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Ontario passed legislation to increase Ontario’s general minimum wage from $11.60 per hour to $14 per hour on January 1, 2018 and then to $15 per hour on January 1, 2019. Increases in the minimum have always been contentious with business arguing against them. In October 2006, the Economic Policy Institute (EPI) in the USA released a formal statement titled “Hundreds of Economists Say: Raise the Minimum Wage” signed by 659 economists including 3 four Nobel Prize winners in Economics and other leading economists. Daniel Klein, an Economics professor at George Mason University in Virginia and editor of the journal, “Econ Journal Watch”, sent a questionnaire to all 659 signatories which, among others, asked them to respond to the following statement: Daniel Klein: “In one manner of speaking, liberty is a freedom from political or legal restrictions on one’s property or freedom of association. Subscribers to this definition are apt to say that the minimum wage law is coercive because it (along with concomitant enforcement) threatens physical aggression against people for engaging in certain voluntary, consensual acts (namely, employing people at sub-minimum wages). (Notice that even subscribers to this definition of liberty recognize that it does not itself carry a policy recommendation; values other than liberty exist and might conflict with it.)” Below is a response by one of the economists to the Klein’s statement: William Waller: “Liberty is freedom from political or legal restrictions on one’s property or freedom of association as long as this behavior involves no involvement or impact on any nonconsenting third party. Once social, cultural, or political institutions are involved in supporting, facilitating, or creating an environment for this behavior, then it is legitimate, indeed required, that a larger notion of the public interest be considered in the behavior. Since no legal employer/employee relation of which I am aware exists that does not involve currency, use of the postal services, use of roads, payment of taxes, etc, the definition of liberty is not in my view encumbered by this question.” Here is another response to Klein’s statement: Michael Sattinger: “I think the definitions of property rights (and rights in exchanges) are essential for markets and liberty. Property rights inevitably benefits some and harm others, so the coercion referred to would be inevitable. Not raising the minimum wage would also be coercive according to the definition of liberty proposed above.” (i) What is the fundamental difference between Michael Sattinger’s argument and William Waller’s argument? Carefully explain answer. (ii) Michael Sattinger and William Waller both seem to accept Daniel Klein’s definition of liberty but then reach a different conclusion from Klein’s? Would you describe them (i.e., Sattinger and Waller) as deontologists or welfarists/utilitarians? Explain.
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