It seems to me that America has travelled the libertarian/unfettered market/positivist/laissez-faire/... route before, and the results necessitated the Populist and Progressivist movements.

"The minimum wage should be the same everywhere."

This might actually make some sense, but it shouldn't to Will -- unless his support for the principle of federalism operates only when convenient.

The goal of the economic conservative movement is to eliminate the dollar wage, and replace it with scrip, that we can use to rent certain types of housing and buy things in certain stores, and collect no interest or possibility for advancement at all.

Eliminating the minimum wage would result in the return of slavery. Sure, it wouldn't have the force of law, and you could leave it at any time, but you wouldn't have any resources to fall back on.

And more thing. This stuff makes me really damn angry, and makes me want to start a movement to remove all legal protections for these people, so they can operate in a real "free market". If a band of homeless people decide to take over Mr. Will's mansion and live there, throwing him out on the street, it's obvious that's what the "free market" has decided. He should have spent more on home security.

His mistake, his loss.

It's funny how most conservatives who are in favor of abolishing the minimum wage don't get as outraged over say the Fed setting interest rates. (I wonder how many articles Will has written advocating abolishing the Federal Reserve Board?) I mean, why is capital any different of a commodity than wages are?

One reason why we need a minimum wage is because wages are artificially constrained by the Fed. Every time it seems like working people start making more money, the Fed steps in to raise interest rates and cut those wages.

Third, why should the minimum wage be $0? I'm not sure why Will thinks it should be a non-negative pecuniary number.

Under strict market conditions, workers can be employed partly in exchange for housing and security guarantees. Or their work would only partly offset the value of the housing and security guarantees that they were granted by their employer.

It's slavery, to be sure, but it's a perfectly 'legitimate' market outcome.

In the immortal words of Johnnie Rico, "Men are not potatoes!"

This, in a nutshell, is the core problem with conservative economics: it views workers as commodities.

This is why don't have personnel departments anymore -- and why they have been replaced by Human Resources.

If you treat workers as people, the CEO gets paid less. We can't have that.

Ok so let me get this straight: My labor, which I sell as a consultant, is a commodity. I sell it for what the market can bear (which in todays RE management market aint much). Just like the buying and selling of other commodities, like gold, sugar, stocks, frozen OJ, or real estate.

So why is it that my one singular commodity, the same single commodity available for sale by most Americans, is taxed at a far higher rate than any other sold commodity? Just because we call it wages and not capitol gains? Or because it is in the best interests of the folks who can afford the commodity sold by K-Street, access and influence?

Remind me not to go to work for Mr. Will.
And to help him enjoy his free-market dreams, may his plumbing back up on holidays...

George Will is right. Slavery made this nation great.

Well, sure white conservatives that love Jesus and Blastocysts are human beings, but you loathsome baby-killing grave robbers are worse than pig iron!

One takeaway from the American experience with slavery is that in 1865, productivity levels in the American South were roughly the same as those of Guatemala. The cheaper the labor, the lower the incentive for employers to adopt efficiency enhancing technologies or processes.

In other words, notwithstanding the moral implications, poorly compensated labor incentivizes an uncompetitive economy.

George Will has been a commodity all of his working life.

He makes his living as a commodity getting paid for his opinions and has done well for himself personally if not for the nation.

Like Senator McCain, Will is a tired old man with tired old ideas. Like McCain, his time has come and gone. And, like McCain and many old men, as he ages he gets curiouser and curiouser.

Thanks Scott for making the first comment on this thread. The reality is that we had Laissez Faire at one point in this country and it led to The Jungle. The real economic expansion that lifted all boats in this country came in the heavily regulated, government supported, unionized era following World War II and the New Deal.

Yes, he slipped up, but it is sad that he feels he can do so boldly, without any compassion. I keep telling you they would love it if we all worked for Wal-Mart wages, and here he admits it.

CJColucci: "The minimum wage should be the same everywhere." This might actually make some sense, but it shouldn't to Will -- unless his support for the principle of federalism operates only when convenient.

Quod erat demonstratum.

Maybe it sounds noble to say workers aren't commodities, but it's still a fact that a "living wage" in California is one hell of a lot higher than a "living wage" in most of the rest of the world. Or in much of the rest of the U.S. for that matter. Industry will flow to the lowest labor costs.

Incidentally, less than 3 percent of U.S. hourly workers work for the Federal minimum wage or less, and most of them aren't supporting families. Minimum wage is a cheap way to buy votes from the economically ignorant.

Thanks, Kevin. Now why don't you take on today's David Brooks's mean spirited, assinine, completely inappropriate, poorly wrtten, smug screed on Nancy Pelosi?

Making American workers more financially insecure is a key goal of Republicans. You can see it in their efforts to end Social Security, to break unions, to undermine pension plans, to burden that federal government with debt so that funding for various programs assisting the middle class and workers is jeopardized, and to speed the emigration of jobs overseas. The more insecure workers are, the less they have to be provided in return for their labor and talents, and the more that can be retained for executive perks and pay.

You also see the war on workers at the cultural level, with numerous reality shows pitting various contestants (workers) against each other against an all-powerful, abitrary boss (employer) who sets them to humiliating and dangerous tasks.

These shows are a clear indication of the triumph of the values of the Republican baby-boomers/Southerners over the mainstream values of WWII-generation Americans. The WWII generation was about a decent society where workers were valued and could work together to get a fair deal out of their employers. Now the cultural and political model is workers kneecapping each other to satisfy their rich and capricious employers. The cultural model has reversed in the last generation, and is much closer to George Will's beloved "America circa 1900" model.

people are not fungible goods.

societies that treat people like fungible goods end up with the grandchildren of the disgustingly wealthy hanging from lampposts.

Coming to a neighborhood near you

Give George Will credit. He is saying something that most Republicans sort of claim they believe.

I think the Democrats should do what Will suggests. Call a vote on abolishing the minimum wage and watch it lose 400-15. Then raise the minimum wage with overwhelming support.

George Will has been a commodity all of his working life.

Especially if by "commodity" you mean "tool".

cant have a global economy without a global minumum wage. PERIOD.

Corporations and banks have used the global economy to impoverish 70% of the human population.

WHEN ARE PEOPLE GOING TO PUT A STOP TO THIS?

the entire banking system must go complete with a prohibition on interest on moneylending, just like it says in the fucking Bible these assholes pound so much.

Read the book of Acts for Go's perspective on how the human economy should be run.

Slavery made this nation great.

That is an interesting statement, and I think true. The wealth the slaves generated prior to 1776 allowed their owners to rebel against England and achieve independence. Without the value added by slave labor, the wealthiest part of our nascent nation would never have existed. I think we truly owe our independence to the wealth produced by the slaves, which is why I think we need to pay reparations to their descendants.

Minium wages transfer a tiny bit of wealth from the rich to the poor, making us all richer with greater economic activity. That is why Mr. Will and those like him are against it. They like having people in thrall, not in prosperity.

Making American workers more financially insecure is a key goal of Republicans.

I call it the New Provincialism. Everyone will have a Gaulider they call Potter in the new world the Republicans want to build.

I like the new conservative openness about what they really believe. Keep this up and we'll get Democratic in power for the next generation.

Great post, Kevin. Well said.

I was about to question some of the numbers in Will's article, but it appears that echidne already has done it.

http://atrios.blogspot.com/2006_12_31_atrios_archive.html#116793453699997761

At long last Schaife can give their trools a raise - But, will they really be worth it?

Republicans and libertarians fuel the immigration problem they decry so loudly by paying foreign and undocumented workers significantly less than wages Americans know they need to get by in our higher-cost economy.

GOP business owners lure the illegals to the US with relatively lower wages (but no benefits) that they know the illegals desperately need and then complain about the minimum wage and the laziness of American workers.

Utter hypocrites.

ESaund,
He doesn't need to, you have just covered it quite eloquently.
I am not even reading the news today, I want to keep my lunch down. Congress has become a kindergarten playground and the once proud Grand Old Party now a wizened self-serving bunch of power-junkies. Boot the old coots and see what a younger set of Republicans can bring to WA besides double standards and bush bootlicking.

A rabid dog with a pedigree is just a rabid dog.

Hey don't blame old age for Will's idiocy.

Conservatives are born assholes. He has been once since he was conceived.

The minimum wage has nothing to do with "bare minimum levels of decency" and everything to do with maintaining a health, capitalist economy.

As Henry Ford proved 100 years ago, you can't sell something if people can't afford it. By paying his workers the then princely sum of $5 per day, he ensured that he would always have a market for his cars, because the very workers who made them earned enough money to afford to buy them.

UAW leader Samuel Gompers made the same point from the opposite perspective more than 50 years later, when shown a car-building robot. The General Motors exec goaded Gompers with "Let's see you make that join a union!"

Gompers shot back: "Let's see you sell it a car."

Starve your workers and you destroy your own company. Abandon the minimum wage and watch the economy drop to third-world levels long before $200/barrel oil does it.

Every jurisdiction that has established a minimum wage above the federal minimum has seen an IMPROVED economy - higher pay leading to greater spending leading to MORE jobs, not fewer.

As Jim Hightower never tires of repeating:

Everybody does better when everybody does better.

Having read the column I am now convinced that Will is correct. I am more than willing to replace him at the Post or for that matter on ABC. I will do the job for $1 a year. Please have George tell me when I start. Call me on my cell because I am going out to buy some bow ties!

Kevin, you do know that 60% of minimum-wage earners belong to families whose income is double the poverty line and that 40% of them are in families which earn triple the poverty rate, don't you? That only 15% of them are "poor"?

That you're effectively proposing a transfer of wealth from largely poor services consumers to largely middle-class teenagers and second-income earners?

Does any of that actually matter? Or is your motivation mainly to feel good about yourself, regardless of the actual effects of what you propose?

I will take you bozos seriously once you start advocacy for a truly helpful minimum. The minimum should be set to no less than $50/hour so that we can all enjoy our fair share of the upper middle class American lifestyle.

There day is comming,I read the other day lawers are being outsourced from India they work for around 30 dollars an hour compared to 150 dollars an hour plus expenses. What could be next, CEO's and soon after we will be a third world nation. Suck on that Mr.Will.

Making American workers more financially insecure is a key goal of Republicans.

And replacing hard work with helpless dependence upon the government is the goal of the Democrats. What's that? You take offense at that overly smug characterization?

The responsible debate over the minimum wage boils down to this issue: is there a monopsony/oligopsony in the market for labor, and if so, are employers using their superior market power to bargain down the wage for unskilled labor?

I would submit that you can be an informed person of goodwill and answer that question either way.

This stuff makes me really damn angry, and makes me want to start a movement to remove all legal protections for these people, so they can operate in a real "free market". If a band of homeless people decide to take over Mr. Will's mansion and live there, throwing him out on the street, it's obvious that's what the "free market" has decided. He should have spent more on home security.

His mistake, his loss.
Posted by: Karmakin

So, if Mr. Will did spend more on security and hired some armed guards who shot the homeless gang to death that would be okay, too, right? Free market at work and all.

"a' cough up support and authority for your ridiculous claims or STFU

I will take you bozos seriously once you start advocacy for a truly helpful minimum. The minimum should be set to no less than $50/hour so that we can all enjoy our fair share of the upper middle class American lifestyle.

And here is where I jump in on the liberal side. The naive argument for raising the minimum wage is that workers deserve to be paid more than the market rate. That is clearly wrong on positive grounds. But the sophisticated argument is that the market for unskilled labor deviates significantly from the model under perfect competition. Employers have a monopsony/oligopsony and use their superior market power to bid down the cost of unskilled labor.

These folks are trying to set the stage for New Deal II, FDR's Revenge.

I skipped over the Will $0 minwage link. Thanks for going there, so we don't have to.

Karmakin FTW!!!

I've often thought the most vocal free market advocates are usually precisely the guys who would get trampled if we ditched the social contract and the market were truly free.

Whatever Will gets paid for his drivel, it is too much.

Justin that is a pretty big strawman you just knocked over.If only you had realized that corprate wefare dwarfs all other forms of welfare.Also no dems have said anything about living off the gov. Just a fair livlng wage.Don't you want to get paid fair money for what you do ?

Justin,

You and others can take your sophisticated arguments and burn them for heat. If we really care to raise people out of poverty and have a just society, then the minimum should be set to guarantee the lifestyle to all that is now enjoyed by the upper 30% of the population. Advocating raising the minimum by some amount that affects less than 5% of the working population is just moral masturbation, and a big FU to those of us who make more than $8/hr, but less than $50/hr.

Most of the adults writing here probably make more than $25/hr but stop well short of advocating a minimum wage anywhere close to what they themselves receive. I smell insincerity.

Thomas, the point of my comment is to show that both characterizations (Republicans are trying to increase insecurity, Democrats are trying to make people dependent upon the government) are overly smug and disrepectful.

It was not a strawman because as I made clear in my comment the debate over the minimum wage is over whether or not there is a monopsony.

When is America going to wake up and recognize that every time we allow an employer to pay below minimum wage, we are in effect subsidizing them since we wind up paying the added costs of supporting those workers through higher health costs (they have no insurance so use emergency rooms and those costs are passed on to all of us in the form of higher insurance premiums), poor housing, poor education, food stamps and on and on.

When is America going to wake up and recognize that if EVERY worker is guaranteed a minimum wage which at least covers the basic costs of living...housing, health care, food, etc. -- we create a far more efficient distribution system.

The alternative is inefficient programs of welfare, housing subsidies, food stamps, etc., administered by bureacracies which add to the cost of the subsidy we now provide.

Giving the funds to workers as a fair minimum wage lets THEM make the economic decisions and eliminates the inefficient government middleman.

I'll shy away from showing Will the examples of how higher minimum wages have helped local economies.

Will is just like the Climate change denialists like George Taylor. They cherry-pick data that fits their pre-concieved notions. It is too painfully easy to debunk their crap.

Brian - ...So, if Mr. Will did spend more on security and hired some armed guards who shot the homeless gang to death that would be okay...

So long as he paid them a living wage.

George Will treated his retarded son as a commodity when he dumped his first wife and left the son with her, so he could hook up with a trophy wife 20 years younger than him. But I'm sure he will tell you about his good "family values".

By saying the minimum wage should be $0, Will is implying slavery is acceptable, but isn't that what Wal-Mart relies on to produce those good that are made in China by prison labor, only to be marketed as "Made in the USA"? Conservatives are friggin' shameless...

I for one welcome our new Democrat Overlords.

What Will and his ilk really want is a nation wide company town with the uberrich behind their gated walls and the vast working class begging for bones and work outside. So it will be McMansions and Labor Ready. Weak, sick, disabled, elderly (living outside the walls) need not apply - Sounds like Roma of old. Generals, not advocating withdrawal, will be provided with estates upon retirement.

Republicans are trying to increase insecurity, Democrats are trying to make people dependent upon the government.

This is utterly confused thinking, the kind of pox on both houses thinking that gave us eight years of misrule by corrupt, incompetent, and immoral morons.

Republicans' explicit goal is to transfer the risk of business and corporate interests to the masses. Thus their immediate goal is to make the Americans more insecure, so that those whose interests they serve are better off.

Even if the effect of Democratic policies is to make some people dependent on the government, this effect is very indirect.

Hi Kevin,

I think your post confuses *labor* with *laborers*. The market (or moral) value of labor is different from the value of a person, and if the price of labor is low it isn't a moral reflection on people who want to sell their labor.

You might still say that a minimum wage would be net beneficial for society, but it's incorrect and somewhat inflammatory to say that a minimum wage of $0 means that "workers are commodities... rather than human beings."

In the new libertarian dystopia, labor is nothing more than a cost on the balance sheet. Where once some attention was paid to making workers at least feel like partial beneficiaries of captitalism, now workers are no more than a necessary evil, parasites who feed on profits that belong to shareholders, or more realistically, to those in the executive suite. Quaint ideas like loyalty, responsibility, or even patriotism must bow to the bottom line, outsourcing to China, and a mailing address in the Caymans. It's the Wall Street sharks who are viewed as the "productive" members of the society, not those who toil for them. Hell, even using the word worker now in almost any context beyond the cost of labor smacks of communism.

When the CEO of Home Depot is lavished with a half-billion dollars for a few years of showing up, that money has to come from somewhere, and shareholders and workers get squeezed. (Shareholders have a little power and that's why Home Depot has a new CEO now, but not enough to prevent the board from laying an extra $20 million on him as a goodbye kiss just for walking out the door that was not even a part of his $200 million employment contract—I love these numbers, $20 million almost sounds measly compared to the total he got, but it's the equivalent of 3 or 4 avg. lifetime incomes for a surgeon, or winning 20 Lottos for the proles).

Next up. George Will calls for the repeal of child labor laws. Let the market set the price for labor of any age—there are mansions to be re-modeled!

Kevin says that Will's column is" mostly just a data dump of half facts and cherry picked numbers"

From Will's column:

"Most of the working poor earn more than the minimum wage, and most of the 0.6 percent (479,000 in 2005) of America's wage workers earning the minimum wage are not poor. Only one in five workers earning the federal minimum lives in families with earnings below the poverty line. Sixty percent work part time, and their average household income is well over $40,000. (The average and median household incomes are $63,344 and $46,326, respectively.)"

Are these number accurate? Only .6% of the working population is getting the minimum wage? So the Democrats first big policy initiative is directed at helping one half of one percent of the working population of the country? Talk about micro-policy making. I guess Clinton was right when he said the era of big government is over. lol

Of course, the real reason why the Dems want to raise the federal minimum wage is because all sorts of union contracts in both the public and private sectors use the minimum wage as a baseline for setting wages for their members. So if an union contract says that the lowest wage a member can get is twice or three times the minimum wage, then a $2 or 3-dollar increase in that wage translates into $4 or 6-dollar increase for the union member. This, in turn, will result in an increase in collectable dues for the union and their PACs, which in turn, will result in increased campaign contributions to the Dems.

And there you have it, the Democratic Circle of Life.

The naive argument for raising the minimum wage is that workers deserve to be paid more than the market rate.

The difference between what workers earn and the value of their labor is a surplus that our political economy has always acknowledged belongs to the employer. That is why employers are able to accumulate so much wealth. Market rates for anything, including labor, are not natural, nor perfectly ideal, and are subject to manipulation by those with accumulated weatlh or special knowledge unavailable to everyone.

Political economies are whatever we want to make them. Unfortunately, political economies are usually made to benefit those who have already accumulated weatlh, which is why the propaganda themes about free markets and earned wealth are so pervasive. The wealthy usually add no value to the products and services sold for revenue, yet they keep most of the surplus value added by labor. Transferring just a tiny bit of the rich's wealth to the poor helps to counter the gamed markets so many think are ideal.

Al wrote: Slavery made this nation great.

Don't forget genocide.

I suggest that the minimum wage be set at one percent of the maximum wage.

Are these number accurate?

As was pointed out here, the stats came from the BLS. Will, being the sleazeball propagandist that he is omits a key sentence (a mendacious habit viz. his description of the Bush/Webb encounter).

Of those paid by the hour, 479,000 were reported as earning exactly $5.15, the prevailing Federal minimum wage. Another 1.4 million were reported as earning wages below the minimum.

"is there a monopsony/oligopsony in the market for labor, and if so, are employers using their superior market power to bargain down the wage for unskilled labor?"

Yes. But there isn't any bargaining involved. Since they have monopsony power, they are using their political influence to have the wages of Americans driven down as much as possible, so that more money can flow into the bottom lines, and therefore into their own pockets (since they are in a position ot dictate their own compensation).

We've been in this position before, in 1929. That's why the New Deal was struck, and it resulted in the most prosperity American has ever known. Why are we trying to pretend none of that history ever occurred? Why are we trying to pretend 1900 was paradise for America? Maybe it was for the richest few, but for most Americans it wasn't.

And if the country doesn't work for most Americans, it doesn't work, period. Ford know that, which is why he raised the wage for his workers in 1914. He know that by doing so, he created his own consumers. We seem to have forgotten that. If we destroy the purchasing power of the American consumer, we destroy a large part of the world economy. Driving wages down to poverty levels is the fastest way to accomplish this. Doing things to raise the purchasing power of the American consumer, by increasing his compensation, is the best way to avoid the problems history has shown us will be coming if we remain on our present path. Republicans seem able to forget this history, or, at worst, to concoct badly skewed economic justifications for draining the national wealth into the pockets of the few, as Milton Friedman was so famous for doing.

Most of those at the top, whom Republicans worship as wealth creators, are in fact only wealth inheritors. They have created nothing. True, there are a few who have made their own fortunes, as Sam Walton did. But most simply inherited the fortune someone else earned, as Sam's kids did.

The minimum wage is a price control placed on a strapped labor market! It MUST go!

Kevin Drum stated:

First, as a matter of empirical economics, workers aren't commodities. Unlike pig iron ingots, they respond to incentives, they can be trained to operate more efficiently, they put their paychecks back into circulation, etc. As Will is undoubtedly aware, there's an entire branch of economics dedicated to exactly these issues, and it reaches conclusions considerably more complicated than those in the Micro 101 class he took half a century ago.

The liberal thinking is that people are people and all that peace and love and human rights crap. Well, the fact of the matter is, SKILLED labor is not really a commodity but UNSKILLED labor is definitely a commodity, especially in the hog rendering and chicken processing world. One does not measure the number of employees; one measures the number of chickens or hogs rendered and calculates the minimum number of persons needed to accomplish that goal.

SKILLED labor is tougher to measure, but UNSKILLED labor is something you can measure with basic metrics. Therefore, Mr. Drum is wrong.

Second, he's mistaken in a moral sense. A rich society really has no excuse for not setting bare minimum levels of decency for all human interactions, including those between employer and employee. Virtually everyone in America accepts this today, which is why increasing the minimum wage garners support of 70-80% in most polls. But apparently it's still a controversial concept in some quarters.

Bare minimum settings? Oh, so the market be damned and we'll all sing Kumbayah and let all boats rise with the flood?

What INCENTIVE does anyone have to work hard, play by the rules, and inherit their money?

The only controversy is how badly liberals want to hand Joe Six Pack fifty grand so he can blow it on a Dodge Durango and drive drunk all over the place.

Did it occur to any of you liberals that, by raising the minimum wage, Joe Six Pack will get a taste of the good life and stop working? Whenever his boss starts giving him grief about a hair net or an open sore, Joe Six Pack just shrugs and walks out the back door and gets another high paying job, courtesy of the Democrat Party and their $17 dollar and hour "minimum" wage.

How long before the Democrat Party sets a "MAXIMUM" wage that stops talented Americans from going any further? What do you liberals have against excellence, anyway?

When minimum wage was 25 cents, a burger and a beer cost 25 cents.

Now that minimum wage is up over $6, a burger and a beer cost over $6.

If we raise minimum wage to $50, a burger and a beer will cost $50.

There are other ways to mandate fair treatment of workers, but a minimum wage is useless.

Read the book Animal Farm and you will see where we are heading.

When minimum wage was 25 cents, a burger and a beer cost 25 cents.

Now that minimum wage is up over $6, a burger and a beer cost over $6.

If we raise minimum wage to $50, a burger and a beer will cost $50.

There are other ways to mandate fair treatment of workers, but a minimum wage is useless.

Read the book Animal Farm and you will see where we are heading.

Now that minimum wage is up over $6, a burger and a beer cost over $6.

No, I believe it's only $5.15 and Nancy Pelosi wants to make it $17 per hour.

Can't any of you get anything right? Do I have to do everything around here?

Will has been the beneficiary of a very un-free market in punditry. It's not like there's a continuous competition for the slots on the WaPo and NY Times op-ed pages; once you're there, it's nearly impossible to fall off. (What other excuse is there for Robert J. Samuelson's byline to still exist?)

In this wonderful Internet world, the online op-ed pages of the great papers could easily host fifty or a hundred op-ed columnists, most of whom would be paid very little, but the papers could see who was really popular and who wasn't, and adjust their dead-trees op-ed sections accordingly.

This fellow "Greg" or "GMAN" is obviously just another Joe Six Pack, sloughing off from work, drunk and poor, trying to make a point and can't figure out that the posts take a moment to appear when actually made.

Sir--crazy, drunk, and poor is no way to go through the day.

CN wrote: "We've been in this position before, in 1929. That's why the New Deal was struck, and it resulted in the most prosperity American has ever known. Why are we trying to pretend none of that history ever occurred? Why are we trying to pretend 1900 was paradise for America? Maybe it was for the richest few, but for most Americans it wasn't."

Why? For the obvious reason that we now have a government of, by and for "the richest few".

Hey Gman,

The minimum wage has been flat for the last ten years, but inflation has not. Could you work a little harder on your strawmen arguements?

I see Havlicek went down on Frazier, the other sock-puppet for Kenneth.

Accord this idiot loser all the consideration a sock-puppeting loser merits.

Only .6% of the working population is getting the minimum wage?

Perhaps. Lets just assume its accurate for the sake of argument.

So the Democrats first big policy initiative is directed at helping one half of one percent of the working population of the country?

Nope. Changes to the minimum wage do not effect only people making the minimum wage. For a number of reasons.

Most obviously, when the minimum wage is increased from $X to $X+A, everyone making less than $X+A and subject to the regulation benefits quite directly, not just those making $X.

Also, most places of employment maintain wage differentials based on experience and other factors. While people making greater than the new minimum wage get no mandatory benefit, very often they get some benefit (if not immediately, over time) as general wage scales above the minimum wage are pushed upward by the minimum wage increase.

For similar reasons, people employed in such a way as to not be directly subject to the minimum wage regulation also are often benefitted, as the minimum wage increases what they could earn in alternative employment, and places pressure on pay even where the minimum wage regulation does not apply.

Posted by: bobwire on January 4, 2007 at 1:24 PM

I think you are wrong. The minimum wage is a very important economic tool to be used by the government just like the Fed's ability to establish short term interest rates. Raising the minimum wage has a ripple effect throughout the economy. Over time it forces up wages all the way up the working class. Which forces money out of savings thereby increasing the amount of money flowing through the economy. To a point such stimulus is good for everybody. Of course, the trick is to make sure the increased wages aren't swamped by inflation.

Calling workers a commodity is the exact opposite of what a supposed uber-capitalist like George Will (per his corporate overlords) should be calling workers. Employees are perhaps the most differentiated of all factors. Usually right-wing talking points are against the commodity characterization since this would be a pro-union arguement. If workers were a commodity there of course would be no need to pay the recently departed CEO of Home Depot $450 million over 6 years.

Please George get your talking points straight.

Mark Twain: "Let you secret sympathies and your compassion be always with the underdog in the fight--this is magnanamous; but bet on the other one, this is business."
Sure enough, the Republican controlled congress failed to raise the federal mimimum wage since 1997, when it went from $4.75 to $5.15 an hour.
It was said this was the longest stretch without an increase since 1938. The minimum wage, of course, was introduced at 25 cents an hour by Franklin Delano Roosevelt.
Recall, in the third televised debate with Kerry, Bush quickly changed the subject of the minimum wage and jumped to talking about his every child left behind program as a jobs act.
It is only fair the wage be increased, and good for the dems to make it happen.
As Senator Kennedy said years ago, "the 2 most recent increases in the minimum wage did not cause the sky to fall."

It might be too late in the thread to matter, or the point might already be made, but Labor is a commodity, Workers are not. In other words labor does not equal worker. They’re linked because workers produce labor but they’re not equivalent. You can make policies that affect one but not the other. Minimum wage is intended to improve the life of a worker by putting a price floor on the commodity they produce. This may or may not help. It also may or may not increase social justice. I think the minimum wage hike will either be of little to no help.

An alternative, and I think better, proposal would be to increase the EITC.

So the Democrats first big policy initiative is directed at helping one half of one percent of the working population of the country?

As has been pointed out - Will's numbers are bogus. However, you had no problem when EVERY Republican policy initiative was directed at helping the top one-half of one percent in this country.

It's interesting how the "low-wage" conservatives trot out these tired pseudo arguments on a regular basis. They've been used for justifying everything from slavery to child labor to unequal pay for women, and the horrors that would be unleashed if status quo was changed.

Hasn't happened yet. Never will. It's a country of the people - not the corporations.

What "leftist" made these observations:

* Vanity drives the struggle for wealth. The rich want "to possess those decisive marks of opulence which nobody can possess but themselves."

* Market society is profoundly inegalitarian. "For one very rich man, there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many."

* There's nothing fair or evenhanded about the role of government in any of this. The government, "so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all."

Every single passage is from Adam Smith, "The Wealth of Nations". I wonder how many of those bloviating blow-hards and energetic young right-wing lobbyists sporting Adam Smith neckties know what he actually says .
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True, there are a few who have made their own fortunes, as Sam Walton did. But most simply inherited the fortune someone else earned, as Sam's kids did.

And as even the most ardent Walmart cheerleaders will admit in an unguarded moment, WallieWorld Corp has gone all downhill since Sam's death. Yet another reason for a strong estate tax.

Kevin: Great piece as usual. One quibble: The headline. "MINIMUM WAGE FOLLIES"? Why not "GEORGE WILL FOLLIES"? After all, almost all of George Will's columns are insincere, dishonest, or undisclosing of his relevant interests. Will is corrupt and rotten to the core, and no respectable newspaper should pay him or print his words.

Accord this idiot loser all the consideration a sock-puppeting loser merits.
Posted by: Global Citizen

So I estimate that value to be about equivalent to Mr. Will's proposed minimum wage.

:)

Raising minimum wages, in the long run, changes nothing for those earning it. Just mandating a higher minimum does not make the worker more valuable in relation to the other factors of production-and in the short-run, has the opposite effect. In time, the monetary values of all the other factors are adjusted to reflect the relative values that would have obtained in the absence of the price floor for one factor.

For example, one could try to raise the value of the minimum wage (and all other wages for that matter) by setting price ceilings, that are lower than the present prices, for the goods and services that the workers consume. How many of you would think that would work out well?

All angry comments aside, I've been following and thinking about these things for a while. The biggest argument against raising the minimum wage is one of inflation.

This is actually a valid argument...in a different reality. There is a certain point where if you increase the cost of labor, that it'll make it impossible for business to operate.

We are NOWHERE NEAR THAT POINT. It's in another galaxy. So the inflation doesn't come from that side. The other side, is that if people have more money, they'll be willing to spend more, driving up prices. This is another cannard. This aspect of inflation is a social issue, with a consumer mindset where for one reason or another they'll refuse the best deal. I've actually seen this before, and it's a real concern. But I think after the rough time of the last few years, I think this will be much less apparent in the future.

So what will people do with that money? In the short term, pay more bills and stop falling behind. That's good enough for now. As those bills start getting paid off, instead of cutting their own hair, they might go to a hair stylist, something like that, actually increasing the amount of labor that needs to be done in our society, making more jobs and a more vibrant economy.

All this is a good thing.

If Greenspan decided to not fight inflation on the backs of those at the bottom of our society, and let the 90's boom, where money actually was leaving the investment markets and doing what investment is SUPPOSED To do, namely hire people, go towards improving fixtures and infrastructure, etc. continue, and we got close to a competitive market FOR labor, we probably wouldn't be having this debate right now.

Let us assume that only a tiny minority of workers are affected by raising the minimum wage.

Then what possible reason is there to oppose raising the minimum wage? It will have a minimal effect, after all.

I don't understand how we can have 'Raising the minimum wage won't matter' and 'Raising the minimum wage is the devil' arguments in the same thread.

Read the book Animal Farm and you will see where we are heading.

At the end of Animal Farm, George Orwell makes it plain he thought capitalists and Stalinists were indistinguishable from each other and that he thought them both to be pigs.

Chicounsel,
Above, you carp on the Democrats for pushing legislation targeted at 0.6% of the working population, then you bitch about how all sorts of other people stand to see their wages increase with a minimum wage increase. That is hilarious.

So the beneficiaries are:
1) The 0.6% of people making exactly the minimum wage.
2) The about 2% of people making less than the minimum wage.
3) Anybody making a wage between the current minimum and the proposed level.
4) Anybody whose wage is dependent on the minimum wage by express contract.
5) Anybody whose wage is dependent on the minimum wage indirectly by market considerations.

The Democrats: helping their constituents! (The bastards!)

What INCENTIVE does anyone have to work hard, play by the rules, and inherit their money?
--Norman Rogers

So there's an incentive to have rich parents? I thought that was just part of winning the sperm lottery.
I'm hoping you're a paradoy, because no one could be that fucking stupid.

uman beings may not be commodities but their labor (Labor) certainly is. Besides such protestations against regaridng human beings in terms of commodities are kind of in vain when arguing for Government to subsequently puts a price on them.

If we are to revamp our economic system to instead focus on the value of labor's "humanity" rather than the value of labor's "labor", then I have a number of issues to bring to the table. For one, are human beings only worth 5.15 an hour? If we triple that, are human beings only worth 15 dollars an hour? And why should some like Moviestars, superstar athletes & CEOs earn millions by comparison. Is their humanity worth more than a janitors? I should think not.

Three comments on Will:

(1) Not a single one of his arguments applies against the alternative of raising the Earned Income Tax Credit -- indeed, this would avoid the problem he mentions of the fact that raising the minimum wage would include raising it for SOME people whose total families earn a lot more. (Unless, of course, you argue that the working poor ought not to receive any kind of economic assistance whatsoever because they're just "a commodity". It's unclear from his column whether Will goes that far into Scroogeland.)

(2) In his penultimate paragraph, he admits that there's an excellent chance that gradually raising the minimum wage will have a "negligible" effect in increasing unemployment.

(3) Brad DeLong and Daniel Gross had a field day with Will's not just wrong, but downright hilarious distortions of 1930s economic history in his first paragraph: http://delong.typepad.com/sdj/2007/01/daniel_gross_ha.html .

An argument has been made that in the long run raising the minimum wage doesn't really matter because the system will adjust and the effects of the minimum wage will be taken into account. In the long run we are all going to be dead so whatever we do doesn't really matter.

The fact is our economy operates in the here and now. The short term effect of increasing the minimum wage is to move money out of the savings of the wealthy and into the hands of the working class. Money in the hands of the working class has a multiplier effect. While the money pulled out of savings will ultimately end up back in savings, during its time floating around in the economy the money will have a real and positive impact. Raising income taxes on the rich has the same impact. The same can be said for lowering the capital gains rates which encourages rich people to move money from one asset to another. Again the key is not to kill the goose laying the golden eggs.

All of this requires thought deeper than can be expressed on a bumper sticker. The intent is not to engage in class warfare. It is instead intended to headoff the kind of class warfare mentioned above where the grandchildren of the very rich find themselve hanging from lampposts.

I'm hoping you're a paradoy, because no one could be that fucking stupid.

Duke graduates, to the last, are too dumb to get into Harvard or Yale, but are filled with a tad bit too much self-entitlement to actually work for a degree at a real school. So for $35k a year their parents buy them interaction with other below-average rich kids.

Norman's posts are obviously either a parody or written by a Duke graduate. Norman claims to be a Duke grad, and judging by all my prior interactions with the shiftless upper-class derivatives known as Duke graduates, I am inclined to take his comments at face value.

If, as I suggested above, the minimum wage were set by law at one percent of the maximum wage, then at the current minimum wage of $5.15 per hour, the maximum wage would be $515 per hour.

For a nominal 40-hour work week, for a nominal 52-week work year, the maximum wage would now be:

$515 x 40 x 52 = $1,071,200 per year

Over one million dollars per year.

Any income above that would be taxed at 100%. The proceeds could be used to fund universal single-payer nonprofit medical insurance, universal free public education including four years of college, and (as radical leftist Richard Nixon proposed) a universal, guaranteed minimum income equal to the minimum wage.

If the minimum wage were increased to $7.25 (as I believe the Democrats are proposing to do, in phases) then the annual maximum income would be correspondingly raised to $1,508,000 and the guaranteed minimum income would be $15,080.

I'll all for a min wage hike just cuz, who fucking cares. I'm against it in principle for two reasons, 1) [I'm not sure about this, it's just something I've heard) some union job base thier pay on the minimum wage and a hike will result an underserved raise for already overpaid workers. 2) Price controls create black markets.

I suspect the largest (though still small) effect of a min wage hike will be a slight shift toward the use of more illegal (generally migrant) workers. Also an increase (or, more likely, further delay in the long overdue decrease) in the price of CDs as teenagers will have more disposable income.

Back in college, both my Macro and Micro Econ Profs said labor was a commodity, and that fair market values were the basis of classical Keynesian economics.

I guess they didn't bother to consult any touchy-feely bleeding hearts while forming their course outline, or they would have censored it from the text books.

Let's all have id,s that state how much money we make.I buy a burger it will cost me 6 bucks.G Will would have to pay 38 bucks for his burger.Market just took care of wage indiffrence.Then you guys can have the minimum wage set to 1.00 dollar if you want.

SA, sorry in advance for the ad hominem, but you're a fucking idiot. Reallocating $s from rich to poor people will not make poor richer. The supply of good avaible remains the same, all that would happen is that there would be no way to determine who should get the higher-demand (re: pricier) goods, likely resulting in goods that are only available through networking (political connections) and the destruction of some high-end markets. Giving people more money will not increase the supply of mac and cheese.

I'm with Clyde. It really irks me that wages are taxed (twice!) at much higher rates that capital gains. With Congress now in the hands of the People's Party, maybe an early order of business should be to tie taxes on labor to taxes on capital. Since capital gains are the income of the rich, they should be taxed at the highest marginal rate for labor.

And capital gains should also carry tax for Medicare and Social Security.

Also, why is interest income taxed like wages and not like capital gains?

Destruction is an overstatement, Stunting would be more appropriate. It'll take longer for high end markets to develop. That means it will probably take longer for the better product to reach the average person.

Raising minimum wages, in the long run, changes nothing for those earning it.

That's true: in the long run, the mean experienced utility over all time for any individual person will be close enough to zero as to make no difference, since most of that time they'll spend dead.

However, in the shorter run, where it was designed to operate, minimum wage increases have important effects.

Just mandating a higher minimum does not make the worker more valuable in relation to the other factors of production-and in the short-run, has the opposite effect.

This is nonsensical. Certainly, it might be argued (though it is not clearly the case) that raising the minimum wage itself may not increase the value of labor in the shortest term (but see below for longer term considerations), but certainly there is no rational basis for arguing that it decreases it, even in the short term. At best, such an assertion needs at least some support in the form of either argument or evidence before being taken even remotely seriously.

The usual, and somewhat less insane, right-wing argument is that raising the minimum wage has no effect on the value of labor, but by increasing the price over the market value, encourages unemployment. The only problem is that, despite quite a history of minimum wage increases, there is no empirical evidence for this otherwise at least plausible effect.

In time, the monetary values of all the other factors are adjusted to reflect the relative values that would have obtained in the absence of the price floor for one factor.

Unlikely. Increasing the cost of labor increases the incentive to invest in capital, etc., which increases labor productivity, since it makes more labor-intensive methods of production less profitable. This increased incentive to invest in purchasing these types of capital, etc., likewise stimulates investments in improving and developing labor-magnifying capital products, drives technological development, and thereby increases labor productive and the value of labor.

For example, one could try to raise the value of the minimum wage (and all other wages for that matter) by setting price ceilings

One could, but the effect would be entirely different than applying a minimum wage, since price ceilings would affect all workers (and nonworkers) equally, whereas a minimum wage increase has a short-term effect most pronounced at the lowest end of the scale, and while it has side effects that tend to trickle up the scale, its effects fade over time, limiting the scope of its impact, as you yourself point to when you mention that over time, the price of other goods and services reacts to the change in the minimum cost of labor. Price controls are not, unlike minimum wage hikes, focussed on improving conditions at one point on the economic scale.

Which is why the effects sought by increases in minimum wages require the increases to be regular and repeated, not one time and then stopped.

So, aside from making a horrid, ill-conceived analogy, what is your point?

How about setting the minimum wage as a percent of the boss's income? (Not the bosses wage, but what the boss takes home in both wage, stock options, etc.) And if the boss gets a golden handshake, a percentage of that, too, has to go to each worker.

And this applies to workers in foreign countries, too.

SA, sorry in advance for the ad hominem, but you're a fucking idiot. Reallocating $s from rich to poor people will not make poor richer. The supply of good avaible remains the same, all that would happen is that there would be no way to determine who should get the higher-demand (re: pricier) goods, likely resulting in goods that are only available through networking (political connections) and the destruction of some high-end markets.

Er, no. You really shouldn't be calling anybody any kind of idiot.

Reallocating some money from the rich to the poor does, in fact, make the poor relatively richer. And presuming (as you do) constant availability of goods (itself unlikely, I would think, but that's another debate), it would also make them absolutely richer and the rich absolutely poorer.

Further, it would not make it any harder to figure out who gets high-demand goods: they would still be allocated on the basis of ability to pay, and relative access to wealth would still control who gets what. That the poor have more wealth and the rich less changes that not at all.

Further, many goods are available only through networking now (though the connections involved are only sometimes what is usually described as "political".)

Giving people more money will not increase the supply of mac and cheese.

Giving people who are likely to spend more of their available income on basic foodstuffs more money will, indeed, most likely increase, to some degree, the market clearing cost, and subsequently the quantity supplied, of such foodstuffs. Giving poor people more money those will, likely, increase the quantity supplied, if not actually the "supply", in technical economic terms, of basic foodstuffs (though a long-term increase in demand is likely to also stimulate changes that increase supply as well as quantity supplied, barring exhaustion of non-replaceable production capacity.)

"Increasing the cost of labor increases the incentive to invest in capital, etc., which increases labor productivity, since it makes more labor-intensive methods of production less profitable. This increased incentive to invest in purchasing these types of capital, etc., likewise stimulates investments in improving and developing labor-magnifying capital products, drives technological development, and thereby increases labor productive and the value of labor."

This makes sense in an undeveloped manufacturing economy, now consider a service based economy.

Norman claims to be a Duke grad ...

You could've stopped right there and I would have understood. :-)

If you go back and look at the statistics from the BLS that have been quoted here, and look at previous years back to 2002, the number of people working for the Federal minimum wage or less has dropped from 3 percent to 2.5 percent.

I'm with Clyde. It really irks me that wages are taxed (twice!) at much higher rates that capital gains. With Congress now in the hands of the People's Party, maybe an early order of business should be to tie taxes on labor to taxes on capital. Since capital gains are the income of the rich, they should be taxed at the highest marginal rate for labor.

The problem is this:
Capital gains aren't only the "income of the rich". Taxing capital gains, without exception or limitation, at the highest marginal rate for labor would hurt moderate income self-employed people who need to cash out, middle-class homeowners, etc., more than the rich.

That being said, an effort should be made to tax capital gains equitably with labor income, so that a person with similar overall annual income will make out the same no matter what mix of labor and capital they derive their income from. In order to do this, some special treatment for long-term capital gains is necessary, though it may be enough to let such gains be anticipated for tax purposes.

Additionally, programs that are currently funded based on taxes on (and where benefit eligibility is only established by) labor income must be extended to treat capital gains equitably as well: while this would reduce the realized, after-tax gains from capital investments. That a person earns money by trading capital reduces neither the social desirability of providing them minimal retirement security through Social Security nor the justification for expecting them to contribute in common to social programs like that.

The mac and cheese statement used to emphasize how stupid it would be to incentivize the increased production of low-end mass poduced goods that are already overly consumed.

Yeah that's what we need to do, encourage the poor to increase their already low-nutition high-calorie food consumption. That's what we'd be doing.

The point is that the poor consume, the rich customize.

This makes sense in an undeveloped manufacturing economy, now consider a service based economy.

Already did. It works the same, though the particular labor-magnifying investments may be different. Even in a service based economy, there is considerable value to be realized by labor-magnifying capital (and related) investments. There is a reason that, for instance, financial and other "knowledge" services spend enormous amounts of money on, for instance, information technology. There is also a reason for business-process patents and investment in development of business methods. Not every labor-magnifying product is a manufacturing robot. Note, also, that workforce development expenditures are a capital-like investment here.

You want to sell income redistribution, then prove that it will lead to better decisions (for example, choosing education, health, and less polluting alternatives).

You have way too much faith in the average american. You have to understand that average is our idea of dumb. You and I probably don't know anyone of average intelligence and probably don't even have to deal with one on an average day. Narrowing the income distrubution will lead to greater consumption and less focus on quallity.

Also, why is interest income taxed like wages and not like capital gains?

IIRC, both short-term capital gains and interest income are taxed like regular income and don't get the special treatment of "long-term" (>1 year period) capital gains because the logic of the special treatment of capital gains in a progressive tax system is that they develop over a greater period and therefore it is unfair to treat them all as being at the top marginal rate for the period in which they are realized, which logic doe