Ardon in this piece argues that there should be a single global minimum wage and he thinks this will improve things in the world and stop migration, because everyone can earn a nice fat wage back home. Now let me explain. The minimum wage is the Number One creator of unemployment in industrial economies because it prices low-skilled workers out of the market. If a low-skilled worker is incapable of doing any work worth more than $3 an hour, that is - for which an employer will voluntarily never pay more than $3, then a law requiring employers to pay this person $5 are equivalent to a decree that the person remain permanently unemployed. The minimum wage law is why black teenagers in the US have astronomical unemployment rates, although they had unemployment rates LOWER than for whites back in the 1950s before the minimum wage law was passed. Israel’s own minimum wage law, requiring that workers get the same minimum wage required in the high-wage USA, is the main reason for Israel’s own 9% unemployment rate.

Ardon now wants a global minimum wage rate. This means that in countries in the poorer parts of the Third World where there are NO people whose work skills allow them to perform work worth more than a few dollars a day (and sometimes not even a few dollars a month), where NO ONE makes more than a few dollars a month unless they are cronies of the regime, employers will also be required to pay workers maybe $5 an hour. Which means such a law would condemn entire poor countries to eternal 100% unemployment. Ardon realizes that there just might be a problem with getting employers to pay to such unskilled people US-style wages, but he thinks the $5 per hour wage can be imposed by threatening boycotts of employers who do not pay it. Of course, employers who DO agree to pay the $5 per hour Ardon wage will never hire anyone nor produce anything and so could not give a darn if anyone boycotts the products they will never produce. Ardon the chemist believes in magic and alchemy, which is why he thinks people whose labor is worth a few cents an hour can be suddenly paid $5. Perhaps he has been smoking some of his laboratory materials.

In other words, Ardon’s article is one of the very stupidest things ever to be written on paper. What is more important, his spilling his ignorance onto the pages of the Herald Tribune illustrates a different problem, the proliferation of extremely stupid people in professor slots hired at Israel’s politicized and nationalized universities, and making a mockery our of Israeli higher education in the world media. These are people convinced that - by definition - they know everything, so a chemistry professor who could not pass freshman economics makes a spectacle of himself in the Herald Tribune with a new "theory". The complete absence of any sense of personal shame or modesty is not limited to the Hebrew University’s chemistry department, of course. But Ardon’s determination to broadcast to the world his stupidity and ignorance is as good a reason as any for why anyone thinking about making a donation to the Hebrew University might give the idea second thoughts.

Steven Plaut

You can e-mail your comments to Steven at splaut@econ.haifa.ac.il

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