The Minimum Wage: Common Arguments

With Bernie Sanders so popular on my Facebook feed, the $15 dollar/hour minimum wage has been floating around a lot, and there are a lot of arguments that I think need to be addressed.

A good starting point to refute is the Salon article about the myths of the minimum wage. 

Myth 1: The minimum wage was never meant to be a living wage. 

Liberal/Progressive Take: Everyone working a full time job should be able to support their family.

Okay, so I'm not going to argue intent of the policy. It may well have had the noble intention of having everyone living above the poverty line. Intentions, sadly, don't really matter. What matters is the effect of the policy and the means by which the policy is enacted. 

The problem with the argument about the minimum wage is the definition of 'living wage.' I have lived at $8/hour. It wasn't that bad. Adjusted for inflation, that is about $10/hour in today's dollars. In graduate school, my wage is officially ~$20/hour, but I only get paid for 20 hours/week. This would be full time at ~$10/hour. I have lived fairly well on that. One problem with having a single living wage across the nation is nonsensical. A living wage will be different in LA or NYC than it will be for some podunk town in the middle of nowhere. A national minimum wage would try to impose the living wage of NYC on a smaller town that has a lower cost of living.

Also, I often hear that a parent should be able to support their family on the minimum wage. This is a load of bull, with a very simple question. How big is the family? Should a single mom be able to support three kids? 4? 5? Where do we draw the line? What about a two parent household? Should they be able to support any number of kids on minimum wage? This notion of supporting a family is one that doesn't allow for the continuation of the logic. 

Myth 2: Minimum wage increase won't help anyone if other costs go up too

Liberal/Progressive Take: This won't make a difference in inflation because it will take people off other welfare programs, and will also stimulate the economy with additional spending.

This argument is basically that paying people more will take them off welfare, and allow them to get off food stamps and other welfare programs. The problem with this argument is that it is that it is also just as possible that because people on the welfare system know it so well that instead of earning more, they will try to cut back hours to stay on welfare because it is familiar. We can't be sure as to the response of people to this particular stimulus.

As to the argument about stimulating the economy, this is the standard broken window fallacy. The workers who are getting paid are spending more, sure. But you don't see the employees who were never hired and what they spend, or the other spending that the businesses would have made if they didn't have to pay workers the additional amount. 

Myth 3: An increase in the minimum wage is bad for employers

Liberal/Progressive Take: This will spur workers to be productive, and make business run more efficiently.

It will certainly spur employers to find ways to cut employees out. The way that wages actually rise is by individual workers becoming more productive on average. Raising the minimum wage will indeed force employers to do more with fewer workers, which goes against the progressive response to Myth 5. If we pay workers more, they have to work harder to compensate, or work with additional capital investments to make them more effective.

As to other arguments about paying more being a good business practice, that is something that individual business owners have to determine. For most industries, this is true, since according to the Salon piece, only 4.7% of workers are on minimum wage. This means that 95% of employers ALREADY KNOW that paying employees more is good for retention, and I think the reality is all employers know it, but they don't care about keeping the 4.7% that is on minimum wage, otherwise they would pay more. Duh.

Myth 4: $15 is a random number.

Liberal/Progressive Take: It is what is required to raise workers above the poverty line, while being feasible for businesses.

So that means if the poverty line changed, this number will change. So who defines the poverty line? Also, who determines what is feasible for businesses? The minimum wage would take the ability of employers to find what is feasible for them, if that number is below this proposed minimum. 

Myth 5: It will cost us jobs and raise unemployment

Liberal/Progressive Take: There is no evidence from analysis of 13 states, and these states had faster job growth.

This directly contradicts point 3. If workers become more productive, that means that you can do the same amount of work with fewer workers. Also, this is a causation is not equal to correlation. Just because these states had faster growth and increased the minimum wage, doesn't mean that they are directly related. These states may have grown even faster if the minimum wage was not raised. I would have to see a more careful analysis rather than the aggregation at the state level, and other confounding factors. 

Myth 6: Only teenagers and uneducated people work for the minimum wage.

Liberal/Progressive Take: 4.7% of the working population is at or below minimum wage, and 88% of those are above the age of 20, and 43% have attended college.

What kind of college education? There are many fields in the social sciences and humanities that don't really have economic value to most companies. Do they have value? Sure, but not to companies trying to serve consumers. So college education can be (though isn't always) irrelevant. Should I care about your dance major? Depends. Am I a dance company?

The 88% of people on minimum wage who are over the age of 20 don't have a whole lot of other opportunities. If they did, they would be working for more than minimum wage. But that is irrelevant. What is relevant is if we are then advocating for age discrimination? Should someone be entitled to higher pay just because they are older? I would say no. Why should it be okay to employ a highschooler at minimum wage, but not a 21 year old, or a 30 year old? To use another social justice bugbear, that would be unequal pay for equal work, and that is not right. So why are these 20 year old unable to do more complex jobs that pay better? Have they not learned on the job? Why should they be entitled to more just because they are older?

Myth 7: Seattle already has a minimum wage of $15 and it's terrible

Liberal/Progressive Take: Totally not terrible, and the $15 minimum hasn't been reached yet

This is hard to argue about since it is true, they haven't gotten the wage to $15/hour yet, because of a slow roll out. So we can't judge the effects. Also, the big companies with large profits that they cite, Starbucks and Howard Schultz, are not the companies that would be most affected. Those are companies that are operating marginally, and just scraping by. That what is meant by the marginal change. It is not going to change for companies that are doing well, but a company that is doing barely okay will not make it. 

Statesman vs Politician

There is a distinction that I think a lot of people miss in how a democratic government works. Most people combine evaluations of politicians as 'good' and 'bad' based on criteria which is not important to how they are selected. I make this distinction between statesmanship and politics.

Lets start with politics. I would consider a good politician someone who gets elected. The best politicians are the ones who get elected to the highest office as many times as allowed. Obama, George W Bush, Clinton, and Reagan were good politicians, Reagan was the best of those, from the electoral results. They all were elected to the highest office twice. My statement that these are all great politicians is usually challenged because people confuse 'politician' with 'statesman.'

A statesman is someone who is good at governance. These are the people who are able to make government function effectively. Good statesmen are NOT the same as good politicians. The key problem with the democratic process is that we want good statesman, but we select good politicians, and they are not the same. This is why things whether getting a beer with a candidate are political questions, even if they have nothing to do with making effective policy.

#Transracial: Cognitive Dissonance in the Cultural Narrative

So Shaun King has been trending on twitter as the next public "Transracial" person after Rachel Dolezal. There have been articles attacking pointing out that he is white from the conservative side, and articles from the left saying rebutting that. At this point, I haven't seen any rebuttal about his father being white, only a rebuttal of the police reports and other secondary claims (car accidents and number of children). With Rachel Dolezal, there wasn't much room for refutation, since her biological parents came forward and said that she was white. The birth certificate on the Breitbart article is credible, then there is no other point that needs to be made about this case.

But there is something about the claim of transracialism that seems to have liberals in a bind. In my cultural anthropology course in college (or university if you are outside the US), we were told that race is a social construct, not a biological fact. But then there is a question of who gets to choose what race we are? Lets claim that society, in the aggregate, chooses for us. How does that change an individual's ancestry? It doesn't, and it can't. If we take race as purely a social construct, then transracialism is just someone adopting the social identity of another race. No big deal. Except that isn't what happens. The people who claim to be another race are somehow lying. They can't be transracial because they aren't 'actually' black/asian/whatever, because their parents weren't. 

There is some truth to the claim that race is a social construct, but it is clearly not purely a social construct. There has to be some basis for it. Bill Clinton and George Bush will not be considered African American. We can correct people who get our race wrong, and we back it up with the biological evidence: "My parents are from xyz, not uvw." If race is a social construct, the transracialism is not a big deal. But identity politics is so obsessed with race and gender that being transracial changes your status, and the fight becomes whether you are allowed to assume the label of an 'oppressed' group, or if you are more oppressed  for not being taken seriously about it. 

I personally think that we would be better off leaving the identity politics behind, and strive to treat everyone with respect. If race is a social construct, won't it go away if we start ignoring it? Then transracial will have no meaning. 

Democrat vs Socialist

There was a recent exchange between Chris Matthews on MSNBC and the DNC Chariwoman Debbie Wasserman Schultz regarding the difference between a Democrat and a Socialist. She was unable to articulate a difference, which is telling in itself, but it warrants a little more discussion than to say that there is no difference.

The main difference between the Democrats and Socialists is really a matter of degrees. There is no fundamental philosophical difference between the two, which is why it is so difficult to articulate an answer. Fundamentally, both Democrats and Socialists think that government should be used to help those who have been disadvantaged for some reason. The philosophical standpoint is the same: that the Government is 'the people,' and so the Government is morally responsible when we use the phrase 'We should do xyz.' Examples include 'We should help the poor,' 'We should feed the hungry,' 'We should educate children.' While these are morally laudable goals, there is the equivocation between the personal (we, as individuals, should help the poor), and the political (we, through taxes, should help the poor).

Once we accept this frame that the personal values should be reflected in government, Democrats and Socialists are only really different in the degree to which they think these policies should be implemented. In some ways, the Democrats are just politically viable Socialists. They would be in favor of Socialist policies, but they might not be able to remain politically viable after they propose them.

Republicans and conservatives have a slightly different philosophy, at least in theory. The rhetoric that they use tends towards acknowledging the difference between the personal and political, and there is an understanding that just because you think that the state should not be involved, doesn't mean that you advocate against that thing. There are a few major (and quite troubling) exceptions: religion and gay marriage, and abortion. For the most part, in issues other than these two, conservatives and Republicans are willing to separate the personal and political (at least rhetorically).

The philosophical problem with Conservatives is when they get into the political. In the political arena, they end up playing the part of militaristic nationalists. Because America! They also tend to agree with the vast majority of the policies of the Democrats. The disagreement is at the margins, like what the tax rate should be, or how large the benefits should be, rather than if there should be benefits at all. They also tend to equate whatever the current system is as free market capitalism, even though it is very much not, even if it is more free market capitalism than whatever the Democrats are proposing.

Bernie Sanders: Problems with Soundbite Policies

Bernie Sanders is a self described democratic socialist who has become fairly popular among young liberals. He is technically independent, but he is running for the Democratic Party nomination. I disagree with most of his economic policies (as I will outline below), but I'm glad that he is at least open about his stances, and he often correctly identifies problems with the current system.

The Policies:
Going through his website, his own promotional material, we have the following headlines:

Real Family Values
Create Decent Paying Jobs
Income and Wealth Inequality
Getting Big Money Out of Politics
Climate Change and the Environment
A Living Wage

As headlines, these might be things I could support in sentiment, but not in practice.

Real Family Values
Bernie Sanders uses 'real family values' as things like mandatory paid vacation, sick leave, and other benefits.These are not the responsibility of the government to provide workers. This is something that workers should negotiate with the employers themselves. How can the government know how much vacation each worker needs or wants? Furthermore, with medical leave, he proposes that it be paid for by an 'insurance' program like Social Security. Government programs are not insurance, and it would not be optional, it would be mandatory.

Many of these policies focus only on the workers' side of the equation, with out recognition that the employers are people too, and have to look out for the interests of the consumer. Suppose a key employee gets sick for an extended period of time. Okay, they now have paid leave. The project that they were working on is sitting around waiting for them to get back. The project is on a tight deadline. What is the employer to do? If this is a key project, and required for the future profitability of the company, then a replacement needs to be hired to do the work of the person on leave. Now, when they get back, what happens? One of them is redundant, and should be fired (or reassigned in the wider economy, if that makes you feel better). The worker is not entitled to pay from an employer without the corresponding exchange.

All of the proposals under this heading are additional regulations on what people are allowed to negotiate with employers. In my ideal world, employees would be able to freely negotiate these terms without the need for a government program or system to require the terms of the employment contract.

Create Decent Paying Jobs
This is a typical view of both the political Left and the political Right. He advocates for a large spending program to build infrastructure and employ young Americans. He doesn't go into the details of what this would mean exactly, but it is a government intervention into the economy which will lead to more problems down the road.

He does correctly point out that the official unemployment rate is inaccurate, since the official numbers ignore the people who have given up looking for work, or those who want more hours. The solution is not, however, to spend other people's money to have people doing what no one cares enough about doing. At least part of his program will include job training, which is less than useless, since it will be paying people to teach other people how to do jobs no one else wants. If they did want them, they would be paying already.

It is conceivable that there are some people who would benefit from these job training programs. The problem is that it is essentially the broken window fallacy. The gains that we see are at the cost of actions we don't see. We can't see how the teachers and instructors would be spending their time if they weren't employed in this government program, and we don't see how the taxpayers who are paying for them would otherwise spend the money.

Income and Wealth Inequality
I've touched on this before, but it bears some repeating. Income inequality is not important. At all. The problem is that the poor are poor. If they are getting even poorer, that is an even bigger problem, but the richness of the wealthy is not at all a problem. There is some degree that this is a complaint about how the world is not fair, and how the rich and the poor should be closer together. In addition to the complaint being about how life is not fair, there are no reason to think that government intervention would improve the situation. In fact, I think that the government intervention has made the problem worse. It is government intervention and regulatory capture that leads to these problems in the first place, and if the banks had been allowed to fail and go through bankruptcy, maybe we would need his plan to break up the banks,

Getting Big Money Out of Politics

Here, I think is one of the worse misinterpretations of the First Amendment that is the problem on the Left, and one that I would hope Bernie Sanders understands better than he is letting on, since he is an independent.

First, I will give him due respect for advocating for a constitutional amendment rather than just overturning the ruling, though he is advocating for that too. But the problem with these ideas is that while money might not quite be speech, money must be spent to make speech effective.

He goes into a little more depth with his interview on Vox, where he gets into ideas that could get very dangerous for democracy, even more than he thinks ours is in danger from the oligarchy. His first idea after reversing the Citizens United decision is to at "at least make sure that candidates who are running will have as much money as their opponents." This might sound okay at first glance, but consider these questions:
Who determines a candidate?
What kind of paper work is required?
Can anyone become a candidate?
Is there a limit on the number of candidates in each race?
Will it be restricted to official political parties?
What if the candidate is religious? Will the state fund the campaign even if it is a religious one?
What about independents?
These are all questions need to be answered about publicly funding candidates. The power is shifted from the voters to the people who pick the candidates. This has already happened to a sad extent because of ballot access laws that impose additional requirements on candidates outside the two party system. Public funding of elections will only exacerbate this problem.

His other idea on this vein is not as bad, but seems somewhat redundant. He thinks that a $100 tax credit for donating to any candidate as a way to 'democratize' the election funding process. It is better than the previous idea, since it doesn't spend taxpayer money on candidates, but my $100 contribution is already a vote. If I'm giving $100 to a candidate, I'm voting for them, and paying them $100 to help convince other people to give their vote to them. At that point, you could basically hold the elections as fundraisers, and each person has 100 votes to spend on the candidates of their choosing. It seems a little redundant.

Climate Change and the Environment
Here, he claims that we need to move away from fossil fuels, and use government funds to 'stimulate' the economy to reduce greenhouse gas emissions. This doesn't address part of the problem in that the traditional energy companies receive other government subsidies. The way to solve the problem is not to add additional stimulus, but to take away subsidies from the traditional system.

Living Wage
The debate about the minimum 'living wage' is an interesting one, but it again gets into a question of entitlement of the workers. Workers are not entitled to a living wage. Also, the living wage is different in different areas of the country. A national minimum wage doesn't make sense, since the living wage in New York City will be much higher than in Podunk, Anywhere. Personally, where I am now, I can live quite comfortably on $10 an hour full time. That is significantly lower than the living wage that he proposes.

Many people advocating for the living wage also claim that it is not possible to raise a family on the current minimum wage. That sucks for the kids, but why should the bad choices of those parents be our responsibility? It is a very simple solution: don't have kids. Having kids is a choice, and it is one with many long term consequences. If you can't afford children, make the choice not to have them. If you do have them, then make the sacrifice and work your ass off to take care of them, but don't complain to the people who haven't made your choices for you.

The living wage also runs counter to personal agency. People should be allowed to set their own price for their labor, even if it is below what anyone else thinks is tolerable. The living wage infringes on the rights of both the employer and employee to set the prices of their own services.

Equal Pay for Equal Work is Incompatible with Free Market Capitalism

The buzz phrase “Equal pay for equal work” is most commonly associated with the so called ‘gender wage gap,’ that women are getting paid less for the same work. While there may be a small gap due to discrimination, it is certainly not the 77% number that is often cited by mainstream reporting. But that is not the biggest problem with the issue of the phrase “equal pay for equal work.” The real problem with this phrase is that it is in fact regressive. If we truly embrace this philosophy, then it will be essentially impossible to progress, either technologically or socially.

Economic and technological progress hinges on the exact opposite idea: do the same work for less pay. Even better, many do better work for less pay. This is the nature of economic and technological competition. Technological progress strives to lower prices, producing the same goods at a lower price point. The winners are the ones who provide what consumers think is the best product for the lowest price. Cutting the price for the same product, or a superior product requires paying less for all the accumulated labor that produced the product. This is essentially less pay for equal work.  

Perhaps this is a misunderstanding of the phrase. What if we use another conception of the phrase? Let us examine equal pay for equal output, equal pay for equal effort, and equal pay for equal time worked.

• Equal pay for equal output: This is the most reasonable interpretation in my opinion, but even in this case ‘equal pay for equal work’ is wrong. In this interpretation, the price of products could never fall, since we can consider the product to be the output. If equal output must be paid the same rate across the market, then computers would in fact be more expensive that the first computers, since they do so much more.
• Equal pay for equal effort: We can consider this to be in some sense to be equal sweat equity for equal pay. This is also wrong, because just because someone works really hard doesn’t mean that their effort is valuable. If we have two people who dig ditches and move the dirt to a more useful location (landscaping or something), and one of them puts the dirt in the wrong location that is just as far away, I think we can see that they have both put in equal effort. One put the dirt in the right location, while the other did not. Clearly, the one who put the dirt in the wrong location should not be paid the same amount as the one who put it in the right location. If we required equal pay for equal effort, we would be forced to pay misdirected effort the same as good effort, which is clearly wrong.
• Equal pay for equal time: This is clearly ridiculous, as if we had to pay equally for equal time, hourly salaries would be the same for every profession ever, where clearly some are worth more than others. Someone who can build a twice as fast as someone else should clearly not be paid half as much for the same house (and faster too).

These objections might seem trivial, but they demonstrate the significant problems with the mantra ‘equal pay for equal work’ even if we can clearly define what equal work actually means.

Capitalism, by which I mean the free market, works by allowing the competition of people to accept lower pay for equal work; by giving people the freedom to provide services for cheaper than other people. 

Secession and the Consent of the Governed

Discussion of secession in the United States is usually tainted by the connection with the term to the Civil War and slavery. This can be quite frustrating, as questions of secession are fundamental to the legitimacy of a government, and the topic can get derailed into talk about the evils of slavery, and how to solve them without war.

I think of the question of secession as being linked with the idea of the consent of the governed. How are they connected? The consent of the governed is the idea that a legitimate government is only legitimate if it has the consent of the people over which the it is ruling. This is fairly well accepted, and is a phrase used in both the Declaration of Independence, and a similar idea is expressed in the UN Universal Declaration of Human Rights: "The will of the people shall be the basis of the authority of government." Secession is what happens when a substantial subset of people withdraw their consent to be governed by a particular government, and separate from it.

For the governed people to meaningfully give consent, it must be possible for that consent to be withdrawn. If consent cannot be withdrawn, then a government that turns tyrannical is just as legitimate and consensual as a democratically elected government. So what should happen when a group ceases to consent to the current government? Under democratic ideals, they would vote in a new set of rulers to whom they consent. Now suppose that there is a significant geographic split, and the people in one region want to be ruled one way, and people in another region want to be ruled another way? Should the minority in that case be ruled by the majority from the other region? Or can the minority region autonomously withdraw consent to be ruled by the other region?

I think that the answer is fairly straightforward in the abstract. The people in the minority of the whole country should be allowed to split off from the nation, and choose their own form of government that has the consent of the people who live there, even though that was the minority of the people in the original nation as a whole. Furthermore, the independence of the minority region should not be dependent on the opinions of the majority region. If the minority region wishes independence, then any action by the majority region to stop the secession is seeking to deny the will of the people in that region. It could be viewed as a form of Imperialism.

So what happens if we continue this process? If there is another significant minority in the original minority (now majority) of this new country? Well, I think the same logic applies, and that region should be allowed to break off from the new country to form another country which has the consent of the governed.

Another side to think about consent of the governed is this: What should happen when an individual withdraws consent to be governed by the current regime? They could certainly be the majority of the people that occupy their property (assuming a land owner), so should they be able to withdraw consent unilaterally?  If not, then how large a group do you need to revoke the consent? A city? A town? A county? A state? At what level do we draw the line?

I personally think that an individual can withdraw their consent to be governed, and they should be free to do so. The only valid retaliation would not be for the withdrawal of consent, but for aggressive action on the part of the individual. A state, company, or coalition certainly has the right to use the powers of defense delegated to them by the consenting members of that state, company, or coalition.