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Minimum wages and the poor

Professor Bainbridge mentions two posts on economics worth reading. They would appear to be on separate issues, but there is link between them.

First, Eric Rasmussen provides a very useful addition to the minimum wage discussion triggered by Steve Landsburg's column in Slate. I side with Rasmussen in dissenting from Landsburg's claim that it's "almost impossible to maintain the old argument that minimum wages are bad for minimum-wage workers." Card and Krueger's research did not change the minds of all labor economists on this issue. It prompted a spirited debate, as suggested by the papers in the July 1995 Symposium of the Industrial and Labor Relations Review. Finis Welch - no midget in the world of labor economics - offers a very sharp criticism of the Card and Krueger paper in that Symposium.

Second, he points to Arnold Kling's column at Tech Central Station. Kling provides a compelling, "just the facts ma'am" account of economic progress in the nation, and particularly among the poor. If you are not aware of these facts, you should be. Here's a taste:

Item Percent Lacking: 1970 Percent Lacking Now
Telephone 13.00% 2.40%
Complete plumbing 6.90% 0.60%
Refrigerator 17% 0.10%
Stove 13% 0.30%
Color television 66.00% 1.10%
Vehicle 20.40% 10.30%

Economic progress has been very good to America's poor. See Kling's column for more facts and insightful commentary, but let me add this small point. I would venture to say that increases in the minimum wage have done nothing to contribute to these figures. They merely put sand in the gears of a dynamic economy which, despite the meddling, creates these riches.

And by the way, like Professor Bainbridge, I was once the owner of a pitiful - by today's standards - Ford Pinto. Life is good, even for those who once drove Pintos.