One of the tragedies of humanity is that of Sisyphus’. The boulder keeps rolling down the hill each time it has been pushed up.
From time to time, the same issues resurface, rejuvenating familiar debates once held in the past. Two of the issues which of great public concern at the moment, yet again, is minimum wage (no thanks to the Labor Day celebration) and food sovereignty. I have penned my opinion on both issues and in the spirit of recycling, they are:
- [1282] Of questioning the morality of minimum wage
- [1099] Of food sovereignty and comparative advantage
In the first entry, I oppose minimum wage while in the second entry, I appeal for an appeal to comparative advantage and not to food sovereignty.
4 replies on “[1638] Of revisiting minimum wage and food sovereignty”
Your incentives do not address the adverse effect. In fact, your argument is incoherent. You talk about reducing wealth inequality (my disagreement on whether minimum wage leads to equality notwithstanding) and in the immediate paragraph, you espouse policy that encourages it through elimination of labor intensive jobs.
Furthermore, the goal of your incentives could easily be achieved without minimum wage, without adversely affecting other part of the economy.
For the “adverse effect” of minimum wage, that’s why I point out the incentive part.
Pollution is an example of eternality, completely different from the case of minimum wage. It’s absurd to pretend that the two policies are comparable.
On minimum wage does not go against liberalism, I think you’ve got social liberalism in mind, which is a different kind of liberalism. But this is not about liberalism. It’s about positive economics.
Minimum wage does not fight wealth inequality (wealth inequality itself is not a problem), it only increase it through elimination of jobs. With greater unemployment rate, wealth inequality will only increase.
And it is unfair to blame a flawed policy on its implementation. When the policy is flawed, the implementation will only implement the flaws. And when it’s flawed, why there should be a drive to implement it?
Finally, minimum wage may increase the attractiveness of investment in R&D but the policy affects other things too and adversely at that. If R&D was indeed the objective, there are other policies which specifically tailored to encourage R&D without adversely affecting the other parts of the economy.
IMHO, I never though of minimum wages are against liberalism. Bare in mind that human society has failed to imitate the true natural selection rules For example, without regulation and incentive, manufacturer will keep pouring pollutants into rivers. Those are carrot and stick control to curb the monster of capitalism , otherwise earth will be inhabitant like Mars.
For the minimum wages, IMHO, it is a method to improve the society. To reduce huge inequalities on wealth distributions, both minimum wages and leveling income tax tree are good method. However, Malaysia government bureaucrats lack the driving force to do so.
For example, when implement minimum wages, employer must reinvent process to cut down labor intensive work or make it more efficient,e.g. apply technology or attend management cost .
This mean government must give the carrot to the employer to do so. In fact, minimum wages with incentive(e.g. machine capital tax rebate, education) will work.