Paul Krugman asks, “Would cutting the minimum wage raise employment?” The macroeconomics discussion is interesting, if over my head.
But, politically, of course nobody’s going to cut the minimum wage. Can you imagine the unpopularity of a minimum wage cut during a recession? I can’t imagine that all the editorial boards of all the newspapers in the country could convince a majority of Congress to vote for this one, whatever its economic merits.
Which makes me wonder why the idea is being discussed at all. Is it an attempt to shoot down a minimum wage increase that might be in the works? Krugman mentions that Serious People are proposing a minimum wage cut, but he doesn’t mention who those Serious People are. I can’t imagine that they’re serious about thinking this might happen.
P.P.S. I posted this at the sister blog to see if anyone could tell me how anyone could be considering minimum wage cuts as a serious political option. Nobody bit, but Tom Beecroft wrote that “it’s a theoretical economics argument, rather than a political reality argument.” That makes sense, but it still seems to me that something more is going on here than a dispute over pure theory. As a political scientist, it just seems funny for me to see people debating a policy that has no chance of being implemented. There must be something else going on here.