Tuesday, January 14, 2014

Economists supporting minimum wages?

Some economists sign a petition in favor of higher minimum wages.  Link to article here

These economists are ignoring the most comprehensive research, by Neumark and Wascher, which provides a detailed and object review and analysis of the literature.  Neumark and Wascher do an outstanding job summarizing the scholarly articles that have studied minimum wages. (And they find that the "consensus" is that minimum wages are damaging in many ways.)

These economists who signed the petition also ignore new scholarly work that shows that the biggest effect of the minimum wage is in the long term, which won't be easily estimated in the short run (which most studies are).

Many of these economists just ignore or place a lower weight on the evidence above.  I don't have as much of a problem with them, as this is a scholarly disagreement. Many of these people, however, are putting their politics ahead of objective research.  That isn't good.

This graph says all you need to know about the effects of the minimum wage:

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