There's been a lively minimum wage debate this week over at Cafe Hayek. Long entries with tons of comments.

Best argument either pro or con, IMHO:

You're [Don Boudreaux] right, of course. What you might have added is that supporters of minimum wages themselves are selective readers of Card and Krueger. They say (p280 in my copy of of Myth and Measurement) that the impact of minimum wages upon poverty is "statistically undetectable."
Does any advocate of minimum wages really believe they are a better way of reducing poverty than a basic income or negative income tax?

Worst:

The strength of the Law of Demand comes from its strictness, embodied in the familiar phrase "ceteris paribus". For example, the perennial exception to the LoD that gets trotted out is the (largely hypothetical) Giffen Good. This is a good where raising the price increases consumption because it crowds better goods out of one's budget. Giffen Goods are NOT actually an exception to the LoD because they violate ceteris paribus in that the individual's income has changed. (Note that this is a pet argument of mine and not the consensus view.)

I find it beneficial to sort through all the arguments again every time Congress considers increasing the minimum wage. Personally I think the debate has shifted away from whether MW helps/hurts the poor. If it hurts (which it almost certainly does on net), the magnitude is fairly small and there are lots of compensating factors/opportunities in this dynamic economy. Rather, the debate is now whether economic theory still has bite for policy analysis. If interventionists can chip away at the law of demand on this point, that opens up a lot of doors (e.g., progressive taxation, safety regulation, you name it). Personally I oppose MW more on natural rights and slippery slope arguments than on harm to unskilled labor. But it's like my dissertation advisor used to say with a grin. "Ed, if we don't defend homo economicus, who will?"

One more observation. A well known counterpoint to the law of demand is price as an indicator of quality. I find it pretty interesting that Tyler Cowen not only eschews evidentiary arguments against MW, but also predicts the main effect of MW is on job quality.

If minimum wages go up, I expect some mix of two scenarios:
1. The employer restores the previous net wage by worsening working conditions.
2. The employer upgrades the quality of job and thus marginal products, to meet the new level of minimum wage.

That is all. I'm off to Burger King.