Sunday, July 19, 2015

There is indeed evidence – and lots of it – that raising the minimum wage costs jobs, even when the starting point is as low as it is in America

See No Evidence of Distortion? by Don Boudreaux of Cafe Hayek. Excerpt: 
"There is indeed evidence – and lots of it – that raising the minimum wage costs jobs, even when the starting point is as low as it is in America.

David Neumark and William Wascher have done several empirical studies, all highly technical and careful, that find disemployment effects of raising the minimum wage.  (They’ve even published a book in 2010 with the MIT Press on this matter.)  UC – San Diego economists Jeffrey Clemens’s and Michael Wither’s recent study – containing evidence that Krugman says doesn’t exist – is much-cited.  Jonathan Meer (of Texas A&M) and Jeremy West (of MIT) also have recently offered evidence that Krugman says is non-existant.  Cornell’s Richard Burkhauser and American University’s Joseph Sabia are also among the economists who’ve recently found evidence the existence of which Krugman denies.  Indeed, even the Congressional Budget Office, just this past February, presented evidence to support its prediction that a hike in the U.S. minimum wage to $10.10 per hour would destroy 500,000 jobs, and destroy 100,000 jobs if it is raised to $9.00 per hour.

Now Krugman surely does dispute this evidence (which is fair).  But for him to say that no such evidence exists is….  well, perhaps he’s the victim of a terrible copyeditor.  Let’s hope that the New York Times in the future is more careful about editing Mr. Krugman’s columns so as to ensure that his intended meaning isn’t lost in the final product."

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