More About How Dumb Minimum Wage Hikes Are

Greg Mankiw tipped me off to a report by David R. Henderson about where the benefits of minimum wage go. Highlights?

• Only 11.3 percent of workers who would gain from the increase live in households officially defined as poor.
• A whopping 63.2 percent of workers who would gain were second or even third earners living in households with incomes equal to twice the poverty line or more.
• Some 42.3 percent of workers who would gain were second or even third earners who live in households that have incomes equal to three times the poverty line or more.

At an aggregate level:

• The net increase in wage income to households containing low-wage workers would be $4.03 billion per month.
• The net increase in wages to poor households containing low-wage workers would be only $439 million per month.

Now here’s the tricky question: do middle class voters know that this policy is going to benefit them by a roughly 10:1 ratio? I’m skeptical that they are that well-informed, but you can’t argue that a program like the Earned Income Tax Credit would actually do a lot more good for the people who need it most, and yet President Obama chooses to go with minimum wages and all my gullible left-leaning friends[ref]Sorry, guys.[/ref] go right on along with it.

I think the old rule probably applies[ref]Hanlon’s razor: Never attribute to malice that which is adequately explained by stupidity[/ref], but I also have a hunch there’s got to be more to it. The middle class capture of welfare programs (to the detriment of their intended recipients) seems too comprehensive to be chalked up to random chance. Maybe the problem is simply that what you can understand enough to support you can also understand enough to co-opt? It’s depressing no matter how you look at it.