to understand this either, especially the hyper-rationalist, aprioristic schools in the Misesian and Rothbardian tradition.

    Many themes of our political imagery, including the issue of minimum wage, are constructs forced into existence by this epistemic contortion, which aligns, I would think, many otherwise competing political groups, including the progressives and the conservatives of your country, and explains why, in my view, the US is – by popular consent – no less a social democratic society than my own Germany.

    (The roots of American social democracy are deep – see “The Governmental Habit” by Jonathan R.T. Hughes, a book that, by the way, has had a profound impact on the late J.M. Buchanan.)

  2. We should eliminate all anti-poverty programs and give every adult citizen an annual subsidy–an allowance if you will–instead (about $7000) and let the marketplace determine the rest of one’s income.

  3. Arnold wrote, “In my terms, Caplan’s challenge is to make this argument to someone who views political economy along the oppressor-oppressed axis.”

    Actually, Caplan’s challenge was to make a case against the minimum wage that would appeal to a “Feeling” type person, as understood by the Myers-Briggs personality type system.

    Do you see some connection between the Feeling type and the disposition to view things in terms of oppressor vs. oppressed?

    • There is a correlation. However, I do not want to reduce someone’s political views to their personality type. I want to take their views at face value.

      • Along the lines of this, I’ve had a nagging problem with one facet of the Three Axes paradigm, which I otherwise find very good. Two of the Axes are positive-to-negative while one seems to be negative-to-negative–the progressive axis. Wouldn’t a more charitable construction be something like oppression-equality for the progressives?

    • Rereading my comment it seems incomeplete so:

      Many Democrats already believe that we are subsidizing Walmart through Food stamps Medicaid etc. so they are very likely to protest against Mankiw’s approach on the grounds that it is a subsidy to employers who pay low wages.