An amusing observation (or maybe a sad observation, depending on how you look at these things) occurs over at the CEI OpenMarket blog, where Peter Suderman looks at Slate's dialogue about Wal-Mart between Jason Furman and Barbara Ehrenreich. Furman is an economist, Ehrenreich most certainly is not.
Suderman is especially drawn to an exchange where Furman imagines what might happen if a big-box high-volume low-wage-paying discounter (Best Buy, specifically) were replaced by smaller, higher-wage, higher-priced shops (Stereo Exchange, for example). Clearly:
We would have more "good jobs" and fewer "bad jobs." The average wage in the electronics retail sector would go up. But where would all the former Best Buy workers go? Most of them wouldn't work at Stereo Exchange. Maybe some would take a pay cut and work at McDonalds. Maybe others would get lucky and find this was just the prod they needed to find a better job. It's hardly obvious this would be an improvement.Ehrenreich simply doesn't get it:
I'm a little baffled by your Best Buy/Stereo Exchange example. If Stereo Exchange took over from Best Buy, there'd be a lot more better-paying jobs in the retail electronics business. Why wouldn't the former Best Buy workers take a lot of these new and better jobs? They're not all as clueless as you seem to think.Suderman points out Ehrenreich's economic illiteracy:
Must be nice to live in that wonderful fantasy world where massive wage increases to a million-plus person workforce don't have any effect on how many people can be employed, or what product costs are (and therefore how much product can be sold), or any of that icky economic tradeoff stuff.Clearly, if you're going to discuss the Wal-Mart phenomenon coherently, it might help to have a basic grasp of (a) why people shop there; and (b) why people work there. In both cases, it's because (a) they perceive themselves better off for doing so; and (b) they typically can't get a better deal elsewhere. Closing off the Wal-Mart option for people, on average, makes them worse off. You might close your eyes real tight and imagine some people better off afterwards, like Barb does, but that's not the smart way to bet overall. It's pretty simple, but it's the sort of thing the minds of folks like Barbara Ehrenreich just don't/can't/won't grasp.
[Ehrenreich] wants to see the working class fight for better conditions--a living wage, etc--more or less the way they did it the first time, through solidarity, in the streets. (Yes, she's a socialist. got a problem with that?) I wish.When facts and logic are not on her side, Ms. Anya can always be relied upon to go for tendentious cant. Typical of those with the unconstrained vision, she and Barb know that the only things causing the world's problems are human stupidity and malice; the proper and obvious solutions, then, involve fighting in the streets.
Not that this sort of thing is restricted to fringe wackos. Mainstream wackos are also in on it. Recently reported in the Washington Times were the remarks of Democratic National Committee Chairman Howard Dean, addressing a recent lefty religious gathering:
"This is a moral nation, so the first thing we must do is convince people that poverty is a moral problem," Mr. Dean said. "It is a moral principle to raise the minimum wage. It is nothing but economist mumbo jumbo to say raising it will hurt jobs."Economist mumbo jumbo. Great. Can't wait for the Democrats to get back in power so they can start ignoring "economist mumbo jumbo" as they're on their way to building utopia.
The WTimes did manage to dig out an economist saying mumbo jumbo that Dean would find agreeable:
Christian Weller, senior economist at the Center for American Progress, said that a minimum wage increase from $5.15 to $7.25 would increase minimum wage earners' share of the nation's overall wealth.Sure. For minimum wage workers (a) who keep their jobs; and (b) whose employers don't decrease their work hours to keep payroll expenses level. Weller apparently feels he can ignore everyone else. But that's more of the "icky economic tradeoff stuff" Suderman refers to; even if you're an economist, you don't have to mention it.
"Profits are at their highest levels, but the purchasing power of the minimum wage is at its lowest since the 1950s. I think it is only fair to take a bit from the top and give it to the bottom," Mr. Weller said.So, at bottom, Weller basing his recommendation on a subjective call about what's "fair"; he's really not speaking as an economist, but, like Dean, Ehrenreich, and Kamenetz, as an unconstrained-vision moralist. Talk about mumbo jumbo!