Tyler Cowen writes about some research by Dan Klein on reasons why prominent economists support increasing the minimum wage although theory and evidence suggest that it will make some low-income people worse off:
...The results are striking, most of all for how far they stand outside traditional economic reasoning:
Two of those listed by Tyler point to supporting democratic institutions:
...Peter Dorman: Since Tocqueville (at least) there is a well-established argument that greater equality of income and respect is associated with better democratic performance. This is a near-consensus position in political theory.
...Jeffrey Waddoups: Reducing wage inequality will increase the quality of democratic institutions.
I realize it's difficult to measure "quality of democratic institutions," but has this been formally studied before? In any case, I like Tyler's summary:
Bernard Wasow: A low cost demonstration of concern for low wage workers that causes little damage. Elicits a buy-in by low wage workers to the polity
...It is easy to read these and think "Ah, how narrow is neoclassical economics in contrast to these fine thoughts." My response is instead: "These people are making a mountain out of a molehill." Bernard Wasow is the guy who makes the most sense.
I agree. Raising the minimum wage is a low-cost way for politicians to show they care for the downtrodden in society - low-cost to the individual politicians, that is - not to those negatively affected by higher minimum wages.
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