Friday, January 22, 2021

The Attack From the Left Against Economists Who Warn of the Dangers of Minimum Wage Laws

Tyler Cowen writes:

I am sorry to speak in such terms, but the reality is that an allied cabal of activists and left-wing economists have combined on social media to insist on a particular approach to minimum wage economics and to bully those who disagree.

Cowen also points to sound minimum wage commentary by Michael Strain at Bloomberg:

 It’s a slam-dunk case that doubling the federal minimum wage — it’s been $7.25 since 2009 — would lead to significant declines in employment opportunities for workers with few skills or little experience. According to data from the Bureau of Labor Statistics for 2019 (before the pandemic), in 47 states, at least one-quarter of all workers earn less than $15 per hour. In 20 states, half of all workers earn less than $18 per hour, and in 30 states, the median hourly wage is less than $19.

These statistics show that $15 is a very high wage floor. For employers to keep all their workers would require raising the wages of a huge share of the national workforce. But the number of workers affected would be so large that this wouldn’t happen. Instead, the number of jobs in the low-wage workforce would shrink.

The nonpartisan Congressional Budget Office confirms this basic intuition, estimating that joblessness would increase by 1.3 million if the national hourly wage floor were hiked to $15. The CBO also concluded that this policy would reduce business income, raise consumer prices and reduce gross domestic product.


1 comment:

  1. Yes, all true, but...we got rid of Trump and that was all that mattered, correct?

    Two ancient Chinese Maledictions:

    1. May you get what you want.
    2. May you live in interesting times.

    I suppose that by quoting these I could be accused of collaborating with the Chinese. "Off to the Gulag with you, Charlie".

    At least we got rid of Trump...That's all that mattered.