Obamacare was pitched as a moral imperative. Humans are entitled to health insurance as a basic right. We are responsible to provide health insurance, not simply health or emergency care, to anyone residing within the borders of the U.S. Yet Obamacare was designed with the expectation that tens of millions of Americans (plus millions of undocumented immigrants) would remain without coverage (statistics).
Are we doing the same thing with the $15/hour minimum wage? People advocating to make it illegal for Americans to work for less than $15/hour say that it is a moral imperative. But then the moral imperative phases in through 2020 or 2022? We’re going to behave immorally for the next six years but then become moral actors in 2022? Businesses can exploit workers in 2018 by paying less than a fair wage but beginning in 2022 the exploitation must stop?
Example from BernieSanders.com: “Millions of Americans are working for totally inadequate wages. We must ensure that no full-time worker lives in poverty. The current federal minimum wage is starvation pay and must become a living wage. We must increase it to $15 an hour over the next several years.” (i.e., poverty and starvation amidst plenty are okay in 2016 and 2017 but they will become unacceptable at some future date)
Even left-leaning economists are worried about a $15 minimum wage. A better policy to help the working poor is subsidizing the wages of low-income workers via the Earned Income Tax Credit. There are better anti-poverty tools than the minimum wage.
How can there be a “left-leaning economist”? If economics is an analytical discipline with experimentally verifiable results, why would a person’s political beliefs influence his or her conclusions in applying economics?
[But more to the point, even if there are some economists who don’t favor the $15/hour minimum for whatever reason, my original question still stands regarding those who do advocate for such a minimum as a moral issue.]
They’re phasing it in gradually in order to obscure the statistical effects on employment.
Interesting how 2020 is the year of the next election cycle. Just enough time to get a second term locked in without having to deal with the economic consequences of increased minimum wage.
It’s also interesting how congress is proposing to decrease minimum wage for Puerto Rico as a solution to their economic problems. How can both be right when they’re the exact opposite?
Russil: I looked at the article you cited. It says that a higher minimum wage may increase unemployment. I don’t think that is related to my original question. Nobody has asserted that it is immoral to be unemployed. Yet it has been asserted that it is immoral to pay someone less than $15/hour. So if you believe that this is a moral issue a big reduction in the number of workers should not upset you to the point that you would be willing to compromise your morals.
Hey, you’re the Bernie Sanders supporter, not me! Personally, I would argue that helping the working poor is what’s important here, and that increasing unemployment hurts them rather than helping them.
Regarding your earlier question about what “left-leaning economists” means: obviously economics has a big impact on public policy and therefore politics. So in economic analysis there’s a danger of rationalizing to justify your pre-existing political beliefs, instead of actually following the chain of reasoning. (I think economists talk about “being wary of your personal ideological priors.”) In this case it serves to insulate against the accusation that “economists are just saying that because they hate poor people” — even economists who want to help poor people think that a $15 national minimum wage isn’t a good way to do it.
$15 per hour means more taxes. If they just said, “anytime you earn $9.75 per hour or less, you pay ZERO taxes on it” it would have the same net effect on the worker, but less pain for the business hiring them, right?
The better question is what happens when all the $15/hour workers discover that they no longer get free Obamacare, but instead have to pay out of pocket?
Given all the means-tested social benefits, $15/hour is mostly a transfer from business to government.
I look at healthcare less as an entitlement and more as a basic requirement. I know people are enamoured of their ability to make choices, but I’m less fond of it when they have no intention of dealing with the consequences of their choices. Which is a major problem lately. The folks who think themselves injury and disease resistant will still show up at an emergency room after a car accident or heart attack. If they can’t pay and don’t have insurance, the hospital will charge everyone else more to cover the lost revenues. So we all pay for the alleged Superman’s medical care costs. Isn’t that the very definition of socialism?
Next lets look at the “living wage”. When the minimum wage was instituted and the term “living wage” was coined, this was a process to avoid a business taking advantage of unskilled labor and helping people keep a roof over their heads and to avoid starvation. In other words, a room in a boarding house or space in a group home and to be able to consume a few basic meals in a day.
This concept is now extended to believe that you should be able to have your own apartment in a high cost of living area, own a car, have an iphone and cable internet, eat take out food, get married, raise children, etc. Sorry, but if your best skills were learned watching a 20 minute dvd in a break room, that isn’t the lifestyle you are then entitled to live. When I was younger I worked a full time job and two part time jobs to make ends meet. I learned a skill, worked hard and sacrificed a lot to improve my income and lifestyle. At no point did I feel entitled to more than I could afford. I lived in cheap neighborhoods with roommates, I waited to get married and have kids, and I ate cheap food.
This minimum wage thing is loaded with unintended consequences and a serious case of mistaken assumptions, the primary one being that you can work in a fast food place for 40 hours and afford to live in NYC with a wife and two kids, or work in customer service at Yelp and afford your own apartment in the Bay Area.
Entitlement and choices without consequences.
@cfbcfb ” your own apartment in a high cost of living area, own a car, have an iphone and cable internet, eat take out food, get married, raise children, etc.”
A woman can get this in 10 minutes working on her back. Maybe not the get married part but everything else funded with child support. That’s “entitlement” she can take to the bank.
$15/hr doesn’t quite make the grade. Not working is worth about $40,000 (=$20/hr for a full-time job) to $70,000 ($35/hr) depending on how well you can play the system, even without child support payments or alimony. A vendor I work with can’t even hire people for $15 to $20/hr – no one applies for those jobs.