Economics, Social Justice

Boudreaux vs. Konczal on California’s $15 Minimum Wage

Earlier this year, Governor Jerry Brown signed into a law a bill that will raise California’s minimum wage to $15/hr by 2022. I wrote here at the time expressing my concerns about the effectiveness of the policy as a poverty-fighting measure. But despite the considerable skepticism of many economists, minimum wage laws are still seen by many as a powerful tool for achieving greater social justice.

To explore these issues further, my newly created center at the University of San Diego – the Center for Ethics, Economics, and Public Policy – hosted a debate on California’s minimum wage law earlier this month. The debaters were Don Boudreaux of George Mason University Economics (and Cafe Hayek!) and Mike Konczal, Fellow at the Roosevelt Institute. You can watch a video of the debate below.

 

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  • Loren

    What a fun debate. I thought Don’s opening statement was extremely clear and convincing and demonstrated thorough preparation. I especially appreciated that his primary concern was for the welfare of the low skilled workers which is a great BHLvalue and one the free marketers often miss. I struggled to make sense of Mike’s overall argument and his points felt disjointed, but I do scratch my head sometimes and wonder why the iron-clad law of supply and demand has such mixed results in this area of research. In the end though I just can’t get past the nagging worry that artificially raising minimum wage has a reasonable chance of harming those it’s intending to help, and with that being the case, it just seems foolish to do it. If the goal is to reduce poverty, lets implement policies that have stronger evidence in support of them.

  • King Goat

    I think the goal is often not so much reducing poverty generally as it is a sort of dignity protection measure. Remember Bill Clinton’s slogan in favor of it, ‘making work pay?’ Partly that was about making work more attractive than welfare by restoring the dignity of the worker (they could afford to pay their bills, if they couldn’t from working why bother?, but it was also so they wouldn’t be looked down on as still poor even after putting in 40 hours of work a week, which made work more attractive culturally).

  • Stefan Sciaraffa

    See about 45:20 where Boudreaux states that the minimum wage is an immoral policy. That bit of the discussion is puzzling. What exactly on his view makes the minimum wage an immoral policy?

    One possibility is that he judges it to be immoral based on his take on the empirical questions about disemployment effects and counterbalancing benefits. But that would be tendentious, for both Konczal and he were defending different takes on that set of empirical issues.

    A second possibility is a bit more, well, deontological. See 45:35. “If you cannot produce for your employer value at least equal to the minimum wage, you are prohibited by law from working. That makes jobs insecure. That makes workers insecure. I think its just an immoral policy.”

    The high moral dudgeon at that point seems out of place, and the bit about “being prohibited by law” to sell one’s labor seems irrelevant to the question that I thought was at issue–whether the minimum wage can be beneficial overall in some circumstances. Unless, of course, you think that being prohibited by law to sell your labor at a certain price is itself immoral. But then I think these issues should be clearly recognized as distinct. It should be clearly recognized that the empirical/utilitarian calculus might not line up neatly with the deontological case for/against the minimum wage–the restraint on economic freedom.

    • Neil_S

      Not to put words in Prof. Boudreaux’s mouth, but I believe his view on the immorality of the minimum wage is that it directly harms the most vulnerable members of the potential work force, those whose skills, experience, etc… do not leave them able to contribute value at a wage of $15/hour.
      That these individuals are overwhelmingly young, black men who are denied the opportunity to develop their skills and prepare themselves for better opportunities is a tragic waste of human capital, a strong contributor to the disruption of the social fabric, and, I believe, deeply immoral.

  • Mark Rothschild

    The left’s motive for minimum wage laws is to school the working class and the barely working voting class to view the state as the source of their wellbeing. So, viewing it as such these laws are very efficacious.

    Now, while it is true that minimum wage laws make the very least skilled, least valuable employees essentially unemployable, this is not a bug, rather it is a feature of the minimum wage since it augments the dependent unemployable voting class who view the state as their only source of substance (other than crime).