The minimum wages of sin

Shorter David Brooks, "The Inequality Problem", New York Times, January 17, 2014:

True, economic inequality is a problem in America, but it's not an economic problem. That's because the excess money that the very rich have is not the same money as the money the very poor don't have. You just don't understand this because of your primitive zero-sum mentality.

To Hell with Poverty. Image from Dazzleship Potemkin.

I love it when Brooks writes about economics because he always makes me feel I know a lot about the subject, even though in fact I know almost as little as he does. But these amateur blogsmiths, Tin Pundit, have one thing you haven't got: a willingness to stay on that yellow brick road from antecedent to consequent or, as it is often called, a primitive logical mentality.

Just a couple of points in today's column:

If you think the problem is “income inequality,” then the natural response is to increase incomes at the bottom, by raising the minimum wage.

That's part of it. The major response is to decrease incomes at the top by a more progressive tax regime, and distribute that money to where it will do some good. This is mentioned nowhere in the column, and not just because tax increases were taken off Senator Reid's table a long time ago: Brooks is building a little strawman here. It's easy to argue against the view that a minimum wage hike will solve all of our inequality problems because it obviously won't.

The evidence he cites to show that a minimum wage hike helps only a very small number of individuals is pure hokum, however: it affects many workers beyond those who are actually earning the minimum wage by pushing up everybody's earnings at the low end of the scale and by encouraging consumption, which creates more low-end jobs; and it even saves government spending on SNAP benefits and EITC.

the income inequality frame contributes to our tendency to simplify complex cultural, social, behavioral and economic problems into strictly economic problems.

You know what's coming here, right: poor people selfishly refusing to get married and thus condemning their children to single parenthood, which is well known to be the cause of crappy jobs that don't pay enough to allow a guy to get married. You solve the problem by blaming its victims for their immorality, and by—wait for it—simplifying and economizing the problems still further!!!

Democrats often see low wages as both a human capital problem and a problem caused by unequal economic power. Republicans are more likely to see them just as a human capital problem. If we’re going to pass bipartisan legislation, we’re going to have to start with the human capital piece, where there is some agreement, not the class conflict piece, where there is none....

If we’re going to mobilize a policy revolution, we should focus on the real concrete issues: bad schools, no jobs for young men, broken families, neighborhoods without mediating institutions.

Uh, sure, on that last point. But you're going to have to appropriate some money to do that. In the meantime, since you can't summon up any actual arguments against raising the minimum wage, let's go ahead.

Also, some really great Dean Baker. And sublime Driftglass.