Thursday, March 13, 2014

More Than 500 Economists Slam Minimum Wage Hike as a Jobs Killer

Five hundred economists, including three Nobel laureates, on Wednesday urged Congress to junk President Obama's proposal to boost the minimum wage to $10.10, claiming it will cut jobs and raises prices, reports The Washington Examiner.

The letter is actually a mixed blessing, although it does highlight the problems with minimum wages, it also states that poverty is a "complex issue that demands a comprehensive and thoughtful solution that targets those Americans actually in need."  Whatever the hell that means.

Among the signers were Nobel laureates Vernon Smith, Edward Prescott and Eugene Fama, and George Shultz, who was secretary of State, Treasury secretary. I didn't spot any libertarians or Austrian school economists among the group.

The entire letter and signers can be found here.

(ht Travis Holte)


  1. Yes, I dislike appeal to authority, even when I agree with the claim.

  2. Raising the minimum wage to 10.10 will kill 500,000 jobs and raise wages for 16.5 million. The problem is raising wages for 16.5 million. That means lower profits and less money for the people at the top. Remember the #1 problem is that rich people do not have enough money. IF rich people have more money, everyone is better off even if your paycheck is lower and your rent is higher.

    basic math:
    average person worse off = rich people better off = average person better off.

    1. This is pathetic, is this the best you got lusting like a cannibal for somebody else's money?? Please STAHP..You are really embarrassing yourself, I threw an OPEN CHALLENGE to you in the previous thread and you rolled over by failing to come up with something remotely Statist as the John Law quote earlier.

      Like I said you are a complete waste of my tax money for the govt's internet trolling programme exposed by Glenn Greenwald. Seriously, kill yourself mate - shame on you!

      If you have an iota of self-respect and dignity remaining after this then DO IT...I don't hear the gunshot, c'mon mate pull the trigger. Tell you what - I didn't think you had the balls to do it...tut disgrace!

  3. You've been well trained by the Koch Bros.

  4. Not surprisingly the amateur Wolfie boy does not factor in the people currently unemployed due to the existing wage floor and he also ignores the large percentage of the 16.5m people that will quickly find their way to the unemployment line as their jobs are replaced by cheaper and more efficient alternatives derived from technological advances.

    Poor JW. Still barking in the basement of the unenlightened.

  5. Does he really think any of the "1%" are going to take a haircut because of a hike in min wage? Really?
    Oh, wait, that's right I forgot because there's no inflation of prices so yeah, since prices won't go up to cover costs then yessirree profits will be lower!

  6. ALL the dumbocRATS will vote for the minimum wage increase. If it fails because of the Republicans, they will look like the big evil meanies, ensuring defeat in 2014. The dumbocRATS will beat them senseless with this from now until election day 2016.


  7. Excluding Inferior Workers:
    Eugenic Influences On Economic Reform In The Progressive Era
    by Tim Leonard

    Slide 44
    VIII. The Eugenic Benefits of Minimum-Wage Laws

    Minimum-wage legislation, passed by several states beginning with Massachusetts in 1912, was the sine qua non of progressive labor reform, and progressive economists championed minimum wages.

    But eugenically minded progressives advocated minimum wages precisely because binding minimums would cause job losses.

    They argued that minimum-wage-induced job loss was a social benefit because it performed the eugenic service of ridding the labor force of the “unemployable.”

    Sidney and Beatrice Webb, as ever, put it plainly: “With regard to certain sections of the population [the unemployable], this unemployment is not a mark of social disease, but actually of social health.” “[O]f all ways of dealing with these unfortunate parasites,” Sidney Webb opined, “the most ruinous to the community is to allow them unrestrainedly to compete as wage earners . . . .”

    Slide 45
    VIII. The Eugenic Benefits of Minimum-Wage Laws (2)

    Henry Rogers Seager leading progressive economist, argued that deserving workers needed protection from the “wearing competition of the casual worker and the drifter” and from the other “defectives” who drag down the wages of more deserving workers.

    Seager made clear what should happen to those who, even after remedial training, could not earn the legal minimum: “If we are to maintain a race that is to be made of up of capable, efficient and independent individuals and family groups we must courageously cut off lines of heredity that have been proved to be undesirable by isolation or sterilization . . . .”

    A.B. Wolfe, an American progressive economist and future AEA president, also argued for the eugenic virtues of removing from employment those who are “a burden on society.” “If the inefficient entrepreneurs would be eliminated [by minimum wages,] so would the ineffective workers,” said Wolfe. “I am not disposed to waste much sympathy upon either class. The elimination of the inefficient is in line with our traditional emphasis on free competition, and also with the spirit and trend of modern social economics.”

    Slide 46
    VIII. The Eugenic Benefits of Minimum-Wage Laws (3)

    For economic progressives, a minimum wage, which is a wage floor, had the useful property of segregating the unfit, who would lose their jobs, from the deserving workers, who would not.

    Royal Meeker, a Princeton economist who served as Woodrow Wilson’s Commissioner of Labor, opposed subsidies of poor workers’ wages because wage subsidies increase employment. “It is much better to enact a minimum-wage law, even if it deprives these unfortunates of work,” argued Meeker.

    Labor Commissioner Meeker argued, “Better that the state should support the inefficient wholly and prevent the multiplication of the breed than subsidize incompetence and unthrift, enabling them to bring forth after their kind.”

    As with immigration restriction, the minimum-wage barrier was seen to meet the two-fold threat of inferior workers: it protected deserving workers’ wages by reducing the competition of inferior groups, and it identified (by disemploying) inferior groups, enabling eugenic treatment.

    [I can't fit Slide 47 into the comment, unfortunately.]