The Company Doug MacEachern Keeps

Posted by Bob Lord

The Arizona Republic's Doug MacEachern is out with his nuanced view of the minimum wage, which he's reduced to 78 words: 

The minimum wage is to the Left a sort of private-sector welfare: By the state’s edict, other people’s money is spent on counterproductive feel-goodism. See? Same as welfare. Over 37 percent of Black teens and 20 percent of White teens lack jobs for a reason. When entry-level jobs are more costly, there are fewer of them. The president’s proposal to hike the minimum wage will steal jobs; steal training; steal futures. Is that really worth making libs feel good inside?

Pretty deep thinking there, dude. Hope you didn't strain any brain cells. 

Doug's in some very impressive company with this view. The folks who have railed against the minimum wage include:

• Michele Bachman;
• Herman Cain;
• Rick Perry;
• Joe Miller (remember him?);
• Ron Paul and Rand Paul; and
• Peter Schiff

Quite a group.

 On the opposing side, you have Paul Krugman:

Now, you might argue that even if the current minimum wage seems low, raising it would cost jobs. But there’s evidence on that question — lots and lots of evidence, because the minimum wage is one of the most studied issues in all of economics. U.S. experience, it turns out, offers many “natural experiments” here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect of minimum wage increases on employment.

Why is this true? That’s a subject of continuing research, but one theme in all the explanations is that workers aren’t bushels of wheat or even Manhattan apartments; they’re human beings, and the human relationships involved in hiring and firing are inevitably more complex than markets for mere commodities. And one byproduct of this human complexity seems to be that modest increases in wages for the least-paid don’t necessarily reduce the number of jobs.

What this means, in turn, is that the main effect of a rise in minimum wages is a rise in the incomes of hard-working but low-paid Americans — which is, of course, what we’re trying to accomplish.

But to stop here would be unfair to Dougie. If you read his 78 words of wisdom carefully, the Dougster's not only arguing against Obama's proposal to raise the minimum wage. He's also suggesting that if we eliminated the minimum wage, market forces would result in all entry level workers finding work. To put it more bluntly, if you allow the going wage for entry level workers to sink to, say $2.00 per hour, any teenager will be able to find work. And, according to Doug, imposing a minimum wage and forcing employers to pay any more than they can bludgeon starving workers into accepting for their toil is stealing from those employers. In Doug's words, this is "private sector welfare" with the cost being borne by employers. 

Well, as to Doug's market theory, perhaps. But what about all the workers, teenage and otherwise, who currently are making the minimum wage? Wouldn't they ultimately be forced to take whopping pay cuts? And when this huge segment of the work force fell even further below the poverty level, who would pick up the tab? And what effect would this have on consumer spending? If 25% or so of the workforce took a huge pay cut, what effect would that have on the residential real estate market? 

As to Doug's argument that forcing employer's to pay a minimum wage is imposing the cost of private sector welfare on them, he's flat out delusional. No employer is forced to hire anyone. If a worker hired at the minimum wage won't increase the employer's profit, the employer won't take the worker on. Thus, an employer isn't paying for private sector welfare when he hires a minimum wage worker. Rather, the employer is implementing a decision he's determined will increase his profit. The minimum wage law simply says that if an employer does hire someone, he has to pay a living wage. The employer can't take advantage of a soft labor market and force a person to accept slave wages in order to avoid starvation. In other words, the minimum wage prevents employers from making an outsized profit by taking advantage of labor market conditions.

One last point. Doug's assertion that a hike in the minimum wage is "stealing training" from entry-level workers is either dishonest or moronic. Minimum wage jobs generally are back-breaking, mindless jobs. There's no training involved in scrubbing floors, washing dishes, or making hotel room beds.

Does anyone seriously doubt that if he were required to work in the back of the house of a restaurant or as a janitor for a few months, Doug MacEachern's views on the minimum wage would change? 

So, if you judged Doug by the company he keeps (Bachman, Cain, etc.), you'd have had him figured out. Or you can parse his logic and reach the same conclusion. The choice is yours.