Updrafts

Megan McArdle writes disapprovingly of the minimum wage:

Both at Crooked Timber, and in my own beloved comment threads, the suggestion has been made that the minimum wage is really swell because it gets rid of low-productivity jobs that only pay the minimum wage.

This sounds lovely–if you are the kind of person who has the skills to get one of the higher productivity jobs. Not so great if you’re a high-school dropout with no appreciable credentials. In effect what you’re talking about is a massive transfer from the weakest members of society.

Let’s say raising the minimum wage makes them unemployable, while creating new, higher skilled jobs making and maintaining the equipment that replaces them. Good for skilled workers. Possibly good for society in some sense, though raising unemployment is rarely a net boon. Definitely awful for the lowest skilled workers, who now can’t get a legal job.

Helping the moderately paid worker by forcing the least skilled out of the legal job market is a very, very bad policy. Whether or not you think that the government ought to be in the business of transferring wealth from one segment of society to another, I hope we can all agree that at least the transfers oughtn’t to go upwards.

This is a crucial but often overlooked point. In fact, it played an important role in my own political formation. The Democratic party, which bills itself as looking out for the “little guy,” increasingly stands for upward transfers—”updrafts,” let’s call them—rather than the downward transfers their rhetoric advocates. The minimum wage transfers from the least advantaged to the not-quite-least-advantaged workers. Support for unions transfers from less-advantaged nonunion workers (often minorities) to more-advantaged union workers. Restrictions on trade transfer from foreign workers and domestic workers lacking political clout to domestic workers with political clout. Support for the arts and humanities, to take something closer to me, takes from the average taxpayer and gives to professionals with advanced degrees and impressive academic affiliations. The current housing bailout takes from the average taxpayer and transfers to people who made risky investments in housing (mostly in California and Florida) and in mortgage-backed securities. And so on. The “heartless” budget cuts proposed by conservatives of yore mostly affected these updrafts, and could have been defended on distributive grounds alone.

I sometimes think that conservatives should base more of their arguments on Rawlsian premises. Conservative policies are better for the least advantaged, giving them pathways to greater advantage, while liberal policies too often take from the least advantaged to give to the politically well-placed while taking away those pathways.

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