Efficiency Watch

Sidenote: I was going to title this post “Why Oh Why Can’t We Focus on Efficiency?!TM“, but I couldn’t bring myself to do it.

Adam Ozimek shares my prescription for addressing poverty:

I have a hard time seeing how this is justified over broad, direct wage subsidies by efficiency or fairness criteria.

There are two pretty straightforward problems with this being a clear area where pragmatic left-wing and right-wing liberals can find common ground:

  • Leftist-liberals want to be overtly paternalistic, without looking like they are being overtly paternalistic. Of course, they (at least honest people) realize that cash transfers will, in the aggregate, probably get spent irresponsibly by the poor. Thus, we have proposals for price and wage controls.
  • Allowing companies to pay workers anything and then offering a wage subsidy does not jive well with leftist-liberals’ sense of “economic justice”, and brings up unplesant images of what they feel is “wage slavery”.

One thought on “Efficiency Watch

  1. Minimum wage increases eventually level out in their detrimental effect, though, no? At least as time progresses, so does productivity.

    Perhaps what needs to be done is instead of reviewing what the minimum wage should be, tie it minimally with cost of living and instead of having huge spikes of 20%+ minimum wage increases, have wage subsidies to compensate for the lack of radically increased minimum wage.

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