After reading the recent pieces by Carson and Massimino on a $15 minimum wage, I’m left wondering why this issue is being addressed in a for/against manner. Carson and Massimino make some fair points, but ultimately they’re arguing about a policy that at best still falls far short of the potential for radical wealth redistribution represented by more definitively market anarchist policies and at worst represents a burden barely distinguishable from any of the innumerable state inflicted injuries perpetrated against low wage workers every day.

Contra Carson, I don’t think the fact that some late 19th century anarchists were affiliated with a labor reform movement is an imprimatur for anarchist involvement in the Fight for $15 campaign. And though it’s certainly encouraging to see the organizing efforts of the unconventional labor organizations Carson mentions, their goal of having the state impose a $15 minimum wage is ultimately at odds with market anarchist principles. Carson does make a point of stating that he “is not interested in working through the state to impose a higher minimum wage”, but if that’s really the case, what sort of support does Carson suppose anarchists should give to the existing Fight for $15 campaign?

Carson’s economic arguments are more or less sound.  Given the various constraints on the market imposed by the corporate state; knowledge problems faced by employers in calculating optimal wages; and a host of other confounding variables, most workers’ wages (or at least the purchasing power of those wages) are likely less than than what they would be in a freed market. Carson fails, however, to explain why any of this would lead an anarchist to support the Fight for $15 campaign over fighting the state imposed factors which suppress wages.

Massimino, though, goes too far in opposing Carson.  He doesn’t fully appreciate just how unfree the market is and how, given current conditions, a minimum wage is far from the unambiguous affront to the working poor that many right libertarians would make it out to be.

Yes, oligopolists facing a higher minimum wage would try to offset their costs by increasing prices or reducing expenses, but their ability to do is actually quite limited. According to Neumark and Wascher: “Both because of the relatively small share of production costs accounted for by minimum wage labor and because of the limited spillovers from a minimum wage increase to wages of other workers, the effect of a minimum wage increase on the overall price level is likely to be small.” Estimates vary, but it isn’t unreasonable to think that a 10% increase in minimum wage would produce something like a 1% increase in prices.

As for discovering marginal productivity, Massimino claims that every individual worker has a different marginal productivity and that only one on one negotiation can lead to the proper wages for the labor being performed.  But we’ve already conceded that we’re not working in a free market. One on one negotiation is fine for getting a higher wage relative to your co-workers, but on average everyone will be making less than what they likely ought to be making – given the oligopolists’ enhanced bargaining power – unless the workers employ collective bargaining. Simply put, a wage floor is suboptimal, but less so than the “free” negotiation currently available to minimum wage workers.

Massimino, next claims that “the data is in” on unemployment.  And he is technically correct – the best kind of correct. The minimum wage will likely cause unemployment to the tune of three quarters of one percent among teenage workers. Starting with Card and Krueger’s 1993 paper, the empirical literature, even from the most critical opponents of the minimum wage, has only been able to find small unemployment effects.  When weighed against the increased income that low skill workers would get from a higher minimum wage, it is understandable how such a tradeoff might be reasonable.

Finally, both Carson and Massimino resolve that the state shouldn’t be involved in setting wages and that worker-owned enterprises should solve this whole problem. Great, so why are we even having this discussion? What irks me about the debate between Carson and Massimino is that, from an anarchist perspective, the only question that should have been asked in regards to such a mildly reformist policy like a slightly increased minimum wage is “How does this policy change what we’re doing to smash the state?”

That question presents some challenges.

People overwhelmingly support a raise in the minimum wage; that’s not likely to change anytime soon. So, in spite of a state-mandated minimum wage increase being totally antithetical to anarchist principles, we’re not going to make any friends among the general public by actively opposing it. Moreover, there’s a decent probability that an increase in the minimum wage is one of those rare instances of the government handing out crutches for all the legs it’s broken.  Now, maybe in the long run, ceteris paribus, an increase in the minimum wage will lead to all the terrible outcomes its opponents claim, but we’re not planning to have all other things be equal, are we?  Our challenge, in the event that the minimum wage is truly beneficial, in the short term at least, is to convince its beneficiaries that it was a truly modest gain compared to what they could have in a stateless society.

However, the possibility of a short term improvement in the welfare of the working class does not mean that we should align ourselves with the Fight for $15 campaign.  Sadly, the passage of minimum wage legislation isn’t likely to be seen as the bandaid on a sucking chest wound that it is.  The beneficiaries of an increased minimum wage will believe that it is proof that the political process can give them everything they’ve wanted if they just keep at it and vote in the right people, and the number of the disemployed will be sufficiently small that it will be easier for them to advocate for more welfare benefits than for minimum wage repeal. State intervention begets state intervention.  This alone, in my opinion, is nearly reason enough to oppose the minimum wage.  I think there may be a better option though.

Since minimum wage increases will almost certainly push some workers into the informal sector, our focus as market anarchists should be to find ways to minimize the potential harms of labor.  Worker-owned cooperatives are definitely part of the solution, but the costs of organizing aren’t negligible. We also need to develop crypto-markets akin to a hybrid of the Silk Road and TaskRabbit which can match workers with employers while assuring each of the other’s reputation. This would simultaneously help those negatively affected by the minimum wage while building the groundwork of counter-institutions necessary to foment a transition to statelessness.

So, a market anarchist position on minimum wages should be a strategic one, not one of endorsement or opposition. Carson and Massimino, with all due respect, have treated the minimum wage in much the same way that mainstream politicians and pundits might – relying on its ambiguous effects to stage a very distracting piece of economic theatre – while largely failing to investigate the courses of action that might be taken to fight the state while responding to both the potential costs and benefits of the policy.