When President Obama proposed an increase in the federal minimum wage last month, you could almost hear conservative economists and pundits smacking their lips in anticipation. After all, there’s nothing that gets this crowd going like mandating a wage increase, even if it’s from the downright Dickensian $7.25 currently required to a still paltry $9, or just under $19,000 a year.
Minimum wage foes almost always base their opposition on the supposed damage that these laws do to the businesses that have to pay them and the workers who receive them. Despite reams of research to the contrary, they persist in claiming that minimum wage increases force businesses to lay off workers, hurting the very people who should benefit.
There is another argument, however, against minimum wage laws, one that was trotted out in a column by Slate’s Matt Yglesias. The real problem with these laws is not that they hurt workers and their employers, asserts Yglesias, but that they infringe on our basic freedoms.
“You’ve got a guy who wants to give someone $8 to do something that’ll take an hour and another guy who wants $8 and is happy to do the thing in exchange for the money,” writes Yglesias. “Now Barack Obama’s going to fine them for agreeing to trade $8 for the work? Seems perverse.”
Perhaps unwittingly, Yglesias in these seemingly innocuous three sentences has called into question the very basis of legally mandated protections for workers, not to mention consumers, minorities and almost every other group you might care to mention. It’s the hackneyed “freedom to contract” argument — or, as conservatives call it, “the right to work” — so often used against unions. In other words, you have the right to suffer the indignity of taking whatever job the recessionary economy will throw your way.
A critical purpose of labor law is to address the unequal bargaining power between workers and their employers by, among other things, setting minimum standards for wages, safety and other terms and conditions of employment. For most of human history, working conditions were left to the discretion of those in power. The “freedom to contract” system that enshrined the right of employers to exploit, and workers to be exploited, was quite popular with the former. It wasn’t as big a hit with the masses, however, who struggled to enjoy their putative freedom while living in wretched poverty, and not infrequently dying in horrific workplace accidents like the Triangle Shirtwaist Fire. One need only re-read Steinbeck’s “The Grapes of Wrath” to be reminded of the illusory nature of such freedom.
Minimum wage legislation was first enacted at the state level in the early 20th Century, but these statutes were overturned by a U.S. Supreme Court infatuated with the rights of business to freely negotiate wages. In 1933 the first federal minimum wage was established, but it was declared unconstitutional by the High Court, and another five years passed until a meager wage floor of 25 cents an hour was finally the law of the land.
In the ensuing decades, the only notable mass protests involving the minimum wage have been by those trying to raise it. While conservative economists and politicians have railed against the minimum wage, an abolitionist movement has yet to materialize among the tens of millions of Americans who have happily traded in their freedom for a little economic security. Nor have we seen demonstrations by workers clamoring to be rid of regulations that protect their health and safety.
If the freedom of individuals — to exploit, to injure and kill, to encite — were allowed to trump all other rights, it would be a frightening world indeed. Just read a history book if you don’t believe me.
Julie Gutman Dickinson is a partner at the union-side law firm Bush, Gottlieb, Singer, Lopez, Kohanski, Adelstein and Dickinson, and was a former NLRB trial attorney and Senior Labor Advisor to Los Angeles Mayor Antonio Villaraigosa.
Photo by thirteen of clubs under Creative Commons license




25 Comments

It appears that Mr. Justice Rufus Peckham, who wrote the majority opinion in Lochner v. New York, has been reincarnated as Matt Yglesias.
Very nice diary! Rec’d
When I took economics many years ago, we were informed that labor is merely a commodity subject to supply and demand the same as a barrel of oil, a ton of coal or a bushel of wheat. This is essentially correct. It explains why a digger of coal is paid less than a .300 hitter in baseball.
Diggers are plentiful while those that can hit the fastball 3 times out of 10 are scarce. Plentiful or scarce, coal or diamonds suffer no harn from simply being left in the ground. That cannot be said for human beings.
It is a fundamental fallicy to suggest that human beings are no different than a ton of coal or a bushel of wheat. While it may function as an economic model it fails in the arena of basic human values. We cannot justify treating human beings as mere objects for exploitation and call ourselves civilized.
“You’ve got a guy who wants to give a 10-year-old $2 to do something that’ll take an hour and another 10-year-old who wants $2 and is happy to do the thing in exchange for the money,” writes Ygregious. “Now Barack Obama’s going to fine them for agreeing to trade $2 for the work? Seems perverse.”
Hey, can you put me in touch with that 10 year old. My chimney needs cleaning out.
Little Matty is a very bright kid. He had promise. I had hopes. For a while there when he switched from a broad range of interests (driven by his philosophy studies) in his writing to a focus on econ, it looked like he might eventually become a Krugman or Dean Baker in training.
Looks like he has gone over to the dark side, though, in his quest for major media stardom. I doubt he’ll surpass McMegan (Jane Galt) as a whore for the Koch/Peterson tidal wave, but he’s trying to get to the right of Ezra.
He knows exactly what he’s saying, and what it implies.
Just one more sign that the wicked witch of the East (Queen Ayn) still rules our media.
Some idiots try to use the “free market” argument against the minimum wage, but that is flawed. When workers are paid less than subsistence, they then rely on public assistance to survive. That amounts to a government subsidy for the greedy employer.
Yglesias = run-of-the mill, modern liberal dick.
Thank you. Rec’d.
Money is a powerful weapon when you have no morals. Obviously, Yglesias really never had any to begin with. Morals,that is.I’m sure he now has plenty of money.Capital D dickhead.
Brilliant. You got it out before I could.
Returning us to the pre-Lochner era has been the goal of the right wing since the day it was handed down.
Not that Iglesias is a raging progressive, but why is he carrying water for these criminals? You don’t have to pay your lawn kid according to the FLSA. How utterly dishonest
Calling out Matt Yglesias is a great hobby. He’s a fantastic personification of how what’s wrong with this country is the Dem pundit/politico/DC class.
The whole concept of free market is based on “fair market value”. Fair Market Value requires a willing buyer and a willing seller neither of whom is subject to coercive forces.
I think that being hungry, having a hungry child, being homeless or being threatened with being homeless are all coercive forces that interfere with bargaining for fair market value.
For guys like Yglesias — and there are way way too many of them in the “creative class” (see Chris Bower) that make up the backbone of the Obama support — life is nothing but an endless upper division seminar in which they can bat around abstractions. Obama is exactly their guy because he too intellectualizes within a vacuum.
Nothing would serve them (and us) better than for them to have to live for a year on the minimum wage.
“The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.”
Anatole France – unlike Yglesias – was in touch with reality.
Iglesias usually passes as a liberal, but consistently comes out with stuff like this that shows he really doesn’t get it. The “free market” is not everyone’s god.
Unfortunately, Yglesias has fallen far or onto his knees, when he contemplates “economics” among his like-minded friends.
For those out here in the Sonoran Desert, our view on “economics” and which will occur in the next 30 years, is that we, the “racial and ethnics” will see a National Debt that will range from $28 Trillion and $32 Trillion, and which makes “maintaining and managing” our Democracy difficult, at best.
Therefore, I adhere to a Nixonian View that any infamous Surtax on Wages and Salaries, this Nixonian Surtax will start with a 10% on $259,000 to $500,000; 25% on $500,000 to $1 million; and 50% for those making over $1 million annually. To wit, America’s “bills” must be paid, and as such, everyone has a “log to throw into this fire” as we try to keep warm from the icons that reflect the Ygleasias NonSense.
Jaango
What we need even more than an increase in the minimum wage is the repeal of the Taft-Hartley provisions that allow “right-to-work” (sic) laws. (Should be called “right-to-freeload-and-union-bust.)
Exactly. This is what the “they’re just freely entering into a contract!” idiots fail to acknowledge. Low wage employers are being subsidized to the tune of billions with food stamps, Medicaid, free/reduced school lunches, EITC, etc. etc. Yglesias undoubtedly supports all those programs and thinks taxpayers should continue to subsidize the profits of corporations but his right wing counterparts want to keep the wages low and dismantle social safety net programs.
Yes, but when was the last time anyone claimed we were civilized?
Increasing the minimum wage does not necessarily increase purchasing power, except for perhaps very briefly.
The costs of a business go up, be that due to increased oil/transportation prices or and increase in the minimum wage, and the business raises it prices to compensate for its increased expenses. In fact, business may use the excuse to increase prices even more than their increased costs justify. (Even those of us who suck at math know how to round up, don’t we?)
So, sadly, focusing on the minimum wage is attractive on the surface, but only on the surface. And it may actually reduce purchasing power.
Our real problems are a lot deeper and more systemic.
Otto von Bismarck crippled the German Socialist movement by offering a palliative concession, saying ”my idea was to bribe the working classes, or shall I say, to win them over, to regard the state as a social institution existing for their sake and interested in their welfare.” To this day, oppressed people believe the state is looking out for them. The reality is that the state breaks the legs of the poor and hands out taxpayer-funded crutches.
Raising the minimum wage is Bismarck bribe for the poor.
“…when was the last time anyone claimed we were civilized?”
Continued sanity requires that I hold it as a societal goal, far fetched as that may be.
Matt Yglesias goes all in for microeconomic market-transactions as the unit of measure for social performance. This amounts to an eyes-in-blinders obsession with microeconomic efficiency. All that matters is how many people are employed.
Macroeconomics and the long-term ideas of “Why Nations Fail” are more to the point. What odes it take to support coherent families? Do employed workers make enough money to support the children they bring into this world ?
What is the minimum income to achieve functional performance that enables cultural inclusiveness? And if the society is let loose to a laissez faire power-based criminality, where does that go? What happens at the extremes would look more like this:
THE NEW LIBERTY
1. Remove minimum wage laws.
2. Run boom-and-bust cycles with associated redistributions of wealth to the upper register.
3. Generate medical bankruptcies by the million a year to redistribute wealth to the upper register.
4. Remove criminal statutes related to mortgage fraud, to bribing rating agencies, to common law fraud where the scam uses derivative contracts, and to large-scale support for the international drug trade. Also stop prosecuting Ruling Class crimes up through DUI vehicular homicide on a theory that their Job Creator roles are blessed on high.
5. Repeal the 13th Amendment.
6. Convert the bottom 40% of the workforce to slavery.
7. Remove the few local ordinances that might be construed as prohibiting coercive sex between owner and property.
8. Fruniscor isci itus….
Welcome to a master-slave society such as Imperial Rome.
“The price of liberty is eternal vigilance.” You betcha. And that starts with identifying the slavers. There’s no shortage.
Palliative measure. A meaningless remedy to make them believe that government is a social institution that cares about their welfare. While the fascist state enforces a monopoly on the issuance of a fiat currency, the value of which derives from government’s future ability to tax. This money is devalued by printing more, which transfers purchasing power from those who get the new money last to those that receive it before circulating (The Cantillon Effect).
Why not raise it to $50 an hour? Then the poor could buy a new car, buy a house, invest in a 401k, purchase cheap products at walmart, buy that sweetheart diamond ring, new carpet, more televisions, computers, gps’s, eat steak and lobster, buy a college degree. Do all those things we have been programmed to believe define success. Keep consuming people.
Yglesias himself probably doesn’t believe this; Slate specializes in a certain type of Contrarian Troll argument that this article exemplifies. He’s just cashing a paycheck.