A Minimum Wage

David Neumark, an Economics Professor at the University of California, Irvine, thinks he has an idea on how to implement “fairly” a minimum wage.  Unfortunately, his idea isn’t even good enough to be bad satire. He wants to

provide a tax credit of 50% of the difference between the prior minimum wage and the new minimum wage for each hour of labor employed. It would phase out at wages above the new minimum wage and, as wage inflation erodes, the value of the new minimum wage.

Thus, taxpayers would pay a significant fraction of each minimum wage—folks in New York would pay into the minimum wage of Seattle’s residents, for instance.  Worse, the employer in question would no longer be fully engaged in the wages of his own work force.

With this, Neumark thinks he can

transform the minimum wage into a more sensible redistributive policy.

This, of course, is a nonsensical oxymoron (excuse the redundancy). The only sensible redistributive policy, the only moral redistributive policy, is a voluntary payment of value for value received. That’s an exchange that can only be determined by the participants.  It’s also an exchange that keeps the employer and his workers fully and solely answerable to each other.

Voters think income inequality is too high, and politicians who want to keep their jobs must respond.

No, we don’t, and politicians who want to keep their jobs must recognize that.  Politicians must stop treating their poorer constituents like inanimate tools whose sole purpose is vote harvesting, and instead them like the human beings they are.

Leave a Reply

Your email address will not be published. Required fields are marked *