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This note is to an angry young man who describes Bernie Sanders as his and his girlfriend’s “hero” and as “the only candidate following humane economics.” Sigh.
Mr. Claudio Morello
Mr. Morello:
Thanks for your e-mail.
You find my arguments against a $15 per hour minimum wage [2] to be “totally uncompelling” because “labor is not a commodity like bread and electronics.” In your view, “labor should not be subject to the bloodless laws of economics.”
I have no opinion on whether or not labor should “be subject to the bloodless laws of economics,” but I’m quite confident that labor is in fact subject to those laws. And I’m not alone. So, too, does your hero, Bernie Sanders, understand – at least in some contexts – that labor is subject to the laws of economics. Specifically, as you must know, Sanders worries that freer trade tempts corporations to shift production to countries where wages are lower than in the United States. He insists also that freer immigration into America will destroy jobs for Americans. While Sanders’s economics is woefully incomplete, he correctly understands in these contexts that (1) producers seek to minimize their costs of production, and (2) because labor is costly, producers will – whenever doing so enhances their profits – switch from using higher-cost labor to using lower-cost methods of production.
The fact that Sanders ignores this economic reality when discussing the minimum wage should cause you, not to lash out at economists who explain that reality is neither optional nor a puppet of your preferences, but instead to question the intellectual consistency of your hero.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030