Bliss, gosh, where to start. Lots of research confirms minimum wage drives unemployment and hits youth and minorities the hardest. Even if the jobs must be done minimum wage induces substitution from labour to capital. Not sure about multiplier effects, since macro is close to nonsense IMHO, but any income multiplier effect should be considered net of unemployment created by a higher minimum. How about an unemployment multiplier: min wages increase leads to unemployment leads to human capital depreciation leads to permanent exclusion from the labour market leads to poverty, crime leads to generational dependence. Most expensive pay increase imaginable. Nobody’s against paying youth more but if it is illegal to pay someone what they produce, and when they are starting out and their production is low as it will be, then that must harm their work prospects, by definition. Firms will be charitable on occasion, and good on them, but that is no way to organise an entire economy.

I hope you will recognise an argument that tries to build on reason and evidence not ideology out of a shared interest in seeing the most vulnerable get ahead.

Social justice is the single phrase, than any other I know, that gets more people excited, while at the same time meaning nothing in particular. It works by being all things to everyone. And it is trivial: nobody could be for social injustice. Hopefully Matt has written down what he means by social justice, which may or may not have anything to do with what everyone else is talking about.

Second point: on the whole I don’t go around accusing anyone of not caring about people, but I do think it reasonable to point out where the logical end point of an ideological framework is the de-emphasis or even exclusion of humanity, whether recognised and intended or not by the proponent. For example, a framework which does not recognise, in any circumstances, the human value of tradeoffs between environmental quality and non-environmental objectives could be argued to effectively assign zero weight to human suffering and existence. I struggle with the idea of imposing carbon limits on countries that have not yet solved the problem of feeding their populations. The cost of environmental standards in these circumstances can be measured in lives. Yet some elements continue to push such measures in those circumstances, rather than recognise the value of human life and happiness alongside environmental outcomes, and the (positive) long term relationship between incomes and environmental protection. I assert unambiguously my right to point out ideas which put people second and the consequences of that.

any “sensible debate” should start by acknowledging the well documented dis-employment effects of the minimum wage. Most of its supposed benefits apply only to those who already have jobs or who already have vital work experience, those on the inside looking out. Things are very much different for those on the outside looking in.

Let all of us agree to avoid the word naive – I don’t think it is adding too much in reality 🙂

Indeed, greater “government consumption/transfers” should by definition increase the ratio of non-tradable to tradable prices – which is exactly what we’ve seen. Hence why when I hear people saying they want more transfers and a lower real exchange rate in this sense, I feel like they are asking for a free lunch and get a bit uncomfortable.

I’ve got no problem with whatever trade-off being decided upon, but we do have to accept it 😉

One thing I’d keep in mind though is that we can’t costlessly redistribute”..

True. And one of the political results is govts spend increasing amounts of money trying to defend/maintain some definition of equality which then brings in other problems of (say) unsustainable borrowing. Perhaps all that can be done is recognise that they have created an inequality and use time limited and targeted welfare to allow for readjustment.

JC

your analysis itself is very naive and thoughtless and on top of that ignorant of the tradition in which you’re arguing.

not thoughtless, just have bad ideas. and what’s economic development?

Potential Pareto Improvement allows for said losses, as long as the gains are sufficient that there could be a transfer that would result in a Pareto improvement 😉