Art Carden reports from the Southern Economics Association conference on the eminent trade economist Jagdish Bhagwati speaking out against “fair trade” and minimum wages:
At the SEA meetings, Jagdish Bhagwati dismantled the rhetoric of “fair trade” and said something that will stick with me for a long time. I paraphrase here: movements advocating what is grossly and misleadingly called “fair trade” and movements advocating higher minimum wages are filled with people who imagine themselves fine human beings but who are actually busy (unwittingly) doing horrible things to the people they claim to love so much.
Bhagwati is one of the leading defenders of free trade, and his comment on “fair trade” is nothing new. But his criticism of the minimum wage, if Carden is correct in his reporting, represents a significant change in his position. For example, in an article at the New Republic Bhagwati wrote in favor of the Employee Free Choice Actin part because union membership lends political clout for the minimum wage:
Increased [union] membership also increases the political clout of the unions and, in turn, leads to support for raising the minimum wage, which liberal labor economists are convinced helps the lowest wages overall (though this issue does remain a source of animated controversy among liberal and conservative labor economists).
Despite his qualifier that the issue is controversial he is clear that he sees a higher minimum wage as a good thing, and is citing it as a reason to support more unions. This is in sharp contrast to his SEA statement that the minimum wage is “doing horrible things” to low income people.
If a full transcript of this is available, I would be very interested to read it.