Are people who advocate for increasing the minimum wage (or having one at all) using a more advanced understanding of economics than those who oppose it?
A friend of mine shared an article on Facebook this morning, and I wrote a response I'd like to share here to spark some discussion. First, give this article a read: The Curse of Econ 101. Second, give me your thoughts on my reply below.
This is a good article which certainly challenges a lot of my views as I'm a fan of Hayek and Friedman. For me, the problem comes down to the use of force. Are those offering an employment position at a less than subsistence wage aggressing against others immorally? If so, then I can get behind the use of force to defend those who are being aggressed against. That said, I find that argument very hard to support. If I offer up a contract to the world and say, "Does anyone want to provide me with X service at Y price?" how have I aggressed against anyone? This is a voluntary contract. If my terms are horrible, it might make me a bad person and the community may need to shame and ostracize me, but have I really aggressed against someone by offering the contract?
On the flip side, every government regulation is backed by a gun. Do what we say or we will either steal your stuff via fines, confiscation, etc or we'll go so far as to put you in a cage after sending people with guns to threaten you. I can't morally justify that use of force against peaceful people.
I get we have a serious income inequality problem and it will only get worse over time. Automation is going to massively change the workforce and challenge our notions of how human beings provide value to each other. This is why I've been writing about universal basic income. Currently (sadly, IMO) governments have a monopoly on currency creation so they get to set the economic rules. They are pushing for business owners to shoulder the burden of those who can't provide enough economic value to the market given their education and skill set while at the same time sending 4,000 troops to Poland at a cost of $1,000,000 per year per troop. It's insanity. The productive economic output of our society is being siphoned off via currency creation and funneled into the military industrial complex. It's beyond wasteful. It's immoral.
Forcing changes to the economy to facilitate wealth distribution is (to me) a flavor of a philosophy which leans towards government-backed economic socialism which has (IMO) proven to fail every time. I do recognize there is a massive amount of wealth we all should benefit from as an emergent property of our technological advances and shared efficiencies. I think a blockchain-based universal income could solve many of these problems without the use of force or the centralization of power into the hands of those who control the guns which historically, always, without fail, leads to corruption.
What I don't like about this article is it does what many left-leaning arguments do. It tries to argue those who disagree are stupid or ignorant. It makes fun of those simpletons who only understand "Econ 101" while at the same time admitting the jury is still out given the research we have available. I appreciate calling attention to the studies and asking for people to be less sure of their basic economic convictions, but that doesn't mean those who hold those opinions are wrong or simpletons.
The mention of unions is interesting because ultimately it's not just about employment. I could hire someone to dig a ditch and fill it up again and society does not benefit. If, however, the decrease in unions brought about more competition which led to new innovation, new entrepreneurship, new technological advances, etc, etc... then we all benefit from the emergent properties there. Why not just pay that ditch digger a portion of the economic value of society for doing nothing and free them up to go do something which does actually benefit society like reading books to their children?
As the article tries to argue, these things are not that simple. We have to get away from the partisan talking points of "unions good" or "minimum wages bad" if we want to make progress. In order to evaluate "good" and "bad" I think we need to start with a shared understanding of morality (which is where I started this rant).