Tuesday, January 23, 2007

Socrates and the Minimum Wage

Larry Reed of the Mackinac Center for Public Policy argues that what members of Congress need is not another lecture on the minimum wage from an economist, but rather an old-fashioned Socratic inquisition. If Socrates were with us, here’s how Larry Reed imagines such a dialogue might go.

Congressman: Look, a minimum wage of $7.25 per hour isn’t much.

Socrates: I’d like to know how you arrived at that figure. Was it some sophisticated equation, divine revelation or toss of the dice? Why didn’t you choose $20.00, which is not only a nice round number but also a lot more generous?

Congressman: Well, $20 would be too high, for sure. Too much of a jump at once.

Socrates: It sounds like you think the cost of labor might indeed affect the demand for it. Good! That’s progress. You’re not as oblivious about market forces as I thought. What I want to know is why you apparently don’t think higher labor costs matter when you raise the minimum wage from $5.15 to $7.25. Do you think everyone, regardless of skill level or experience, is automatically worth what Congress decrees?

Congressman: Now hold on a minute. I’m for the worker here.

Socrates: Then why on earth would you favor a law that says if a worker can’t find a job that pays at least $7.25 per hour, he’s not allowed to work?

Congressman: I’m not saying he can’t work! I’m saying he can’t be paid less than $7.25!

Socrates: I thought we were making progress, but perhaps not. Can you tell me, if your scheme becomes law, what happens to a worker who is worth only $6.00 because of his low skills, lack of education, scant experience or a low demand for the work itself? Will employers happily employ him anyway and take a $1.25 loss for every hour he’s on the job?

Congressman: Businesses need workers and $1.25 isn’t much, so common sense and decency would suggest that of course they would.

Socrates: So employers who employ people are too greedy to pay $7.25 unless they’re ordered to, but then when Congress acts, they suddenly become generous enough to hire people at a loss. Who was your logic instructor?

Congressman: Can we hurry this up? I’ve got other plans for other people I have to think about.

Socrates: I give up. You congressmen are incorrigible. You’re the only people on whom my teaching method has no discernible impact.

2 Comments:

At 1/25/2007 11:27 AM, Blogger Nathan said...

Well done!

 
At 2/05/2007 9:21 PM, Anonymous lovme2tms said...

By all means marry; if you get a good wife, you'll be happy. If you get a bad one, you'll become a philosopher.
- Socrates -

 

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