It, the rise in wages, is not incompatible with increasing unemployment, but neither is it incompatible with rising employment. Sowell, or whoever wants to argue this point from the right, makes a superficial cause and effect between wage rates and employment levels, where there is none.
And by the way, its is the creation of such superficial cause and effect links, and the propagation of them as profound economic insights that defines a hack. ----- Original Message ----- From: "Doug Henwood" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Thursday, July 01, 2004 9:16 AM Subject: Re: [PEN-L] Sowell > Grant Lee wrote: > > > > The wonders of the internet. Here is Sowell explaining his shift away > >from Marxism: http://www.salon.com/books/int/1999/11/10/sowell/index1.html > >> > >> David Shemano > >> > > > >From that interview: > > > >"So you were a lefty once. > > > >Through the decade of my 20s, I was a Marxist. > > > >What made you turn around? > > > >What began to change my mind was working in the summer of 1960 as an intern > >in the federal government, studying minimum-wage laws in Puerto Rico. It was > >painfully clear that as they pushed up minimum wage levels, which they did > >at that time industry by industry, the employment levels were falling. I was > >studying the sugar industry. There were two explanations of what was > >happening. One was the conventional economic explanation: that as you pushed > >up the minimum-wage level, you were pricing people out of their jobs. The > >other one was that there were a series of hurricanes that had come through > >Puerto Rico, destroying sugar cane in the field, and therefore employment > >was lower. The unions preferred that explanation, and some of the liberals > >did, too." > > So how is incompatible with Marxism that raising wages above market > levels can reduce employment? He just decided that the living > conditions of sugar workers were less important than the needs of > "the economy." > > Doug
