A Bad Boudreaux Critique of Minimum Wage Hikes

Here. He claims: "If this minimum-wage hike is truly justified by employer monopsony power, there’s no reason for any delay in hiking the wage."

Well, one reason to phase in the hike, even if one believes in monopsony power, is epistemic modesty: perhaps one's diagnosis is wrong, so let's start the treatment slowly, and see how the patient responds. If critics are right, and unemployment spikes, we can always repeal the law.

A second good reason for gradualism would be that even adopting a healthy diet or dropping a bad habit can be a shock to the system: cold turkey can kill a serious alcoholic, while gradual withdrawal might work fine.

It only took me a couple of minutes to come up with two perfectly sound reasons for phasing this hike in. If one is going to write a column claiming there is "no good reason for X," it is a good idea to spend at least a couple of minutes thinking about whether there might be a good reason for X.

Note: As I've said before, I think minimum wage hikes are at best a crude way to help the poor, and more likely to be a way to hurt them. Still, a bad argument against a bad idea is still a bad argument.

9 comments:

  1. A third is inflation over time reduces the size of the increase, but with him, if food is good, gluttony must be fantastic.

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  2. You have indirectly identified the real reason for the phase-in. So that we do not see an immediate spike. Not so that the effect is less, only so that it is less visible.

    But to defend Boudreaux. If the key word is justified, he has a point. If this hike, not a hike in the abstract, but this one, as he writes, is to redress a harm actively being done by monopsony then "if not not now, when?" You don't phase out an embezzler's peculations.

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    1. Well, Ken, I already gave a really good reason to phase it in: epistemic modesty. Perhaps I *suspect* monopsony power, but am not sure.

      And monopsonists are not embezzlers: there is nothing illegal about winding up with a monopsony!

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    2. But that's not the point I am making. If advocates SAY that the hike is JUSTIFIED by the monoposony then it is quite fair to ask why they would favor a phased approach. And if they answer about ill effects, that illustrates Boudreaux's point. And if they answer about epistemic modesty I will eat my hat.

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    3. Boudreaux claims there is no reason to phase in a hike. I show a good reason for phasing one in. This shows that Boudreaux is wrong, *whether or not* that is the actual reason that the actual advocates want to phase in the hike.

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    4. No. He claims if X then that. Claiming "if X then Y" is not claiming Y.

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    5. Ok, he claims if the real justification is monopsony power, then there is no good reason. And I have shown a good reason. And that last comment was an unnecessary tour into nitpicking.

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  3. cold turkey can kill a serious alcoholic

    It can?

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    1. Samson, do you lack access to Google?
      http://www.webmd.com/mental-health/addiction/alcohol-withdrawal-symptoms-treatments

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