Russ Roberts says he can use "Econ 0" to show that the minimum wage reduces employment:

The minimum wage makes some workers, those with the lowest skills, more expensive than they otherwise would be. When things get more expensive, people look for ways to avoid that increased expense. In the case of the minimum wage, employers try to substitute machines and technology for workers, or use higher-skilled workers who are already paid above the minimum instead of lower-skilled workers. It doesn’t require any extreme assumptions about the labor market being in equilibrium or that the demand curve is derived from the marginal product of labor. It’s just that there is some demand for labor and that it slopes downward. All that means is that when workers get more expensive, you try to avoid paying those costs. This is a not neoclassical or neoliberal or Chicago view of the world. It’s everyone’s view of the world.

Well, sure. But note that he doesn’t solve for the general equilibrium:

In the case of the minimum wage, employers try to substitute machines and technology for workers, or use higher-skilled workers who are already paid above the minimum instead of lower-skilled workers.

OK, so – it used to be that when you went to the grocery store, a human laborer tabulated the cost of your goods and accepted payments. But because the minimum wage increased exogenously, grocery stores now find it profitable to substitute touch-screen DIY checkout stations for cashiers. Fine. Employment is reduced. But the firm that produces the checkout stations has now seen demand for their product increased. Assuming they have no idle capacity (which you don’t have to), they’ll have to procure more inputs, at least some of which will probably be labor – but even if their production constraint is 100% capital, the producer of that capital, who has now seen an exogenous increase in demand, may have a labor input as well.

Also, the firm that substitutes the technology will probably still have overall higher costs than under the prior equilibrium, which will presumably reduce their profits. But it will increase the profits of the firms that supply them with the capital that they are substituting the labor. So, in some sense, you could imagine a world where the overall effect of the minimum wage is to transfer income from firms dependent on low-cost labor to some combination of labor and those firms that are less dependent on low-cost labor without having any effect on the overall level of labor employment or the overall labor share of income (though presumably one or the other must change).

You can also imagine that, by accelerating the scheduling by which firms implement labor-saving technologies, you are generating positive externalities.

You can also imagine that, assuming a program that guarantees an income of $12,000/yr + health care in exchange for leaving the workforce, increasing the minimum wage might increase the incentive to elect for work over such a program.

Anyway, I am starting to think that seemingly-intelligent people who refuse to examine the question of the minimum wage except through a very narrow lens are bringing more baggage to this debate then they’d care to admit.

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