Toddler Economics
Tim Worstall has a take-down on the primitive economic sense of the Wal-Mart bashers:
To wish that WalMart move from its current low wage and lots-of-labor model, to Costco's (relatively) high wage and low labor utilization is fine, but an adult view would include the acknowledgement that for WalMart to adopt the second model would require that they fire between 860,000 and 975,000 of their current workforce. The child's view would be that everyone should just be paid more because I want it to be so! -- i.e. that there are no side-effects to such decisions.As I said up at the top, I think Ezra Klein has indeed identified an extremely important question, quite truthfully, one of the two or three most important issues facing the country. Are we adults or children? If we are to be adults of course we should also apply the same blindingly obvious logic to the minimum and living wage movements. As Costco proves, when companies pay more for the labor they hire, they hire less of it.
As an added extra bonus I look forward to Ezra's speech in which he explains why nearly one million people losing their jobs is going to be good for America. I'd most certainly pay good money to see him deliver it to those he is arguing should get fired.
Indeed. And I think it's a nice catchphrase: Those fighting Wal-Mart want to add one million people to the unemployment rolls. Of course, isn't that Wal-Mart's real sin? Giving people an opportunity to get a job, and work their way up out of it?
