Go ask the economics department? OK.


In his letter (“Wages are set by supply and demand,” Jan. 13), Christopher Simons offered us an interesting, practical exercise: “Walk to ?the economics department, find someone who doesn’t look busy and ask him ?or her to elaborate his or her opinion of minimum wage laws.”

He implied that they would universally acknowledge that minimum wage laws were harmful to the economy and to the poor.

Apparently, Simons didn’t perform the exercise that he suggested. I did. ?I polled seven professors who are currently teaching economics here at the U, and received three responses. All three favored minimum wage laws and all three believed that the minimum wage should be set higher than it is today.

Simons’ arguments rest on a very important assumption: That the demand for skilled labor is elastic. That is, companies can easily decide to get by with less labor if labor becomes more expensive. In fact, the amount of elasticity depends on the type of work.

Manufacturing, for example, can be done anywhere, so raising the cost of labor tends to drive jobs out of that sector. But if a business needs a janitor or a cashier, it can’t offshore that job, nor can it let the position go unfilled.

Some comments from the respondents: “Increased minimum wage laws would be very beneficial for both the poor and the working poor.”??”Minimum wage laws are necessary in the United States because of the imbalance of ?power between wage earners and owners of business.”??”As long as there is an oversupply of labor, the owners of production have ?typically taken advantage of workers and paid a subsistence wage.”? “…(R)ecent research suggests that it is generally unlikely that people ?will lose jobs due to reasonable increases in the minimum wage.”??While these responses certainly do not reflect the views of all economists, it is clear that Simons should have done more research before ?he said, “I thought the debate was all but over.” The debate is neither ?as simple nor as settled as he claims.

Bryce AndersonSenior, Computer Science