Labor Econ Versus the World: Ecumenical Edition
By Bryan Caplan
Most courses in labor economic don’t strive to undermine our society’s secular religion. Mine does. I suspect that most labor econ professors would object to my efforts. Shouldn’t a college class provide a balanced discussion of the issues, instead of trying to change the way students see the world?
Yes and no. Of course college class should provide a balanced discussion of the issues. But if students arrive with a bunch of silly preconceptions, changing the way students see the world is a precondition for balanced discussion. Take evolution. Of course, a good class in evolution provides a balanced discussion of the issues. But if students arrive as committed creationists, the professor can’t teach them until creationism has been thoroughly critiqued.
But are there really any popular preconceptions in labor economics as ludicrous as creationism? I say there are, starting with what I called Tenet #1 of our secular religion: “The main reason today’s workers have a decent standard of living is that government passed a bunch of laws protecting them.” How do we know it’s false? Most obviously, because even if you assume zero disincentive effects, equally dividing premodern incomes still yields absolute poverty. More subtly, because employers treat most workers far better than the law requires; competition’s the only credibly explanation. How do we know Tenet #1 is popular? Because it’s ubiquitous; until you study economics, it’s virtually the only story you hear.
I’m well-aware that many – perhaps most – labor economists – consider labor regulation on balance helpful for workers. Not critical, just helpful. Even if they’re right, they should still spend ample time dissecting Tenet #1. Why? Because you can’t have a reasonable discussion of the costs and benefits of labor regulation until you root out all the silly hyperbole students bring to the table.
Think about how few successful politicians of either party openly favor
the abolition of the minimum wage. A few support the minimum wage because they’re
convinced labor demand is highly inelastic. All the rest just rely
on our secular religion: passing “pro-worker” laws is a clear-cut way to
dramatically help the common man.
My fellow labor economists’ mistake: Since they weigh the merits of labor regulation for a living, they forget that non-economists can’t even imagine what the downsides might be. If professors fail to spell them out in gory detail, students will remain oblivious to the downsides for the rest of their lives.