From left to right: Russ Roberts, James Dorn, my Main Moderator John Donvan, Jared Bernstein, and Karen Kornbluth.
Should We Abolish the Minimum Wage is the most recent Intelligence Squared U.S. debate. James Dorn and Russ Roberts argued “No!”, Jared Bernstein and Karen Kornbluth argued “Yes!”, and both of them argued it just like that — capitalized and with an exclamation point — and I mean that as a compliment.
Here is my immediate post-debate reaction:
1. At no point in this debate did I hear anything about the earned income tax credit (EITC), and that is more James’ and Russ’ fault than Jared’s or Karen’s. The EITC, which is basically a negative income tax for the lowest-wage workers, accomplishes the exact same goal as the minimum wage without imposing the downside risk. The EITC does have some costs, but those are because it costs other (higher-wage) workers via the tax code, and some economists would argue that the minimum wage and EITC are complements rather than substitutes, but still — it wasn’t even mentioned.
2. Jared in particular made the same kind of anti-Rawlsian arguments I’ve seen from other minimum wage supporters. He repeatedly conceded that the minimum wage law might render some low-wage workers unemployable, but he nonetheless argued, quite explicitly, that making a large number of low-wage workers slightly better-off is more important than not rendering a smaller number of workers unemployable.
3. I did not like the impassioned rhetoric about the poor. Both sides were quite obviously arguing purely on the basis of the best interests of the poorest workers, and nothing else. Russ and Karen in particular employed that rhetoric a little dishonestly, because they seemed to conflate “minimum workers not rendered unemployable” with “all workers affected by the minimum wage,” whereas Russ’ impassioned rhetoric was clearly only about those workers rendered unemployable, recognizing that some other workers are made better-off by the minimum wage.
4. It is very important to distinguish “don’t abolish the minimum wage” from “do raise the minimum wage.” Those are two very separate issues. The simple reason, as Russ, James, and others have argued, is that the minimum wage is currently just barely above the equilibrium wage, so there is a sort of Lucas critique at work here — just because the minimum wage creates little or no unemployment today, does not mean that it wouldn’t create unemployment if it were made larger. Now that might seem sort of obvious, but I see a lot of proponents of the minimum wage conflating the two ideas repeatedly — they jump from “studies show that the minimum wage has little or no effect on unemployment” to “the minimum wage should be $9.” One audience member asked about this towards the end of the debate, and it’s crucially important, but he did not get any answer, perhaps because it wasn’t totally relevant to the proposition, which was only about abolishment.
5. Russ’ rhetoric was much more persuasive than James’. Maybe that’s because Russ has spent so much time speaking in public with people who disagree with him, namely on EconTalk. But for whatever reason, Russ seemed like he had a much sharper sense of what rhetoric would or would not be persuasive to people who are politically to the left of the Cato Institute (where James Dorn works). That is not to say that James’ logic was bad, just that his arguments were couched in such obviously libertarian terms that they were not as convincing to left-of-Cato listeners as he and Russ needed to win this debate.
6. At one point point Jared Bernstein mentioned “sophisticated quasi-experimental” study designs, at which point James (I think) mentioned this paper by Neumark, Salas, and Wascher debunking such designs. Did anyone actually learn anything from that exchange, or did it just obfuscate the issue with what audience members must have concluded were either “Fancy Maths” or “Bogus Maths”?
Overall this was one of the less enjoyable IQ2 debates I’ve listened to lately, and not because “my side” lost. (Note that I am not a libertarian, nor an -arian or -ist or of any kind, just a census-designated person). It’s just that it felt very… superficial.
Maybe it’s because economics is my trained profession, but I do think Paul Krugman is onto something when he says that in-person debates about complex economic issues are sort of useless. I’m even tempted to say that such debates are counter-productive. See #6 above for example — I think it’s safe to say that (nearly?) every single audience member walked away from that exchange feeling either a) more confident in a good idea for the wrong reasons (at best), or b) more confident in a bad idea (at worst), which might actually be worse than having heard nothing.
See here for a debate I did enjoy, even though my side lost. (Though for all I know there is some anthropologist or women’s studies professor out there who thinks that debate was very superficial.)