Friday, June 23, 2006

Polarized Wages

A proposal to raise the federal minimum wage is creating much debate and silliness in political circles, on the talk shows, and in the blogosphere. It seems like pretty much everyone splits on this issue along party lines, with Republicans opposing it and Democrats supporting it. My question is this: do most conservatives actually know or understand the economic argument against raising the minimum wage? How many will actually say that the artificially-increased price of labor will cause a decrease in the demand for labor, thereby putting many low-income earners out of work, rather than making minimum wage? Or will most make some grousing about “those people (mostly immigrants, no doubt) don’t deserve a raise”? On the other hand, are any liberals actually able to rebut this argument on economic grounds? Think many have even considered the fact that increasing the minimum wage may lead to increased unemployment? Or will most ignore supply and demand and just plead that “these people deserve a living wage”? I’d be shocked to hear your average bleeding-heart liberal give the sound economic rebuttal that if there are monopsony conditions for low-wage workers, the imperfect competition could mean that an increase in the minimum wage will not lower employment and can actually raise efficiency. People are very eager to truncate the debate, but it's clear that it can get complicated (and passionate).

The lesson? Confirmation bias is alive and well, it seems. And I this might be a perfect example of the outsourcing of political decision-making. Which isn’t necessarily a bad thing, but it doesn’t bode well for those of us who want individuals to take more responsibility for themselves and their opinions. Freedom’s tough, because it requires some thought.


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