Tuesday, September 3, 2013
Brishen Rogers (Temple) has just posted on SSRN his new article entitled: Justice at Work: Minimum Wage Laws and Social Equality.
Here is the abstract:
This article develops a new normative defense of minimum wage laws. Existing legal academic debate asks how effectively such laws deliver resources to the working poor compared to transfer programs such as wage subsidies and negative income taxes. Such transfers have clear advantages in terms of redistribution, for they target the poor rather than all workers, and they do not cause unemployment. Legal scholars have therefore criticized minimum wage laws both on utilitarian grounds of aggregate wealth maximization and on liberal egalitarian grounds of fairness toward society’s worst-off.
Accepting for the sake of argument that minimum wage laws cause inefficiency and unemployment, this article nevertheless defends them. It draws upon philosophical arguments that a just state will not simply redistribute resources, but will also enable citizens to relate to one another as equals. Minimum wage laws advance this ideal of “social equality” in two ways: they symbolize the society’s commitment to low-wage workers, and they help reduce work-based class and status distinctions. Comparable tax-and-transfer programs are less effective on both fronts. Indeed, the fact that minimum wage laws increase unemployment can be a good thing, as the jobs lost will not always be worth saving. The article thus stands to enrich current increasingly urgent debates over whether to increase the minimum wage. It also recasts some longstanding questions of minimum wage doctrine, including exclusions from coverage and ambiguities regarding which parties are liable for violations.
As Congress will no doubt be debating the raising the minimum wage soon, Brishen provides an excellent argument for why the US should follow an approach that embraces both an increase in the minimum wage (to a level beyond poverty wages) and a wage subsidy in the form of the Earned Income Tax Credit (EITC) or something similar. As Robert Reich recently argued on YouTube, both a higher minimum wage and EITC are an essential part of rebuilding this nation's economy with better paying jobs. Brishen's article provides another important justification for raising the minimum wage.