If you look closely at the gut wrenching divisions of our time, most of them can be expressed as differences over “Tipping Points” and fears about “Slippery Slopes.” The Mandated Minimum Wage (MMW) is just one example.
Being conscious of these sub texts can help bridge some of the differences, at least among the few remaining policy makers who can still be persuaded by good data (relative to tipping points); or by good faith efforts to address fears over slippery slopes.
Pick just about any of the chasms in politics, or differences over economics, today, and you can see how they fit into the Tipping Points and Slippery Slopes framework. Debates about taxes and regulations boil down to differences about how much we can tax and regulate before entrepreneurs stop investing. Just about everyone agrees such a Tipping Point exists, but differences are great as to where it lies on the continuum.
Disagreement about the welfare state or size of government is more in the Slippery Slope category. The more benefits or “goodies” handed out — as proponents of small and limited government like to call it — the more people will want and demand. And the more we want and receive, the closer we get to unsustainable spending and lack of personal responsibility, or so the argument goes. Income inequality is yet another tipping point issue. How much of it can be tolerated before the overall economy suffers, or before a political system is destabilized?
Sovereign debt is mostly a Tipping Point issue, but with a Slippery Slope overtone. At some point, debt gets so large, servicing it crowds out other essential spending. Lenders exact usurious interest, so that borrowing more is all but impossible. The result is Greece. Again, everyone agrees there is a Tipping Point, but not about where it lies.
Climate change is of course the poster child for Tipping Points. That is where the concept is explicitly at the center of debate, and where its been popularized of late.
One way to think about the nature of gridlock and polarization today is that one side believes we’re already at various Tipping Points, while the other thinks we’ve got a ways to go. And, both sides seem to believe every policy change offered by the other. is on the very edge of a Slippery Slope, leading to an abyss, and a point of no return.
The Mandated Minimum Wage (MMW) is also a classic example of differences around Tipping Points and Slippery Slopes. The basic tipping point question for MMW is: “how high does the minimum wage have to rise before it truly or materially reduces employment and slows economic growth?” The basic Slippery Slope concern around MMW is: “If you raise the minimum wage today by a certain percent, or have it apply just to certain industries or types of work, what stops politicians from doing it again and again, in larger steps, and wider in scope?
What is the value of thinking about the MMW, or other contentious policies, from the Tipping Point and Slippery Slope standpoints?
For the remaining 39 people in America who can still be persuaded by facts and data, the Tipping Point perspective provides some common ground; or perhaps an ice-breaker in conversation. You can usually get even the fiercest opponents to agree that a Tipping Point exists (though not exactly where). Nonetheless, it can be reassuring that even your (“crazy”) opponent knows there are limits
Tipping Points also remind us that most policies are scalable, not dichotomous, binary, black and white; and thus subject to some tinkering, adjustment, negotiation. Yes, I understand those words are not in the vocabularies of very many politicians today. But giving up is not an alternative either.
One might argue that Washington addressed the Slippery Slope problem by not only establishing a new minimum wage in its 1998 Act, but providing the slope at the same time (maybe a slippery one?). But I see this as a safeguard, rather than a runaway train. It pegs the minimum wage to a time when the state was just about at “full employment” and adjusts it for inflation annually. In theory, at least, this is sustainable.
The Washington approach is not a full proof, guaranteed protection that policy-makers in Washington won’t raise the MMW faster than the law provides. In fact the small city of SeaTac, Washington, which lies between Seattle and Tacoma (get it?), passed a $15,00 minimum wage recently. It has limitations, and may not entirely survive continued litigation.
Having the slope built into law with nnual COLA adjustments prevents the state from going years without a change. Raising the MMW a knowable and predictable 2% a year, is a lot better than not doing anything for 15 years, then boosting it by 40% in one bite. At least one caveat: you really shouldn’t raise the minimum wage by 15% in a year when inflation is 15%. Not good for the dog to chase its tail. That can be put into law as well.
I understand that most conservatives won’t buy much of what I’ve argued here; and that liberals might say the old minimum wage idea is passe. For example, I made no mention of the “living wage” as the goal instead of a minimum wage. A mandated “living wage” is based on a calculation of how much money it takes for a person to achieve some specific standard of living. The goal of living wage legislation is to ensure that Americans who work full time are not living in poverty; that they are able to support their families without relying on public welfare.
There is a tax policy counterpart to the minimum and living wage concepts which has been supported by some of the most respected conservative economists in history (e.g., Hayek and Friedman). The idea has been known as a “Basic Income” (or negative income tax). It would likely be much more effective, while being less intrusive on market forces than a MMW or living wage.
I don’t usually use Wikipedia as a primary source, but here their description is especially clear and (almost) concise. “A Basic Income (or negative income tax) is a system of social security that periodically provides each citizen with a sum of money that is sufficient to live on. Except for citizenship, a basic income is entirely unconditional. There is no means test, and the richest as well as the poorest citizens would receive it. Proponents argue that a basic income based on a broad tax base would be more economically efficient, since the minimum wage effectively imposes a high marginal tax on employers.”
The current U.S. Earned Income Tax Credit (EITC) functions like a basic income or negative income tax. It could be tweaked so that it applied to more taxpayers or provided higher refunds. It would not be paid mainly by small business owners who employee lots of low wage workers. The costs and burdens would be broadly distributed. In today’s political climate, and with the nation’s sovereign debt challenges, expanding the EITC would require offsetting changes to the tax code, or spending cuts, to make it revenue and debt neutral. There are surely Tipping Points and Slippery Slopes to be addressed in an EITC approach as well.