The Unemployment Rate and the Meaning of Society

Robert Reich
Robert Reich (Photo credit: victoriabernal)

Robert Reich calls raising the federal minimum wage “a no-brainer,” as he indicates that states with a higher minimum wage rate than the federal law don’t endure higher unemployment rates. He didn’t cite a specific source to validate that conclusion, so I can’t speak to that.

But implicitly granting that what the former labor secretary said is correct, there are some reasons to think why the unemployment rate might not change as conventionally expected if the minimum wage rate were raised. One reason could be that since the unemployment rate is measured by how many people are actively looking for work, if a relatively high minimum wage decreases the opportunities for work, people might become discouraged and just stop searching, lowering the unemployment rate. It might also be the case that increasing the minimum wage would encourage unemployed people, like teens or retired folks wanting a supplemental income, to look for work when they otherwise wouldn’t have given it a second thought. Another consideration is that states with higher minimum wages might also have higher standards of living, so a higher wage rate wouldn’t impact as many lines of work.

My point is that, contrary to Reich’s suggestion, we can’t just look at the statistical evidence and glean a policy proposal, let alone determine what the goals of that proposal should be.

Reich thinks that “Every society must necessarily decide for itself what decency requires. That’s the very meaning of a ‘society.’ ” But it’s not society deciding anything (at least not anymore than a market deciding anything). It’s individuals and voluntary associations of people thinking and acting, sometimes with conflicting purposes. At a minimum, a decent and morally just society is a free society. For people to behave decently and justly, they must be free to act on their own judgments for their decisions to have moral significance. For example, parents jailed for abusing their children wouldn’t deserve praise for not issuing beatings while locked behind bars.

Prospective central planners are prone to ignore that people should have the right to choose for themselves what at decent society looks and feels like.

If it’s we who are the government, as Reich refrains, why do we get so many policies that we don’t like, such as prolonged foreign conflicts, backward social agendas, drug war raids, restrictions on labor organizing, immigration controls, and invasive surveillance of people’s personal lives? Perhaps the expression that we are the government is not meant to hint that we can control the government as much as it is a psychological necessity to identify with abusers, to condone their actions, and — if called — to celebrate their oppression.