Ezra Klein, the Washington Post blogger and rising policy wonk, made some surprising (but insightful) comments yesterday.
[Klein] argues against a federal policy setting minimum compensation for workers:
That will create an incentive to do one of two things: Don’t hire low-income workers (hire a teenager looking for a job rather than a single mother, or hire a housewife looking for a second job rather than an unemployed breadwinner), or hire illegal immigrants.
Klein is addressing not minimum wage laws, but a Max Baucus proposal Klein calls “possibly the worst [policy] in the world.” Baucus has proposed a “free rider” provision in his health-care overhaul bill. The bill penalizes employers who don’t give low-income workers health insurance and thus stick taxpayers with the tab for the workers’ insurance, through Medicaid.
To back up for a second, the Baucus bill anticipates that employers might purposely hire low-income workers who are eligible for insurance subsidies, so that they don’t have to pay them directly. To counteract that, Baucus is in favour of a $400 per-employee/per-month penalty to wash away that incentive.
That makes some sense.
Ezra Klein’s reaction, meanwhile, employs the exact same logic used by opponents of the minimum wage who say it drives up unemployment among the poor. Make it more costly to hire those at the bottom of the ladder, and you’d expect less hiring there.
That also makes sense. But it’s not the sort of thing you often hear from liberal pundits.
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