The Microsoft founder “warned against raising the minimum wage Tuesday on Morning Joe, saying it results in a ‘huge tradeoff’ that can adversely affect households in poverty.” [Free Beacon] Gates has pledged most of his fortune to philanthropic efforts, much of it targeted toward problems of poverty. [Wired]
Related: David Henderson has more on Gates’s point about how the minimum wage is not well targeted to reach poor people, and on how the impact on consumers of things like fast food is itself somewhat impoverishing. William Poole at Cato begins with the oft-repeated War of Economists’ Letters over whether minimum wage hikes do a lot of damage to employment or only a little, and then turns to the ethical questions. Tyler Cowen exposes some of the holes in the relatively new argument that the existing Earned Income Tax Credit (EITC) unfairly subsidizes employers and that minimum wage hikes are somehow an efficient way to recapture part of the transfer. More links: Twitter hashtag #CatoMinWage; James Dorn, Cato (“Hong Kong grew rich without a minimum wage because it undertook the reforms that fuel growth”). And on layoffs following an arbitrated doubling of wages at a New York City casino: “This just in — demand curves slope down.” [Coyote] Plus: Teen employment after minimum wage hikes: “Is there any other issue where the data conforms so strongly to basic economic intuition, and yet is widely written off as a coincidence?” [Kevin Erdmann via Tyler Cowen]