Worstall

Anti-Minimum Wage Blogger Accidentally Makes the Case for Economic Inclusion

This doesn't happen when you raise the minimum wage.

This doesn’t happen when you raise the minimum wage.

This morning, Tim Worstall wrote a post about Civic Ventures founder Nick Hanauer. It’s not much of a post, really: Worstall just attacks Hanauer’s most recent article for PBS Newshour by block-quoting it and then block-quoting a column Worstall himself wrote back in May. (As we all know, there’s nothing in all of blogdom that’s more thrilling than a battle of the block quotes.)

Anyway, to summarize Worstall’s many paragraphs of quoted text: he’s arguing that a National Employment Law Project (NELP) study Hanauer quoted in his article only looks at the total number of Americans employed, not at the granular levels of unemployment among smaller portions of the population. If you’ll permit me a single block quote from Worstall’s post, I think this gets to the crux of his argument:

A place that more than doubles its population is going to have more jobs at the end of the process than at the beginning. This proves absolutely nothing at all about the minimum wage.

Hmmmmm. Okay. I’d argue that what the NELP article does most effectively is it disproves the claims that the apocalypse will unfold if the minimum wage is raised—the restaurant owners who say they’ll never open another restaurant in their “beloved Seattle” if the minimum wage goes up, say, or the newspaper editorial boards that promise nobody will ever open another hotel near an airport if a higher minimum wage is adopted there. Never—not once since the adoption of the federal minimum wage—has that kind of apocalyptic scenario happened in America.

The NELP report is a call for reasonable discourse when it comes to the minimum wage—a plea for business owners to stop threatening their employees with rampant layoffs if the wage goes up, and a demand that newspaper editorial boards address the topic with a more level head. The minimum wage does not cause an outsize drop in employment numbers. Doesn’t happen. The polling successes of wage increases indicates that the American people agree: we need a more rational discussion about what the minimum wage can and can’t do. Stop with the fear-mongering.

Of course, people like Tim Worstall love the fear-mongering because it doesn’t facilitate discussion. If the top one percent can just blithely threaten the lowest earners in a society with unemployment, that works out much better for the top one percent. But when NELP comes along and indicates that unemployment doesn’t skyrocket when wages increase, that removes one of their most successful arguments.

I do want to point out, though, that what Worstall says in the block quote above is central to the idea of middle-out economics. When more people are involved in an economy, that economy thrives. Add more workers to an economy—workers who spend money as empowered consumers—and you’ll get more jobs. America is exponentially more prosperous now than it was in the times of slavery, say, or when women were largely removed from the workforce. When we allow more immigrants and refugees to take part in the economy, and when we encourage the full participation of LGBTQ citizens, the economy does better. That’s because the top one percent are not the true job creators in this economy—you are. And I am. We all are.

The best way to grow the economy is to ensure that more people are fully engaged as consumers. They buy more goods and services, which increases demand, which means employers have to hire more employees to keep up with that spending. NELP’s study is a major step toward this new and exciting understanding of economics. I’m glad to see Worstall staggering toward embracing a more inclusive economics. Maybe one day he’ll accidentally block quote his way to enlightenment.

If You Think the New Overtime Rule Is “Entirely Trivial,” You Really Should Get Out More

Screen Shot 2016-05-18 at 4.29.58 PM

Our old “friendTim Worstall is back at it on his occasionally almost nearly coherent Forbes blog. This time, he’s talking about the increased overtime threshold. As you may have expected, he thinks paying more overtime is a bad idea. Here Tim is being, if nothing else, consistent; he thinks a minimum wage is a bad idea, after all, so why wouldn’t he be against a policy like overtime that benefits workers?

But the truth about overtime is that Tim just doesn’t care all that much. No, really. He calls the new threshold “entirely trivial.” That’s a direct quote. In fact, he uses the word “trivial” twice to describe the effects of overtime and then he says he’s not even sure the White House estimates of what the overtime raise will pay out—”$1.2 billion a year over the next decade”—are worthy of the word “trivial,” they’re so insignificant. He concludes:

Probably the correct way to think of this is as a nice piece of politics that everyone can have a good shout about rather than a piece of useful economics. Everyone gets to show where they stand with a lot of heat and not much light. Or, of course, that very small tempest in a not very large teapot.

Wow. Tim, here, is a classic example of what happens when someone argues politics on the internet for too long. Everything becomes academic. When you call a policy that will directly improve the lives of 12 and a half million Americans “a nice piece of politics,” you’ve passed a very significant point. When you have your head in the conservative economics bubble for years at a time, apparently, you forget that you’re arguing about real human beings with real lives and you start to think of it as points on a scorecard.

Sure, maybe to our buddy Tim 1.2 billion dollars a year is nothing. But to a retail manager who’s trying to raise two kids on her $470-a-week salary, this threshold means a hell of a lot. It stands for security. With the new overtime rules, our manager will enjoy one of three outcomes: either her boss will keep asking her to work overtime at time-and-a-half so she’ll make more money per paycheck; or her boss will ask her to work only 40 hours per week, giving her the time to look for a second job, start her own business, or spend more time with her children; or her boss will give her a raise above the $47,476 annual threshold and ask her to keep working the same long hours at a much higher rate of pay. Any one of those possibilities results in a better outcome for our retail manager. Now multiply her experience by 12.5 million and spread those people around the country and you start to get a sense of how huge the idea of restoring the overtime threshold really will be for Americans.

How is this not “useful economics,” Tim? My God, what else is economics for, if not broadly improving the lives of more people? Maybe a blogger for Forbes might think of economics as something you blab about on the sidelines while things happen in the real world, but most of us out here understand that economics is about making a difference for everyone. That’s why we’re winning across the country on the $15 minimum wage and overtime while you keep pontificating about how many digits a number can have before it becomes worthy of your attention.

But you know what? Enjoy your dumb little bubble, Tim. You can keep talking on your blog about how 1.2 billion dollars is basically nothing, and how a real economist wouldn’t even bother with that kind of pocket change. In the meantime, real Americans will be earning more money, getting more of their own time back, and enjoying some of the security that Americans used to enjoy. To me, that sounds like the exact opposite of “trivial,” but I guess we can’t all have the high-minded  macro-vision of a Forbes blogger, now can we? And if you keep ceding topics like overtime as unworthy of your haughty attentions, that means progressives can keep winning the battles that matter to real human beings out here in the real world. So by all means, keep wallowing in your ignorance, Tim. It makes things easier for us.

People Are Not Bananas (Except for Tim Worstall)

Banana

As a proud “Fellow at the Adam Smith Institute in London,” you’d think the one thing Forbes blogger Tim Worstall might have a firm grasp of is, well, Adam Smith. But you wouldn’t know it from Tim’s nuance-free depiction of the labor market:

This is very basic economic stuff: If we have a surplus of something then that means that the price is above the market clearing price. This is true of bananas and it’s also true of labor. The answer to getting all the bananas sold is to lower the price. The answer to getting all the people who want to offer labor employed is to lower the price of that labor.

Oy. If by “very basic” Tim means “simplistic to the point of absurdity,” then sure.

The most obvious problem with Tim’s labor/bananas analogy is that people are not bananas. For example, if the demand for bananas far outstrips supply, people can always choose to eat apples or oranges or any number of other fruits. Because markets! But regardless of the state of the labor market, people still need to eat. And as Smith explains in The Wealth of Nations, this fundamental human condition — eat or die — is just one of the factors that inherently distorts the labor market decisively to the advantage of employers:

What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.

It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. … In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.

According to Tim, the most efficient (and broadly beneficial) market is one in which prices are set purely through the unadulterated interplay between supply and demand. But even if true, that’s not the way unregulated labor markets have ever functioned. For as Smith explains, wages are set by contract. They are negotiated. And particularly at the low end of the scale, employers enjoy a distinct negotiating advantage.

And as a result, wages are also influenced by bias — the natural bias of employers to keep their labor costs low. As Smith bluntly put it:

[W]hoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things, which nobody ever hears of.

Perhaps there’s no clearer real-world example of this “natural state of things” than our nation’s perennial shortage of truck drivers. After a brief collapse during the Great Recession, the shortage of truck drivers quickly reemerged, climbing from 38,000 in 2014 to 48,000 in 2015. According to the latest research from American Trucking Associations, the shortage could balloon to 175,000 by 2024. Trucking companies routinely turn away business.

Given the critical role of trucking in our economy (69 percent of all freight tonnage moves by road), Worstallian Economics predicts that industry wages will gradually rise until the supply of truckers matches demand, and the market clears. Yet as Neil Irwin observed in the New York Times, the industry’s bias against raising wages has prevented the market from doing its magic:

[T]he idea that there is a huge shortage of truck drivers flies in the face of a jobless rate of more than 6 percent, not to mention Economics 101. The most basic of economic theories would suggest that when supply isn’t enough to meet demand, it’s because the price — in this case, truckers’ wages — is too low. Raise wages, and an ample supply of workers should follow.

But corporate America has become so parsimonious about paying workers outside the executive suite that meaningful wage increases may seem an unacceptable affront. In this environment, it may be easier to say “There is a shortage of skilled workers” than “We aren’t paying our workers enough,” even if, in economic terms, those come down to the same thing.

By 2014, adjusted for inflation, truckers were earning 6 percent less, on average, than they did a decade before. And yet trucking executives would rather leave business on the table than raise pay to attract more truckers. “It takes a peculiar form of logic to cut pay steadily and then be shocked that fewer people want to do the job,” observes Irwin.

Obviously, wages in the trucking industry aren’t immune to the tugs of supply and demand. But they sure as hell aren’t dictated by them.

And its not just the trucking industry. As the housing market recovers, the construction industry has faced a looming worker shortage of its own, even against the backdrop of persistent unemployment. And here in Washington State, produce is left rotting in the fields for want of enough farmworkers at harvest time. Pay them and they will come, Econ 101 teaches. But in industry after industry, the masters of capital simply refuse.

Minimum wage opponents like Worstall insist that the market determines the value of labor. And yet the wage-suppressing evidence of extra-market forces are all around us. Walk into a Sam’s Club and observe cashiers doing the exact same job for $5 an hour less than cashiers at the Costco down the street. The market didn’t set those prices; employers did. Or, look at the history of manufacturing in America, which didn’t broadly generate middle-class wages until collective bargaining forced it to. Supply and demand didn’t build the Great American Middle Class; unions did.

Or, look around your own workplace. You’ll likely find similar people with similar skill sets performing similar jobs but for different wages. Sometimes dramatically different wages. The invisible hand of the market? No. Some people are simply better at negotiating their own wage than others.

So enough of this bullshit about wage floors distorting the natural efficiencies of the market. You can’t distort something that doesn’t exist.

What Happens in California Stays in California; Why $15 Will Boost Employment Statewide

A promotional image from Sony Picture's 2012, which imagined the total devastation California might suffer from a $15 minimum wage.

A promotional image from Sony Picture’s 2012, which imagined the total devastation California might suffer from a $15 minimum wage.

Experienced bloggers know that if you provide a block quote, few readers will click through the cited link — a rule of thumb that less scrupulous bloggers sometimes exploit to devious effect.

For example, take this recent post from Forbes economic blogger Tim Worstall: “California’s $15 Minimum Wage Deal Will Cause Unemployment–And We Have Proof Of This.” Worstall’s claim (as always!) is that a $15 minimum wage will cost many low-wage workers their jobs. Only this time, he kvells, he’s got a lefty economist to back him up:

And we actually do have proof of this: a report about what a $15 minimum wage will do to employment in Los Angeles City. This is not, by the way, a report by some from market fundamentalist like myself. This is from Michael Reich et al at Berkeley, stout supporters of a rise to $15. And yet even their report states that the net effect will be fewer jobs.

Go ahead. Click through the link above and read this Worstall quote in its full context. The “proof” mentioned in Worstall’s headline, that $15 “will cause unemployment,” is a cited study by Berkeley economist Michael Reich. That is the main thesis of Worstall’s post. There is absolutely nothing misleading or unscrupulous about my block quote.

Alas, the same can’t be said for Worstall’s out-of-context quoting of Professor Reich:

Los Angeles City: Combining costs and benefits and taking into account multiplier effects,we estimate a cumulative net reduction in GDP of $135 million by 2017 and $315 million by 2019, or 0.1 percent compared to a scenario with no city minimum wage increase.

These effects on the level of economic activity correspond to a cumulative net reduction in employment in Los Angeles City of 1,552 jobs by 2017 and 3,472 jobs by 2019, or 0.1 and 0.2 percent of all employment, respectively.

Yes, according to Reich’s model, it is true that a $15 minimum wage hike — in the City of Los Angeles — would result in less growth and fewer jobs — in the City of Los Angeles — than there might have otherwise been had the city not raised its minimum wage. But if you click through the provided link and read the Reich quote within its full context (as Worstall presumed you wouldn’t), you’d come to a very different conclusion about the State of California as a whole:

  • The costs of the proposed minimum wage law will be concentrated in Los Angeles City, but the full benefits will be realized throughout Los Angeles County, because more than half of the affected workers live, and therefore spend most of their increased earnings, outside the city.
    1. Los Angeles City: Combining costs and benefits and taking into account multiplier effects, we estimate a cumulative net reduction in GDP of $135 million by 2017 and $315 million by 2019, or 0.1 percent compared to a scenario with no city minimum wage increase.
      These effects on the level of economic activity correspond to a cumulative net reduction in employment in Los Angeles City of 1,552 jobs by 2017 and 3,472 jobs by 2019, or 0.1 and 0.2 percent of all employment, respectively. These employment changes are quite small when compared to projected job growth of 2.5 percent a year in the city.
    2. Los Angeles County: Combining costs and benefits and taking into account multiplier effects, we estimate a cumulative net increase in employment of 3,666 jobs by 2017 and 5,262 jobs by 2019 at the county level.

That’s actually a net increase of jobs throughout Los Angeles County that more than offsets the tiny projected loss within the city proper!

What Reich is describing above is a kind of economic “leakage,” in which the costs of higher wages are borne entirely within the city while the benefits are shared countywide. This is especially pronounced due to Los Angeles’ relatively high concentration of low-wage jobs. The smaller and more local the minimum wage jurisdiction, the greater the potential leakage effect might be.

But California as a whole is a virtual economic island with none of its job centers a reasonable commute from state borders; almost every minimum-wager who works in California lives in California. There would be little if any economic leakage from a statewide $15 minimum wage. Indeed, as Reich explains: “Just as minimum wage increases in Los Angeles will benefit surrounding areas, higher minimum wage levels in those areas would also boost economic activity within the city, allowing Los Angeles to realize its full share of the benefits of a minimum wage increase.”

What Worstall has done is cleverly deceptive: he selectively quotes a study on Los Angeles as “proof” that $15 “will cause unemployment” statewide. But Reich’s model actually suggests the opposite: a statewide $15 minimum wage would provide an economic boost to Los Angeles proper and to California as a whole.

Their Job Losses Are Hypothetical; Our Minimum Wage Gains Are Real

Jobless men keep going

I can’t actually bring myself to read all the way through Tim Worstall’s latest word jumble at Forbes, because I already have a slight headache, and Jesus, folks, it’s Friday afternoon, so gimme a break. But I would like to comment briefly on his disclaimer at the top:

Before we go any further, as with other minimum wage rises that have been discussed here, no, I am not claiming that the rise is about to destroy the economy of that fair state, nor that all that will be left is a howling wasteland as the unemployed desperately search for scraps. I also agree entirely that the macroeconomic issues of what happens to the whole national economy are going to have far more to do with the employment and unemployment rates in Oregon than this change to the minimum wage will bring about.

… The claim is this and only this: That a higher minimum wage will lead to fewer jobs than the absence of that higher minimum wage would have led to.

Good on Tim for being up front about what he is claiming; not all trickle-downers are so forthright. But let’s be clear about what the core neoclassical claim is: it’s not that raising the minimum wage will destroy existing jobs, but rather that it will lead to fewer jobs in the future than there otherwise might have been.

In other words, it is a claim that, no matter the empirical evidence, has the inherent advantage of being impossible to ever disprove!

How convenient.

Of course, the neoclassical models back Tim up. Run the models, and they’ll always project at least some theoretical job losses (in the future!) associated with minimum wage hikes large and small — despite the fact that the actual data from hundreds of local, state, and federal minimum wage hikes over the past 75 years show zero correlation between the minimum wage and jobs.

No, I can’t actually prove that there wouldn’t have been more jobs created (in the future!) had the minimum wage not been raised, because it’s entirely impossible to prove or disprove. It’s an alternate history. But what I can prove (and even Tim apparently agrees with this) is that a minimum wage hike has never destroyed the economy in the past.

Oh, also: that it always results in higher wages!

To be clear: Tim’s job losses are hypothetical. But our wage gains are real.

But even if Tim is right that a modest hike in the minimum wage would almost certainly lead to fewer jobs (in the future!) — and I’m not saying that he is — that still may be a tradeoff that’s well worth making. This isn’t a video game. The purpose of economics isn’t to score the highest GDP or the lowest unemployment rate. The purpose of economics is to broadly improve the lives of actual people. I’m more than willing to admit that there is a limit to how high we can reasonably raise the minimum wage — that there is a point beyond which the risk of theoretical job losses exceeds the benefits of actual wage gains.

If trickle-downers like Tim can likewise admit that there’s a point where the benefits of raising the minimum wage exceed the theoretical costs, perhaps we can have a rational and productive policy debate about how high the minimum wage should actually be.

No, Flint’s Water Crisis Does Not Prove We Should Privatize Clean Drinking Water

If you knew that one of these three bottles of water wasn't subject to government regulation, would you drink from any of them? (Image courtesy of nenetus at FreeDigitalPhotos.net.)

If you knew that one of these three bottles of water wasn’t subject to government regulation, would you drink from any of them? (Image courtesy of nenetus at FreeDigitalPhotos.net.)

Everyone agrees that the poisoned drinking water of Flint, Michigan represents a disastrous failure on the part of local government. After all, clean drinking water is the most essential ingredient for a functioning society—if you can’t get clean water, everything else collapses. This is why pretty much everyone agrees that clean water is a public good, that it’s the government’s responsibility to provide clean drinking water to its citizens.

Note that I said “pretty much” everyone agrees that clean drinking water is a public good? I had to make that distinction because conservative economists exist. And to conservative economists, basically any so-called “government intervention”—yes, including clean drinking water—is evil. And so our old friend Tim Worstall begins to quibble for Forbes

[A public good] is not something which is good for the public (which clean drinking water definitely is) nor a good that should be supplied to the public (which clean water definitively is). A public good is something that is non-rivalrous and non-excludable. That is, if I’m able to enjoy a supply of something that doesn’t diminish the amount of that same thing that someone else is able to enjoy or consume. And secondly, that there’s no real way to exclude people from being able to enjoy that. Obviously, neither of these are true about the supply of lead free drinking water. Don’t pay your water bills and you’ll quickly find out how quickly your supply can be excluded, and my drinking the water really does mean that you don’t have access to that particular portion of water: not until it’s been back through the treatment plant at least.

Interesting that Worstall bases his complaint on a semantic argument, and interesting that Worstall knows he’s fighting an unpopular battle. He continues:

It probably is true that the absence of pandemic disease through the existence of a decent sanitation system is a public good. But drinking water is not, not by the economists’ definition.

So Worstall is trying mightily to split hairs, here. The water is not a public good, he argues; the fact that the water is clean is a public good. Why does he care about this issue?

If something is a public good then it’s very difficult to make a profit from it. This means that private markets will undersupply it, or at least potentially will. So, intervention to get the amount we think would be societally useful is often a good idea. Please do note that I’m not banging an ideological drum here; this just is the simple economics of the matter. People often say that vaccination is a public good; it isn’t. It’s the end result of a successful vaccination program that is, the herd immunity.

Please note that while Tim Worstall promises that he’s not banging an ideological drum, people in Flint are literally dying from tainted water. He later even tries to clarify that “All of this is not a discussion of the state of the water supply in Flint, Michigan.” Except he wouldn’t be trying to launch this “discussion” if the disaster in Flint hadn’t happened. It’s almost like Worstall’s basic humanity tried (and failed) to intercede with the writing of this blog post; ultimately, as is always the case with Worstall and moral crises, the conservative in him won out.

Read this mincing paragraph and tell me Worstall doesn’t know he’s trying to spin a sweater out of a mound of bullshit:

Please don’t get me wrong here: the provision of clean drinking water is at the heart of civilization itself, and I don’t think anyone should be deprived of it because of poverty, political manipulation nor even bureaucratic incompetence… However, it is not a public good and thus the argument that government must spend more upon it does not apply, nor do any of the other public goods arguments.

So he thinks that water is necessary and should be provided to everyone regardless of their financial status, but he also thinks that it shouldn’t be supplied by the government? Let’s for a moment pretend that Tim Worstall is a real economist. And let’s take his premise seriously: say private business is in charge of all the water supplies in America, with maybe a very small government regulation office in charge of keeping them honest. How long do we wait until someone like Stewart Parnell knowingly endangers his customers by providing tainted product? Or until someone knowingly cheats the regulation system, like Volkwagen? Or until some company repeatedly fails at its attempts to provide a clean product, like Chipotle? Or until someone prices the product out of the hands of the poor, like Martin Shkreli?

We’re big fans of capitalism here at Civic Ventures. But after witnessing the kind of failures we’ve seen in recent years, you’d have to be outright dumb to argue that capitalism is the solution for everything. Government has its place, and one of those primary duties should be to protect and preserve the cornerstones of civilization. If you choose to let the market decide on the profitability of your safety, you’re making a bad bet.

Does automation kill jobs? Forbes says Yes! And No! (But shhhh, don’t tell minimum wage workers, really, no.)

Forbes blogger Tim Worstall is of two minds on automation.

Forbes blogger Tim Worstall is of two minds on automation.

Forbes blogger Tim Worstall sure does love himself a vigorous debate—so much so that he’s taken to arguing with himself on the job destroying/creating impact of automation.

When it comes to raising wages (minimum or otherwise) the dystopian Worstall repeatedly warns that if you raise the cost of labor, employers are going to respond with automation, leading to painful job losses for the very same low-wage workers the minimum wage is trying to help. Seems straightforward enough. Yet at the same time, the utopian Worstall consistently shrugs off automation-related job losses as all part of the healthy process of creative destruction.

Dystopian Worstall:

Higher wages means that automation becomes, relatively, more profitable. And it is to automation that most jobs go to die, not trade or international competition.

Utopian Worstall:

We’ve coped with this sort of thing before. There’s no reason at all to think that it’s going to be different this time. The increasing computerisation, roboticisation, of the economy is no more than a slight uptick in the normal rate of job destruction.

Dystopian Worstall:

So, their first change is going to be looking at greater automation. This raises the productivity of the labor that they do employ, which is great. But it also means that for any given level of output they will be employing less labor: That’s what automation and higher productivity both mean. So, job losses coming here.

Utopian Worstall:

What happens when the robots get good enough to come and steal all our jobs? There’s various possible responses to this, from screaming in fright and running from the room in Luddite panic all the way through to denying, flat out, that it can possibly ever happen. I’m in that second camp myself.

Dystopian Worstall:

Raise the price of human labour and people will substitute away from it to using more capital and more machinery. Things formerly done by people will be done by machines. That is, raising the minimum wage does cause job losses.

Utopian Worstall:

[T]his is how the macroeconomy works. Technology destroys the jobs that it automates. This then frees up that labour to go off and satisfy some other human need or desire. And as long as we don’t run out of those, then there’s no problem, is there?

Confused? You shouldn’t be. The truth is, Worstall is perfectly consistent when it comes to the economic impact of automation: Labor-saving technology tends to displace individual workers (that’s kinda inherent in the very notion of saving labor), something even the utopian Worstall never fails to concede. But Worstall is also fully aware that at the macroeconomic level, automation tends to drive job creation at a pace that more than offsets the jobs it costs. He just never mentions that part when he warns against raising wages.

So it’s not that Worstall is schizophrenic or inconsistent or incoherent on the issue. (Okay, maybe a tad incoherent.) It’s that he’s disingenuous. He’s threatening low-wage workers with only half the automation story, while saving the job-creating good news for conversations that don’t involve the minimum wage.

Skunkworks Stinker of the Day: Forbes’ Tim Worstall

Tim Worstall, bloggerThe only way Forbes blogger Tim Worstall seems to know how to win an argument is to argue with himself:

[T]he basic argument of a minimum wage, any level of minimum wage, is that there’s some moral right to a certain income from providing one’s labour.

Except, that’s not the basic argument in favor of a minimum wage—at least, not the argument that has been winning the minimum wage debate in Seattle, San Francisco, Los Angeles, New York and throughout the nation. No, our basic argument is that raising the minimum wage is good for the economy: that it increases consumer demand, increases worker productivity, and increases economic growth.

Sure, minimum wage workers may be making a moral argument in demanding a living wage—as they should—but Worstall and his free market cohort are sticking their heads in the sand if they believe that it’s the moral argument that’s been winning the day. There’s always been a moral argument to make in support of a living wage. What’s new is the powerful middle-out economic argument that comes from a more modern understanding of how a capitalist economy really works.

As for Worstall’s professed concern for working people, absolutely, he has my support for exempting the employee share of FICA on the first $15,000 or so of income—as long as their Social Security account gets credited for the exempt amount, and the revenue is replaced from somewhere else (say, by lifting the income cap). But this proposed reform and the minimum wage have nothing to do with each other.