The minimum wage argument

Jane Galt tackles the pro and con arguments around raising minimum wage levels:

There's a sort of nostalgia halo around policies like the minimum wage. Minimum wages and unionization were high in the 1950's; income inequality was low; therefore if we implement the former, we will produce the latter result. But it seems at least as plausible that unionization and the high minimum wage were the result of high demand for labour, which also caused income inequality to shrink. If this is true, enacting the minimum wage, or getting the NLRB to beat up on companies, will be no more effective at bringing back those halcyon days of income compression than resurrecting Burma Shave billboards across the land . . . and considerably less entertaining.

We are finally starting to get a hazy idea about which poverty programmes solve more problems than they create. Given the huge questions about its effectiveness, and its obvious inferiority to programmes such as the EITC, it's hard to understand why raising the minimum wage is even in the standard liberal policymaker's toolbelt.