October 10, 2019 - 1:30 pm
AddressBurlington Art Gallery View map
Most government initiatives for addressing inequality require that the government has revenue – to fund the initiative. Whether or not the program delivers its intended effects can very much depend on whether the direct benefits of the policy are bigger or smaller than the indirect costs that are imposed on the intended beneficiaries as a result of the associated taxes. This lecture focuses on how this indirect cost can be minimized. This is a big challenge in the modern world due to globalization. Capitalists can shift the location of their capital so that it is employed in low-tax countries, while unskilled workers cannot relocate across international borders. This fact makes it is very difficult for governments to tax the rich (the owners of most of the capital). How can governments help the unskilled if the only group that the government can tax is unskilled labour? Anti-globalization protesters have focused on this challenge for some years now and they have reached two (quite different) conclusions – first, that governments should erect international barriers to reverse the international mobility of capital, and second, that governments should focus on policy initiatives that do not require any tax revenue – such as increasing the minimum wage law. This lecture explores both the globalization challenge and the effectiveness of increases in the minimum wage.