Minimum Wage and Commodity Pricing
George Will has a rather standard column, with which I basically agree, on why increasing the federal minimum wage is both politically expedient and economically silly.
He gets into trouble, though, toward the end of the piece:
But the minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities’ prices.
As Kevin Drum observes, “This, in a nutshell, is the core problem with conservative economics: it views workers as commodities. Naturally it follows from this that we should be free to treat workers like commodities, rather than as human beings.”
The Wikipedia definition is a pretty good one: “a commodity is an undifferentiated product, good or service that is traded based solely on its price, rather than quality and features.” Obviously, people are the exact opposite of commodities; they are unique beings with incredible difference in quality and skills (“features” likely has the wrong connotation).
Then again, in the context of the subset of workers who would be impacted by a change in the minimum wage, Will’s word choice is close enough to be defensible. (Indeed, I used that term this morning in a discussion of the contretemps over Wal-Mart’s use of flexible scheduling of its employees.) The lower the skill level of the worker, the more easily replaceable he is. People who work on assembly lines or flipping burgers at McDonald’s are essentially undifferentiated from the perspective their firm. If your job can be easily outsourced to an illiterate Third World peasant or your employer can hire someone off the street at minimum wage and train them to your level of proficiency in a day or two, you’re pretty much a commodity.
Update (Steve Verdon): I’d also add that Drum is a bit out to lunch on this. I don’t think Will is saying that workers/people should be treated as commodities, but that their labor should be treated like a commodity. Drum’s reading of Will is rather perverse in that one could then say “conservative economics” advocates slavery.