Here's the latest from NYT's Paul Krugman minimum wage increases are "actually good policy." How does he reach this conclusion. He starts off:
I’m doing this kind of backwards...I agree with him on this point.
But, then he goes on:
First, as John Schmitt (pdf) documents at length, there just isn’t any evidence that raising the minimum wage near current levels would reduce employment. And this is a really solid result, because there have been a *lot* of studies.Here, Krugman is using sloppy and improper methodology. Both Albert Einstein and Richard Feynman would laugh at him for trying to pull this off.
From there, using bad scientific methodology, he goes on to deny a praxeological deduction:
We can argue about exactly why the simple Econ 101 story doesn’t seem to work, but it clearly doesn’t — which means that the supposed cost in terms of employment from seeking to raise low-wage workers’ earnings is a myth.This is no different than saying:
We can argue about exactly why the simple story "1 plus one equals two" doesn’t seem to work, but it clearly doesn’t — which means that the supposed adding of one and one to come up with two is a myth.Murray Rothbard explains precisely the truth, which Krugman is trying to deny:
All demand curves are falling, and the demand for hiring labor is no exception. Hence, laws that prohibit employment at any wage that is relevant to the market (a minimum wage of 10 cents an hour would have little or no impact) must result in outlawing employment and hence causing unemployment.
If the minimum wage is, in short, raised from $3.35 to $4.55 an hour, the consequence is to disemploy, permanently, those who would have been hired at rates in between these two rates.[...]
The advocates of the minimum wage and its periodic boosting reply that all this is scare talk and that minimum wage rates do not and never have caused any unemployment. The proper riposte is to raise them one better; all right, if the minimum wage is such a wonderful anti-poverty measure, and can have no unemployment-raising effects, why are you such pikers? Why you are helping the working poor by such piddling amounts? Why stop at $4.55 an hour? Why not $10 an hour? $100? $1,000?
It is obvious that the minimum wage advocates do not pursue their own logic, because if they push it to such heights, virtually the entire labor force will be disemployed. In short, you can have as much unemployment as you want, simply by pushing the legally minimum wage high enough.