Monday, August 17, 2015

The “left”…. more caring than thou… no one has a monopoly on compassion

 

Greg Mankiw, in a recent NYT book review notes that Arthur Brooks 2006 book “Who Really Cares”  shows how in the U.S., media headlines notwithstanding,  households headed by conservatives give, on average, 30 percent more dollars to charity than households headed by liberals, even though their incomes on average are 6 percent lower. They are also more likely to be blood donors.

So why do so many people view liberals as more compassionate than conservatives? The problem, in Brooks' view, is that conservative policy arguments, while cogent if fully explained and digested, are too extended to be useful in a political dynamic dominated by first impressions based on 30-second sound bites.

For example, take the proposal to increase the minimum wage. Conservatives have many reasons to believe that it is the wrong way to help the working poor.

First, when the cost of hiring unskilled workers rises, businesses hire fewer of them.

Second, because some of the costs of a higher minimum wage are passed on to consumers in the form of higher prices, it hurts those who buy these goods and services, like meals at fast-food restaurants. The economist Thomas MaCurdy of Stanford University reports that this price effect “is more regressive than a typical state sales tax.”

Third, the minimum wage is not well targeted to those living in poverty. Of workers affected by an increase in the minimum wage, more than half belong to families making more than $35,000 a year, and almost a quarter belong to families making more than $75,000 a year. If we were evaluating a government spending program to combat poverty, no one would be satisfied if so many of the program’s beneficiaries were already living well above the poverty line (about $24,000 for a family of four).

Fourth, there is a better way to help the working poor: the earned-income tax credit. This income supplement is well targeted to families living in poverty, it does not raise the prices of goods and services produced by low-wage workers and it does not discourage firms from hiring these workers. By incentivizing work, it increases the number of people enjoying earned success.

All of the above holds for NZ.

Arguments like these are persuasive and are hardly the ravings of red necked idiocy. But they do not fit neatly on a bumper sticker. This stuff appeals only to policy wonks, who represent a tiny fraction of the electorate.

“It’s time to give America a raise.”  is how President Obama explained why he wants to increase the minimum wage.

Such a great sound bite plays well on the evening news. Of course, it does not rebut any of the arguments against a higher minimum wage, but it carries a clear implication: The president’s political opponents don’t think America deserves a raise. They are the mean, greedy types and it’s their fault we have poverty..

The NZ media are full of this sort of “easy sell, lazy write” material…. the costs of producing this stuff is low so supply is high.

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