Who Pays for the "Social Cost" of Labor?


  • Rojhat B. Avsar Columbia College Chicago




Minimum wage, morality, evolution, institutionalism


Although the minimum wage is one of the most commonly researched subjects, its treatment by economists has remained inadequate and led to misconceptions regarding its role in modern society. This philosophical piece offers a rebuttal to the conventional merit-based objection to the minimum wage and puts forward alternative lenses through which the moral appeal of the minimum wage should be (re-)evaluated. We argue that our evolutionary heritage can help us demystify the persistent popular support behind the minimum wage laws. In our framework, the minimum wage laws will be viewed as instrumental in meeting the "basic needs" of those who are offering productive contributions. The approach taken in this paper will supplement and modify old institutionalist framework and equip it with proper moral foundations.


Avsar, R. B. 2014. “Foreclosure Crisis and Innovative Policy Responses: A Constructive Critique”. Journal of Economic Issues, 48(1): 155-168.
Brennan, G. and Loren L. 1993. Democracy and Decision: The Pure Theory of Electoral Preference. Cambridge: Cambridge University Press
Boehm, C. 1999. Hierarchy in the Forest: The Evolution of the Egalitarian Behavior. Cambridge: Harvard University Press.

Bowles, S. and H. Gintis 1998. “Is Equality Passé?” Boston Review, December 1.
Brown, C. 2005. “Is There an Institutional Theory of Distribution?” Journal of Economic Issues, 39(4): 1-17.
Brown, D. E. 1999. “Human Nature and History.” History and Theory 38(4): 138-157.
Card, D. and A. B. Krueger. 1997. Myth and Measurement: The New Economics of the Minimum Wage. Princeton: Princeton University Press.
Cashdan, E. 1989. “Hunters and Gatherers: Economic Behavior in Bands”. In Economic Anthropology ed. Stuart Plattner. Stanford: Stanford University: 21-48.
Champlin, D. P. and J. T. Knoedler 2004. “Wages in the Public Interest: Insights from T. Veblen and J. M. Clark” in Institutionalist Tradition in Labor Economics (Eds.) Champlin, D. P. and J. T. Knoedler. Armonk: M. E. Sharpe.
Clark, J. B. 1913. “The Minimum Wage”. The Atlantic Monthly 112, 289-97.
Clark, J. M. 1923. Studies in the Economics of Overhead Costs, Chicago: University of Chicago Press.
Corning, P. 2011. The Fair Society: The Science of Human Nature and the Pursuit of Social Justice. Chicago: University of Chicago Press.
Daly, L & G. Alperovitz. 2008. Unjust Deserts: How the Rich Are Taking Our Common Inheritance. New York: The New Press.
Ehrenreich, B. 2011. Nickel and Dimed: On (Not) Getting By in America. London: Picador.
Faravelli, M. 2007. “How context matters: A survey based experiment on distributive justice”. Journal of Public Economics, 91(7): 1399-1422.
Frohlich, N., J A. Oppenheimer & C. L. Eavey 1987. “Laboratory Results on Rawls's Distributive Justice”. British Journal of Political Science, 17(1): 1-21.
Gladwell, M. 2011. Outliers: The Story of Success. New York: Back Bay Books.
Kaufmann, B. E. 2010. “Institutional Economics and the Minimum Wage: Broadening the Theoretical and Policy Debate”. Industrial and Labor Relations Review, 63(3): 427-453.
McKenna, E. J. & D. C. Zannonia. 2011. “Economics and the Supreme Court: The Case of the Minimum Wage”. The Review of Social Economy, 69(2), pp.189-210.
Polanyi, K. 1968. “Societies and Economic Systems.” In G. Dalton (ed.) Primitive, Archaic and Modern Economies: Essays of Karl Polanyi. Hutchison Publishing: London. pp. 3-25.
Prasch, R. E. 1996. “In Defense of the Minimum Wage.” Journal of Economic Issues, 30 (2): 391-397.
Prasch, R. E. 1999. “The Economics and Ethics of Minimum Wage Legislation.” The Review of Social Economy, 57(4): 466-487.
Rawls, J. 1974. “Some Reasons for the Maximin Criterion”. American Economic Review, 64(2): 141-46
Roosevelt, F. D. 1937. “Message to Congress on Establishing Minimum Wages and Maximum Hours”. Available at http://www.presidency.ucsb.edu/ws/?pid=15405 (Accessed on December 16, 2014)
Sahlins, M. 2006. “The Original Affluent Society"". The Politics of Egalitarianism: Theory and Practice, ed. Jacqueline Solway. NY: Berghahn Books: 79-98.
Webb, S. 1912. “The Economic Theory of a Legal Minimum Wage”. Journal of Political Economy. 20(10): 973-998.
Waltman, J. L. 2000. The Politics of the Minimum Wage. Chicago: University of Illinois Press.
Wilkinson, T. M. 2004. “The ethics and economics of the minimum wage”. Economics and Philosophy, 20(2): 351-374.