Paul Krugman's recent call to raise the minimum wage is consistent with much of his liberal political writing over the past decade. But raising the minimum wage is not consistent with Krugman's writing as an economist. Those who care about the poor should pay more attention to Krugman the economist than to Krugman the liberal pundit.
Krugman uses the Christmas shopping season, and the fact that 60 percent of minimum wage workers are in sales or food services, to talk about the decline in the real wages of people working in retail. His solution to their problems: "We can raise the minimum wage."
But before we embrace the policy prescription of Krugman the pundit, let's ask the opinion of Krugman the economist. In his 1998 review of a book on living wages he wrote: "So what are the effects of increasing minimum wages? Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment."Krugman the economist should know. He co-authors an Econ 101 textbook. The 2008 edition clearly states, "when the minimum wage is above the equilibrium wage rate, some people who are willing to work--that is, sell labor--cannot find buyers--that is, employers--willing to give them jobs."
(ht Bryan T. Ripp)
LOL
ReplyDeleteSo if he knows that minimum wages kill jobs, why does he support them politically? Is it just to keep his creds with the crowd he runs with? Anyone have a theory and some evidence (theories alone being mostly worthless, including mine)?
ReplyDelete"So if he knows that minimum wages kill jobs, why does he support them politically? Is it just to keep his creds with the crowd he runs with?"
DeleteWhat governments need from economists like him is pseudo-scientific backing for policies they already want to implement. Krugman plays the role of the nobel-prize winning economist giving members of congress political cover to advocate for a minimum-wage increase--after all, he has a nobel prize.
In return Krugman gains fame and prestige, gets to continue writing a column in the New York times and who knows what else, Capitol Hill favors of various sorts no doubt.
So, no evidence.
DeleteThe fact that The Krugan gets a pay check is evidence that fraud is being committed.
Delete