Living Wages and Moribund Arguments

Julian Sanchez | January 16, 2006

Café Hayek has a great series of posts—one, two, and three—on this week's New York Times Magazine cover story about "living wages." The final post makes the point that first struck me when I saw the piece: It was accompanied by a series of photos of low-wage workers, captions detailing their prior and new wages and their plans for the "extra" money, on the blithe assumption that employers facing higher labor costs won't either lay off workers or, as likely, roll back hours to the point where total payroll isn't appreciably higher than before. That's not to say there won't be net gains for some or even most workers, but calculating a new per-worker income by multiplying the old hours by the new wages seems crude and silly.