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.