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.
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”.