Minimum Wage, Maximum Ignorance (2)

Regarding my item last Friday about the “expected” poor results from the higher minimum wage in Seattle, a perceptive reader offers the observation that the minimum wage should be better understood as a government ban on low-paying jobs:

The term “minimum wage” does not serve us well. Only an employer can decide on a true ”minimum wage,” in the sense of a determination to pay no less than some level. What Seattle, for example, has implemented is actually a “low-wage job ban.” That is no-one is legally allowed to offer a job for which they think fair compensation is less than $13. Further, any jobs for which fair compensation is in the $13-$15 range need to be phased out by next year. The city has told employers to think up some new jobs that pay more, and hire people, but there is no requirement that they do so, nor could there be.

With this perspective, we can better interpret statements like the following from Bernie Sanders:

“It is a national disgrace that millions of full-time workers are living in poverty and millions more are forced to work two or three jobs just to pay their bills. In the year 2015, a job must lift workers out of poverty, not keep them in it. The current federal minimum wage of $7.25 an hour is a starvation wage and must be raised to a living wage.”

What he is saying is really this:

“It is a national disgrace that millions of full-time workers are living in poverty and millions more are forced to work two or three jobs just to pay their bills. In the year 2015, a job must lift workers out of poverty, not keep them in it. The current federal minimum wage of $7.25 an hour is a starvation wage and no one should be allowed to continue to work for such low wages.”

It should come as no surprise that the policy espoused by Sanders is simply to ban something he does not like. This is not an isolated policy perspective.

Once you get started on this corrective, reading things like NYT editorials becomes a lot less unpleasant. Instead of this:

But instead of embracing $15, Mrs. Clinton fights on for $12, saying that states could set their own, higher minimums. That is cold comfort. Experience has shown that without a robust federal minimum, state minimums also tend to be inadequate. Today, 21 states still do not have minimums higher than the federal level, and of the 29 that do, none have minimums high enough to cover local living expenses for an individual worker.

You get this:

But instead of embracing a ban on jobs paying less than $15, Mrs. Clinton fights on for banning only those paying under $12, saying that states could set their own, higher bans. That is cold comfort. Experience has shown that without a robust federalban, state bans also tend to be inadequate. Today, 21 states still do not ban jobs not banned at the federal level, and of the 29 that do, none have bans high enough to prevent individual workers from being given jobs covering only a portion of their local living expenses.

See how it works?

Yes, and nicely argued.

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