The $15 minimum wage will kill jobs.

Photo: Getty Images

This is a story about ethics and economics, winners and losers, and the philosophical muddle on both ends of the political spectrum, as told through two of the hot-button issues of the 2016 U.S. presidential race: the minimum wage and free trade.

Start with an unpopular but irrefutable fact: Raising the minimum wage to $15 an hour, as some states are doing, will create both winners and losers. The winners will be workers who get paid more, of course. The losers will be low-skilled workers who don’t get paid at all, because employers couldn’t afford to keep them on.

Should you care that a measure intended to make people better off will actually make some worse off? That’s a deep question that has exercised such greats as John Stuart Mill, Vilfredo Pareto, and John Rawls. Before you answer it, though, please consider the case of free trade, which involves a similar conundrum. Like raising the wage floor, lowering barriers to cheap foreign imports makes a lot of Americans better off (by cutting the cost of baby clothes, toys, televisions, etc.) while undeniably hurting others (by closing down their factories).

Advertisement

This is where it gets interesting. As similar as the two cases are, the political reactions to them are not. Liberals like Bernie Sanders are strongly in favor of raising the minimum wage, yet suspicious of free trade. When it comes to the minimum wage, they’re all about the greatest good for the greatest number, but on the topic of trade they’re focused intently on protecting the disadvantaged minority.

Conservatives are just as self-contradictory on these two issues, only in the opposite direction. They worry a whole lot about Americans losing their jobs because of a higher minimum wage, but are less concerned with people losing their jobs because of lowered trade barriers.

These don’t seem to be cases of outright hypocrisy. Instead, they simply reflect the human tendency to be impressed by evidence that confirms our beliefs and reject information that challenges them. We see what we want to see, economist and author Tim Harford wrote in a recent column.

Advertisements

About robertjrussellcompanies

International Real Estate Agent * Insurance Broker * Radio Talk Show Host * Public Speaker * find out about me - visit http://www.robertjrussellcompanies.com
This entry was posted in Business and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s