Louis XIV, pictured above, the king of France from 1643 to 1715, famously said, “L’Etat, c’est Moi.” Thus the title of this post.
Ro Khanna, a Democratic member of the House of Representatives, was recently asked what his plan was for the small businesses that might be hurt by the Democrats’ (and some Republicans’) proposal to raise the minimum wage from its current $7.25 an hour to $15.00 an hour by 2025.
The interviewer asked:
I’m wondering what is your plan for smaller businesses? How does this, in your view, affect mom-and-pop businesses who are just struggling to keep their doors open, keep workers on the payroll right now?
Khanna answered:
Well they shouldn’t be doing it by paying people low wages. We don’t want low-wage businesses.
What does Mr. Khanna mean by “we?” Many small businesses want to pay what he would regard as low wages. Many workers would like to work at those low wages if the alternative is higher wage rates but fewer hours, being worked harder, getting fewer benefits, or, in the limit getting zero hours. Many customers would like to buy goods and services produced by businesses paying wages less than $15 an hour.
But none of these people count, in his view.
His “we” means “he” or, more inclusively, people like him who are willing to ignore the desires of those three groups.
Thus the title of this post.
READER COMMENTS
KevinDC
Feb 23 2021 at 7:53pm
This reminded me of something I came across in Daniel Dennett’s book Intuition Pumps:
In the same way and for similar reasons, I become particularly suspicious in political or policy discussions when I see such use of the term “we”, and especially the phrase “we as a society.” Aside from the fact that the phrase “we as a society have decided such and such” has no coherent meaning, it also seems to be used as a sort of rhetorical “get out of jail free card” to avoid offering, or answering, an argument.
Jon Murphy
Feb 23 2021 at 9:50pm
Also a way to avoid taking blame for any fallout. “Oh, the minimum wage costs jobs? I didn’t cause those jobs to disappear. We decided they were not worthwhile!”
David Seltzer
Feb 24 2021 at 7:03pm
Jon, the term “we” is amorphously defined. Does we mean 100% of us? If so, we is logically false if one person disagrees. Is we a minority? If so, is we a tyrannical minority? Is we a majority?
Jon Murphy
Feb 25 2021 at 11:43am
Oh yes. Which is why I think they like it
Phil H
Feb 23 2021 at 8:53pm
Several of these don’t stand up:
“Many small businesses want to pay what he would regard as low wages.”
Congresspeople don’t represent businesses; they represent people.
“Many workers would like to work at those low wages if…”
Sure. If.
“Many customers would like to buy goods and services produced by businesses paying wages less than $15 an hour.”
I don’t think this is true. Most customers don’t care about the internal workings of the companies they patronise. That’s the whole point of price mechanisms (which enable us to buy economically without knowing how to identify economical producers) and regulation (which enables us to buy safely without knowing how to identify safe producers).
As for the use of “we”… the guy was literally elected to represent the views of his constituents in a national forum. I understand the libertarian objection to reifying the opinions of the country, but this is how representative democracy works. Seems a bit pointless to criticise the guy for doing exactly what it says on the job description.
KevinDC
Feb 23 2021 at 10:09pm
Hey Phil –
You said:
Presumably they also represent people who run and are employed by small businesses, which is clearly what David was talking about. Just modify the first statement to “many people who run small businesses” instead – nothing relevant in changes regarding David’s point, but I suppose that fixes your terminological quibbling.
I have no idea what you’re trying to say here. Are you claiming that none of the conditions David describes will actually happen? Or if they do, it just doesn’t matter or those people’s situations don’t deserve to be taken into account? Or what? Can you please make this more explicit?
I think you misunderstood the point. David isn’t claiming that customers value buying things from companies with a sub $15 wage because of that wage, as some kind of terminal goal. He’s just saying that those companies are currently producing goods and services customers want and value, and that if those companies are forced out of business because of increased labor costs, then the customers who want those goods and services the business currently provide will no longer be able to get them.
Again, I think you missed the point. It’s not him “represent[ing] the views of his constituents” that’s the problem. The objection is that he’s framing his position as be representative of the views of his constituents, when in fact it’s simply advocating for elevating the wishes and interests of some of his constituents over the wishes and interests of some of his other constituents, and trying to gloss over that fact by using language suggesting a universally shared worldview which simply doesn’t exist. Maybe he thinks that the views of the pro $15 crowd should in fact be elevated and imposed on everyone else, but if that’s the case, then that’s what he should be saying.
Phil H
Feb 24 2021 at 1:40am
“…fixes your terminological quibbling.”
First, yes, you’re kinda right on this point. I was quibbling a bit, because I think it’s DH’s job as an economic pundit to make his arguments tight. Making arguments tight makes them better!
Second, though: Making the argument tight reveals the real structure of it. Small business owners *in their professional roles* would prefer to pay lower wages. I completely believe that this is true. But it’s a statement about business, not a statement about people. In my professional role as a translator, I’m fanatical about punctuation; in my personal life, I couldn’t care less about it. If someone were to conflate those two things, and say Phil’s a punctuation fanatic, they would be wrong. Equally, I think DH is wrong to conflate the professional motivations of employers with their personal beliefs.
It’s still a bit of a quibbly point.
“I have no idea what you’re trying to say here.”
Similarly quibbly. DH stated his point as an “if”, and it may well be technically true. But it felt to me like the “if” was a way of dodging giving evidence and arguments. I also disagree with his point, “higher wage rates but fewer hours” – I’d much prefer that!
“the customers who want those goods and services…will no longer be able to get them”
Yes, I agree that is what DH was implying. But once again, no evidence given here, and in fact I haven’t seen evidence for this argument anywhere on this site! I’ve seen arguments that minimum wages cut employment, but not that they reduce the availability of consumer goods. This stuff needs to be argued for. A writer doesn’t get to just imply it.
“in fact it’s simply advocating for elevating the wishes and interests of some of his constituents over the wishes and interests of some of his other constituents”
So you claim, without any evidence… I mean, maybe! But also, this is how the party system works. One guy wins an election, the other guy loses. The guy who wins certainly *should* make a good-faith effort to represent the entire constituency. But they also *should* make a good-faith effort to do the things in their party’s manifesto, because that’s what won them the votes. It looks to me like Ro is doing that.
DH obviously believes Ro is incorrect about a bunch of stuff. That’s fine. It doesn’t mean that Ro is doing anything wrong.
Mark Z
Feb 24 2021 at 4:47am
” I’ve seen arguments that minimum wages cut employment, but not that they reduce the availability of consumer goods.”
How are minimum wages are supposed to reduce employment? By driving up prices of goods produced by minimum wage employees (and consequently reducing demand for said goods, and for labor to produce said goods). Higher prices reduce availability.
KevinDC
Feb 24 2021 at 9:17am
This still seems like a distinction without a difference to me. If a business owner prefers current wage levels because a forced increase in the cost of labor will cause her to lose her business and all her employees to lose their jobs…that’s very much about people, and to say otherwise seems to require a view of business and the economy that is quite literally dehumanizing. It’s not as if people stop being people when it comes to their livelihood, or that their concerns as business owners, as workers, or as customers can all just be handwaved away as merely being about business and therefore not about people. Nor does it seem likely to me that the owner of a struggling restaurant wants to keep wages where they are as a “professional motivation” but then upon going home he suddenly gains different “personal beliefs” about wage levels, but even if he didn’t I don’t see why one is categorically more important than the other. I’m perfectly willing to grant that your concern about grammar or punctuation changes between your personal and professional life, but I think you’re drawing conclusions from that which are very far from justified.
I think this betrays a serious lack of empathy on your part, because many people don’t prefer that, and for significant reasons. For example, when the minimum wage was increased in Seattle, low-skilled workers got higher pay but lower hours – but their hours were cut by a larger degree than their pay was raised, with the end result that their actual take-home pay was lower as a result of the wage increase*. Another significant reason is that most benefits require working a certain number of hours to qualify, so having “higher wage rates but fewer hours” can actually be devastating to other people because it costs them their benefits, even if you find it aligns with your personal preferences. Just one example*:
Maybe the concerns of these women and others in their situation are also to be dismissed as merely being their preferences as employees and therefore being about business having nothing to do with people, but I personally think their concerns are very legitimate and Ro’s casual dismissal of their situation reflects poorly on him.
You’re still missing the point. The argument isn’t that the minimum wage makes entire classes of consumer goods unavailable. The point is something closer to what is illustrated by this* episode:
Obviously it’s not as if “pizza” as a good is no longer available to the citizens of Seattle after this. But Ro’s initial claim, the one David was responding to, was that jobs that would be lost and the businesses bankrupted as a result of forced increases in labor costs are jobs and businesses “we don’t want” anyway. We, who? The employees clearly wanted those jobs. The customers of the former Z Pizza wanted that place to be open and operating – otherwise, Z Pizza wouldn’t have had any customers to start with. The owner of the shop wanted her business to stay open too, and didn’t want to lose her livelihood. These are real people with real concerns, and Ro’s whole response is to simply dismiss their entire existence as something nobody even wants. In doing so, Ro displays an all too common level of callousness and casual cruelty I find on the left these days.
In this case, the claim I made is a logically necessary truth. There are only two possibilities – either he’s advocating a policy view that is universally shared among his constituents, or he’s advocating for elevating the preferences of some constituents over others and imposing it on the whole group. Those two options capture the entire logical space – and since his preference isn’t in fact universal, my claim is necessarily entailed. You say that politicians should “make a good-faith effort to do the things in their party’s manifesto, because that’s what won them the votes. It looks to me like Ro is doing that,” and that’s fine. But my point was simply that Ro was wrong to present his opinion the way he did. If he had simply said “My party and I don’t want those jobs and businesses to exist, even if the owners and employees and customers of those businesses do want them” then I wouldn’t have any objection. Well, I mean, I’d still find his statement and outlook to be callous and cruel, but it would at least be an honest representation.
*All of the things tagged by an asterisk are things for which specific evidence has been posted on this blog – I only highlight that because you seem concerned that claims are being made on this blog without supporting evidence. There’s actually quite a lot of it to be found here, but only so much can go into a single blog post.
Jon Murphy
Feb 24 2021 at 10:12am
Don top of KevinDC’s excellent responses, let me address this:
As a logical matter, we cannot make that claim with any certainty. Politicians are “bundle goods.” Some constituents may agree with their entire platform. Some many only agree with part. Some more may agree with none of it but view the politician as better than the alternative. We cannot say with any reasonable certainty that the platform is what won them the votes.
KevinDC
Feb 24 2021 at 10:23am
That’s a very interesting point. This is especially true when thinking of the phenomenon of “single issue voters” who will vote for a politician sharing their view of X, even if they disagree with that politician on everything other than X. I don’t have any solid data offhand, but my sense of things is that the high level of political polarization we’re seeing could easily lead to an increase in single issue voters, which could in turn lead to situations where a politician claims a mandate on an agenda that 90% of the people who voted for him actually oppose. It would be interesting to see to what degree that plays out in reality.
Jon Murphy
Feb 24 2021 at 10:33am
I suspect the issue of single-issue voters played heavily into the 2016 election. Admittedly, I only have anecdotal evidence to support my claim, but I know a good many people who “[held] their nose and voted for Trump” to get the Supreme Court pick, while staunchly opposing his proposals on trade and immigration.
Jon Murphy
Feb 24 2021 at 10:56am
To Kevin’s point, you make a distinction without a difference.
One of my favorite TV shows is the classic show Have Gun – Will Travel (1957-1963). In what is perhaps the best episode, Bitter Wine (Season 1, Episode 23), the main Character Paladin is trying to resolve a property dispute between a winemaker and an oil refiner. When the winemaker is describing the damage being done by the refiner to his vineyard, he laments: “These are not wine barrels. These are years of my life!”
A business, you must understand, is not nameless, faceless. It is people. People work in the business. People build the business. People patronize the business. Any statement about business is a statement about people.* When Ro makes a statement about shutting down businesses because they do not meet some arbitrary whim, he is necessarily saying that these people deserve to lose their pride and joy, that they deserve to lose the years of their life.
When my father sold his business in 2015, that was a very emotional moment. Yes, he was ready to retire and he got a good deal, but it marked the end of an era. Seven generations of Garbarino/Murphys came to an end that cold February day. My dad’s choice was willing, but still emotional. Can you imagine the people who invested years to have something shut down because some politician said they didn’t deserve their livelihood?
Over much of the past year, you expressed confusion at why Americans (and Europeans) opposed lockdowns from COVID. The reason is simple: the lockdowns did not affect dehumanized businesses. They affected very real people. Folks lost years of their life due to arbitrary (and factless) decisions. In a communist society like China, I can see why such an individualized focus doesn’t develop; the government owns everything, so no one’s business represents them. But in the West, that is so very different. A business is people; it is years of their life.
*Really, any statement about any organization, whether it be a firm, government country, etc is a statement about people. Forgetting this crucial fact leads to many missteps in reasoning.
Phil H
Feb 24 2021 at 11:24pm
Thanks for all those replies. I’ll restrict myself to responding to what I see as the most important point:
“A business, you must understand, is not nameless, faceless. It is people.”
Conflating the needs of business with the desires of the populace is a pretty classic political dodge. It’s another way of claiming to know what “the people” want, in fact! But business is not all of people. Business is what many people do with a lot of their time. But it doesn’t represent the totality of our lives; only a part of it. Therefore, the claim that “business desires X” will never be a complete argument that the government should do X.
“Nor does it seem likely to me that the owner of a struggling restaurant wants to keep wages where they are as a “professional motivation” but then upon going home he suddenly gains different “personal beliefs” about wage levels”
OK… it seems very likely to me, because I’m in precisely that position! I’m probably going to hire my first employee this year. In order to maximise my profits, I want to pay this employee as little as possible. But I have strong opinions that people in my profession should be well-paid and should have higher professional status. These two contradictory desires coexist in me! You’re also right that it’s not obvious which should “win out” – or which I would vote for if it became a political issue.
Business is important. But it’s not people. Only people are people; business is one part of our lives, and any attempt to claim that the needs of business are the needs of the people is just playing politics. It’s doing the same thing that DH was criticising Ro for.
KevinDC
Feb 25 2021 at 7:41am
This is a straw man. Nowhere was anyone claiming that business represents the “totality of our lives,” and all of us would agree that business is simply a “part of [our lives].” Nor was anyone conflating “needs of business” with “desires of the populace” by suggesting the two are identical. I agree that the “needs of business” is a subset of peoples lives and desires. Saying “business is entirely about people” does not entail the statement “people are entirely about business.” The difference between those two statements is, I think, pretty obvious, and I’m sure it’s obvious to you too. So your response on this point makes no sense to me. Nothing is “all of people.” Careers are only part of people, religion is only part of people, family life is only part of people, hobbies are only part of people, community engagement is only part of people, philosophical opinions are only a part of people, and so on. Every individual thing we do, believe, and engage in, every single interest we hold, is itself a “part” of who we are, not the totality of who we are. So arguing for the exclusion of people’s business needs in particular from consideration, on the grounds that it’s “only part of our lives” is just the logical fallacy of special pleading.
What we are saying is that though business is just a part of our lives, it’s a part that really matters. It has a huge impact on people. It represents years of their life, labor, their hopes, and their livelihoods. It’s important, and it deserves to be respected and taken into consideration, and politicians are wrong to treat them as worthless or undeserving of consideration. You seem to agree with this when you say:
But this is not what Ro was doing. To Ro, it was absolutely obvious which should win out. He dismissed, with contempt, the businesses that would be destroyed, the jobs that would be lost, and the livelihoods which would be ruined, as being entirely without value to anyone. No matter if they are lost, because they are something nobody wants. Aside from the cruelty of this mindset, it’s wrong. Factually wrong. People did want those jobs, people did want those businesses. Thinking the concerns and needs of those people deserve to be considered and treated as meaningful isn’t “playing politics,” it’s holding politicians to a minimal standard of human decency.
Jon Murphy
Feb 25 2021 at 8:29am
Agreed 100%. But that’s not relevant at all to anything said here.
Mark Bahner
Feb 24 2021 at 11:44pm
Every representative takes an oath of office that states:
Any reasonable and informed reading of the Constitution will find no power authorized to Congress to set a national minimum wage.
FDR himself knew that. He simply didn’t care. In fact, he thought it was funny to disregard *his* oath of office to “preserve, protect, and defend the Constitution.” He told Frances Perkins, his Secretary of Labor, when he thought the time was right to propose a national minimum wage:
“What happened to that nice unconstitutional bill you had tucked away?”
P.S. It’s absolutely appalling that a federal government website has that quote, as though it doesn’t matter a bit that the bill was unconstitutional.
Jon Murphy
Feb 23 2021 at 8:58pm
There’s an interesting element of the populist side of the minimum wage/livable wage movement (Like Ro) that is decidedly pro-big business. Consider these two arguments of the populists:
1) Minimum wage hikes won’t cost jobs because big corporations can afford to pay their workers more
2) If you cannot pay a livable wage, you’re exploiting workers and don’t deserve to exist as a business.
If we take both arguments as given and correct, they imply a pro-big business stance. If big businesses can afford the higher wages and firms that cannot do not deserve to exist, that would imply that, along the margin, small businesses would be unable to afford workers and shut down.
Phil H
Feb 24 2021 at 1:15am
Jon – I for one would definitely bite that bullet. I understand your point – mythologizing small businesses is very common, and those who do so should recognize that it’s not very compatible with high minimum wages.
Jon Murphy
Feb 24 2021 at 8:44am
Which would make you the only one.
My point isn’t so much about “mythologizing small businesses.” It’s about inconsistency in Left thought. They’ll talk about how evil monopolies/oligopolies are one second and then turn around and venerate policies that provide those monopolies/oligopolies with market power.
As an aside, there’s an interesting element I’d like to explore at some point. Monopsony power is a typical justification for minimum wage, but I wonder if the causality isn’t reversed. It’s not that monopsony causes minimum wage, but rather minimum wage causes monopsony.
robc
Feb 24 2021 at 10:40am
On your final point, I would say neither. My understanding from previous blog posts is that monopsony is rare to non-existent. It is a theoretical concept more than a real one.
Jon Murphy
Feb 24 2021 at 10:57am
That is my position as well, outside some very very rare circumstances
Thomas Hutcheson
Feb 23 2021 at 9:03pm
A better answer would have been to give workers higher EITC, but that the public does not understand that so “we” had to go with the higher minimum wage as a second best
MarkW
Feb 24 2021 at 5:34pm
At this point it’s not even that — the EITC is now actively opposed by many on the left because A) they think the EITC is a subsidy to Walmart, and B) they think it’s outrageous when anyone with any job is not paid enough to support themselves and their family (however large) without resorting to any safety net programs. All jobs, they apparently think, ought to be living-wage-for-a-family-of-four jobs or should not exist at all.
Mark Bahner
Feb 27 2021 at 12:19am
<blockquote>B) they think it’s outrageous when anyone with any job is not paid enough to support themselves and their family (however large) without resorting to any safety net programs.</blockquote>
When I was in high school, it was tremendously difficult to find a summer job. And that was when the minimum wage was under $3 an hour (equivalent to about $10 and hour, adjusted for the change in CPI). It seems to me that it would be spectacularly difficult to for a high school student to get a minimum wage of $15 today, in a poor rural town like I was in.
And that, to me, is one of the major problems with a $15 an hour minimum wage. It may be reasonable for wealthy big cities, but what about rural Louisiana or Mississippi? Especially, what about students doing summer work in those areas?
Vivian Darkbloom
Feb 24 2021 at 3:21am
That was a great title and photo to the blog post not only because I thought at very first glance that title was meant to be “L’Etat C’est Roi”.
David Henderson
Feb 24 2021 at 10:44am
Thanks, Vivian. I’m glad you caught that little subtlety.
David Henderson
Feb 24 2021 at 10:45am
Thanks to KevinDC and Jon Murphy above (especially KevinDC) for your careful arguments.
zeke5123
Feb 24 2021 at 11:27am
A point David Henderson has made I believe before but compensation is not just about pecuniary payments OR even fringe benefits — one goal of working is to improve human capital.
So someone working a minimum wage job isn’t just being paid in cash; the person is being paid in human capital. Sure, I don’t think the minimum wage will leave that job and join a Fortune 500 making 100,000K p.a. But working a minimum wage job for a year probably would result in an increase wage for year 2. At the very least, not getting fired signals something.
So maybe over five years the person starting out at the minimum wage will maybe be making a decent amount above the minimum wage because human capital has increased.
If you don’t let those businesses that employ low-skilled workers, then those low-skilled workers don’t have a chance to build human capital.
Presumably, the representative intuitively understands this point because I guess the representative probably hands out un paid internships. The difference is the unpaid internship is high-class; minimum wage job is generally low-class.
KevinDC
Feb 24 2021 at 11:35am
This is an important point as well. We want people to be able to improve their situation in life, but every journey has to start somewhere. Often the most difficult part is getting your foot in the door and taking that first step – especially if you come from a difficult background or have low or marginal job skills. Entry level jobs help people get their foot in the door, and let them start working towards improving their lives. Laws which create stronger and stronger barriers to entry at this first step are particularly pernicious, and the harm is overwhelmingly inflicted on the most vulnerable people.
Pierre Lemieux
Feb 24 2021 at 2:50pm
An important idea, succinctly expressed.
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