But it does. Charles Lane at Kaplan:
Yet in July, the federal minimum wage went up as planned, at the cost of 300,000 jobs, according to one economist’s estimate.
As it happens, the employment-reducing effect of minimum wage laws is abundantly documented. Those who take issue with my suggestion are taking issue with that evidence.
The literature is thoroughly compiled and reviewed in “Minimum Wages and Employment,” a 184-page article published three years ago by economists David Neumark and William L. Wascher in Foundations and Trends in Microeconomics, a peer-reviewed journal.
The guy who wrote the editorial in the Wall Street Journal in the first link is one of the co-authors to the second. Can’t Lane find more anti-minimum wage economists? And, for God’s sake, “peer-reviewed journal”, like that was some kind of a trump card?
Think Progress pointed out:
almost all of the economic research on the subject shows that the minimum wage has little to no effect on employment. The most well-known researchers on the subject — David Card and Alan Krueger — examined a minimum wage increase in New Jersey, and found that “employment actually expanded in New Jersey relative to Pennsylvania, where the minimum wage was constant.”
And here’s Paul Krugman saying the same thing.
So Lane’s critics present a huge body of evidence undermining his claims and he trots out one guy from UC Irvine and one peer-reviewed article and pretends that refutes it all?
This is so pathetic that I can’t even wrap my head around it.
I try not to hate. I try. But I can’t succeed with Charles Lane.
Update. I hate to get so worked up as this, but it’s just absurd! Lane finds two articles (one of which is just a WSJ piece), with one guy authoring or co-authoring each, and thinks this is something definitive. An idiot part-time blogger like me can find links to five, including the classic study on the subject (EDIT: which is not accepted by some economists, especially conservative ones) and a piece from a Nobel Prize winner, saying the opposite in ten minutes.
How long did he spend on this rebuttal?
Update update. The point here is not that Lane is an asshole for suggesting we lower minimum wage. Nor is to cast aspersion on the work of David Neumark, the economist whose work he cites.
The point here is that Neumark is an economist, who (rightly or wrongly) has made a career of criticizing minimum wage laws (his conclusions, based on my skim, are not simplistic). It’s simply nuts to hold up his work as the consensus of the entire field, especially since critics of Lane’s original article held up a large body of work by various authors who hold different positions on the issue.
Mike Kay
Does Charles Lane think rising bonuses on Wall Street reduces jobs?
beltane
If tools like Charles Lane had their wages cut to, say, $2 an hour it would be a good thing for the country. I can think of nothing more edifying than the spectacle of watching a bunch of right-wing economists fighting over a scrap of rancid bologna one of them pulled from a dumpster. That is something I would gladly pay to watch.
Amy
A 184 article that’s part of a peer-reviewed journal? Either economists have articles that are far longer than any other academic discipline
or
Lane is confused.
Mike Kay
Charles Lane = former editor-in-chief of the Neo-Con rag, The New Republic
DougJ
Neo-Con rag, The New Republic
They’ve been excellent on HCR, FWIW.
d0n camillo
I’d love to see some of these pricks like Charles Lane actually have to live in the world they’re trying to create. Can you see Jonah Goldberg having to present his resume and do a real live job interview with a real live employer? He’d melt into a puddle of urine and flop sweat. Not that any real employer would ever bother to interview him.
Nylund
I’m a Ph.D. candidate in economics, so I’m no “real” economist yet, but I read this and thought, “Huh, that’s news to me!”
I also recall a paper from a few years back studying the effects of minimum wage laws across another set of state borders. I think it was somewhere in the northwest, maybe Idaho and Washington? I do remember that it found that the state that increased the minimum wage saw an increase in employment. I could go into the details of the mechanisms at play, but suffice it to say that despite Mr. Lane says, my experiences in grad school has led me to believe that this is far from a decided topic, at least amongst those that look at things empirically and don’t merely assume what must really happen based on simplistic econ 101 thought experiments.
PS. I’m at a pretty conservative school, so if anything, my program should have biased me towards Lane’s argument.
ruemara
Meh. I wouldn’t feel too bad about hating in this case. They rather deserve it.
dmsilev
@Amy: A grad school classmate of mine wrote a multi-hundred-page paper for an astronomy journal. Some large fraction of those pages were entirely comprised of figures, but still.
-dms
Incertus
It’s the WSJ editorial page. Bullshit is their golf. Or something.
DougJ
I’m a Ph.D. candidate in economics, so I’m no “real” economist yet, but I read this and thought, “Huh, that’s news to me!”
Thanks for the input from the world of professional economists. It’s always hard to judge consensus from the outside and I’m always nervous with posts like these.
But I just don’t see how this asshole can pretend he’s got the weight of academic opinion on his side because he found one professor who agrees with him.
Alex S.
Reagan was right when he said that a rising tide lifts all boats. He then proceeded to lift a few boats, not the tide.
JGabriel
Chuck Lane @ Katy Weymouth’s Pay-for-Play Lobbyists’ Salon Newletter:
Doug, it infuriates you because it’s infuriating.
Partly it’s the dishonestly of the claim itself, partly it’s the intellectual dishonesty of the way he supports it: by mischaracterizing the nature of the peer-review system — which, as an academic, you’re more familiar with than most — to suggest that it’s supported and well-accepted by all economists, when it’s nothing of the sort.
.
Mike G
Next up, Charles Lane disproves anthropogenic climate change, and proves “Jeebus says Murka’s the greatest” citing “abundantly documented” wingnut welfare sources.
Chris
This is up there with McCain’s “Even if they were paying you fifty dollars an hour to pick lettuce, you couldn’t do it!” claim when it comes to deliberately misunderstanding the impact of wage changes on labor-pool participants.
I mean, I *assume* that twits like them are choosing to misunderstand the economics, as opposed to actually being that fucking stupid (OTOH, that *would* account for a lot of our current political-economic dysfunction…).
I’m not surprised that rich old white guys who can get away with being mouthpieces for the conservative movement make money doing so. I *am* surprised at the number of people who don’t fall into all those categories but prefer those arguments nonetheless.
Brick Oven Bill
The minimum wage in Central America is $3/day at the machidoras. In the US it is around $7/hr.
$3/day divided by eight hours is thirty-eight cents an hour, rounding up.
$0.38/hr is less than $7/hr
Thus $7/hr is too much for the American worker, given economic justice and all. But these guys probably spend ten hour a day at work, which equates to $0.30/hr.
I am not a PhD in economics though. Therefore I cannot argue that immigration policy has anything to do with lowering the cost of labor for the investment bankers.
Yutsano
Until the federal minimum wage went up, the wage in Idaho was $5.45 up until at least 2005. Washington passed what is arguably one of the most progessive minimum wage laws in the country and in 2005 it stood at $7.35. So many people in northern Idaho were hunting for jobs just across the border that it led to a hiring boom at least around those border areas (I went to college in one) so I can attest to the fact that employment surged in WA after that law was passed. Plus if this were really true WA should be seeing unemployment somewhere around Detroit levels when in fact it’s around 9% (mostly due to Spokane being the economic basket case it is) so I call bullshit.
EDIT: I could be wrong with what the wage rate in WA was at that time as I was making more than that so I didn’t pay too much attention. It might have been $7.25.
Nicole
I know why it pisses me off so much- because assholes like him make a comfortable living off of justifying other people’s misery.
The Republic of Stupidity
@d0n camillo:
Uh… when did Doughy rise above being a puddle of urine and flop sweat?
Not to give urine and flop sweat a bad name, or anything…
Martin
Well, I’m pretty sure Neumark wouldn’t agree with Lane. I haven’t read his paper, but I think the real point that he’s making is that the jobs would shift from teenagers and young adults to older individuals, not that there would be an overall loss of jobs. And that it does this because for a higher wage, employers will expect higher skills, but also because at a higher wage, more people can consider that job to make ends meet where they might have stayed on unemployment or held out for something else.
Basically, those jobs shift from teenagers to people with families, people with degrees, and so on. Now, is that bad? No, I don’t think so. But I think it underscores a more fundamental truth about US productivity. I believe the main problem we have in this country is that our productivity gains through either technology, longer than 40 hour weeks, and so on, eliminates demand for workers. I think we have to deal with a situation that the US labor market just doesn’t have 40 hours * 100M workers worth of work to do, and never will. We might have 35 hours * 100M workers worth of work to do (or 40 hours but not the 50 or 60 that some of us are regularly doing).
I think Neumark’s view on this is that yes, the minimum wage has an impact. Yes it will take jobs from teenagers, but as a policy would we rather that teenagers have jobs or 40 year olds with kids? That’s the choice before us right now.
Kyle
It’s the laziness of the authoritarian follower’s mind. They’re used to a paradigm where an established ‘authority’ says something, and the flock unquestionably believes it and repeats it. ‘Faith’ (i.e. belief without evidence) is exalted; you don’t dare ask for evidence or challenge the statement, you shut up and fall into line.
Such control-freak authoritarians get used to making stupid, unsubtantiated magical-thinking statements regarding how they WANT the world to be, and come to believe their own bullshit because they surround themselves with followers who are strongly discouraged from questioning or challenging them.
The Republic of Stupidity
We’re all abundantly aware of that fact…
Hmmm… $3/day… saaaaaaaaay… could that be why undocumented workers fight tooth and nail to come here?
For all of you who don’t like the number of ‘illegals’ working here, and I used the term ‘illegals’ gingerly… perhaps the best way to stop that onslaught is to make life more bearable for them all where they’re coming from.
I mean, would YOU come all the way up here to work for the kind of AZZZZZZZHOLES who think $7.50/hr is too much pay if you wern’t so f-in’ desperate?
I think not…
CalD
The pattern seems to be that the farther down the economic food chain you inject a dollar of capitol, the more economic activity it generates before it ends up in some rich person’s offshore accounts. I remember seeing a study once upon a time that concluded that every dollar spent on unemployment benefits generated two dollars worth of economic activity. It’s probably no surprise that when you hand a little extra cash to someone who has no choice but to turn around and spend it on necessities, that’s pretty much what they usually do.
strandedvandal
It’s the Conservative scientific method. Find something, anything that supports your position and call it a day. No point in going any further.
cat48
I wonder if that Nobel Prize winner only received it because the Europeans liked him & he was not Bush. If not, it may have been awarded as an affirmative action candidate.
Fox News is pushing the meme that the minimum wage needs to be lowered because there will not be any real jobs until then. I tune in there infrequently & they were talking about it the last 3 times.
Brick Oven Bill
Martin’s California public health care benefits are, as reported by him, $21,000/yr. This equates to $403/week (assuming a 52 weeks of ‘work’), $80/day, or $10/hr (assuming a five day work-day).
Martin deserves thirty-three times the working wages of a Central American laborer in health care benefits alone because he is white, and educated through the system.
Martin went to college.
mogden
Most economists agree, minimum wage laws are bollocks.
DougJ
Most economists agree, minimum wage laws are bollocks.
Then why does he cite the work of only one economist? I’m not saying he’s wrong, but he has to do better.
Also, even supposing that they are, we should note that (1) Paul Krugman and (2) the authors of what seems to be the classic study on the subject think that raising them has little effect on unemployment. Lane isn’t opposing minimum wage in general, he’s specifically claiming there is a consensus that delaying the current increase would have a positive effect on unemployment.
inkadu
@Martin: Your comment reminds me of one of my favorite Dilbert cartoons:
Dilbert: We’ve heard rumors about job cuts next year. Should we be concerned?
Boss: There is nothing at all to worry about. I guarantee you that next year the value of the average employee will increase.
Dilbert: Is that because there will be fewer of us doing more work?
That’s what gains in productivity mean — fewer people doing more work.
And if you want to encourage employers to hire MORE people instead of making fewer people do more work, you have address health care costs. If you can make four people work an extra ten hours a week, it’s cheaper than paying for a new hire with a health plan.
But these things are too complicated.
I wish we were in France. We’d all be blocking traffic, drinking home-made wine, rioting at McDonalds, and lobbying for a 32-hour work week.
corwin
It’s all about cheap labor, and that’s all it has ever been about.
Charles Lanes needs cheap labor to do his grunt work so he can do the much more serious, important job of telling everybody why he needs cheap labor to do his grunt work for him.
Ailuridae
@DougJ:
Many economists don’t think that minimum wage laws are beneficial but that doesn’t make Lane’s claim that minimum wage laws cost jobs. Lane’s claim is a small, small minority and there are plenty of actual empirical studies (the glibertard’s worst enemy) indicating a slightly positive overall correlation between areas with increased minimum wage and job growth (although that is likely ‘alcohol consumption goes up when teacher salaries go up’ territory)
inkadu
@Brick Oven Bill: Part of the point of being an Empire — in fact the only good thing that American citizens get from the Empire — is that we capture more the wealth from other nations and thus have elevated living standards.
I’d actually be ok with low wage jobs, as long as the government stepped up on providing services and all the wealth wasn’t captured by the ruling classes — which is almost always inevitable if there is gross wealth inequality. It’s not money. It’s power.
danimal
I’ve been working with the welfare population for 20 years, and the minimum wage smokescreen is evident from my perch. Fact is, higher minimum wages (and other programs such as the EITC) draw people off the sidelines and into the labor markets. This dynamic is never grappled with by conservative politicians but is just as commonsensical as the “minimum wage = fewer jobs” drumbeat they always play. The truth about minimum wages is much more nuanced than the simplistic broad strokes pedalled by conservative think tanks.
eastriver
The number of people willing to fight a minimum wage has never ceased to amaze me. What kind of fucked up person do you have to be? Seriously? How does someone like that try and counter-balance the shitty karma? Leave ten-dollar tips at Starbucks? Let the maid eat his leftovers for her lunch? Add a “thank you” after his “no” to panhandlers?
JGabriel
@inkadu:
I don’t know why we vilify France so much — that sounds like fun.
.
Karen
Yes, if we only were willing to work 17 hour days, seven days a week at $1 a day then we wouldn’t lose those jobs to the people willing to overseas. Bring back sweatshops and save American jobs! Who needs things like safe conditions, we sure as hell don’t provide that for the jobs we ship overseas. If only slavery was legal again….
LD50
@strandedvandal:
Spend some time on Creationist/Intelligent Design boards and you will see this strategy over and over and over and over and over and over.
Chris
I had quite a few minimum wage jobs back in college. It went up a few times. I didn’t see my manager at popeyes throwin anyone out on their keester. That damn chicken aint gonna fry itself…LOL This loss of jobs when the min wage goes up just doesnt seem to happen anywhere other than in the papers the economists write. In the aggregate I suppose maybe there is some movement. But i suspect its more “noise” than “signal”.
JR
One would think that the extra money from the min wage hike would mean more money to buy stuff, which increases demand, which leads to expansion, which… you know… creates jobs.
If people don’t have enough money to buy your stuff then no amount of deregulation, tax breaks or wage reduction will change that if you’re inventory isn’t moving. And since no one can afford your product, you’ll lose those jobs anyway.
What’s pissy is that he’s saying you should be greatful just to have a job and how dare you pull an Oliver and ask for more. The poor and poverty stricken should accept their position as Market Corrections because like an economic Fredo, they are dead to the Free Market. And they’re supposed to be OK with that.
Charles Lane sure seems to be.
KG
How many people actually make the minimum wage? I’ve always seen those jobs as “starter jobs” either for kids (i.e. high school kids working) or perhaps very recent immigrants who are trying to get a foothold. But my experience, spending pretty much my entire life working for and with small businesses, is that no one makes minimum wage for very long.
My experience has also been that small business owners (who tend to be the businesses that pay minimum wage) tend to adjust to the increase in overhead by one of two main ways: raising prices; or, cutting hours. Most, again, in my experience, tend to not want lay off employees if they can avoid it. I would guess this is because they get to know them better than in larger businesses.
arguingwithsignposts
I know what the problem is: Any increase in the minimum wage means Lane has to spend an extra 10 cents or so on his Big Macs and Caramel Frappucinos, which cuts into his budget, dammit!
If they’d just get rid of the minimum wage, Lane could save more money to invest in the economy elsewhere, thus bringing magical ponies and rainbows to the masses!
Allen
Peer-reviewed journal means something with an actual science, but this is economics we’re talking about, so peer-reviewed journal means absolutely nothing (or at least, nothing more than a meaningless echo chamber of like-minded economists).
eemom
why work so hard to justify hatred of an asshole like this who so clearly deserves it?
To paraphrase my position on the HCR bill-killers whose own personal asses are quite well insured, thank you, let somebody who survives on less than minimum wage explain to me why there shouldn’t be a minimum wage, and then I’ll listen.
Oh, I forgot — people who make less than minimum wage don’t write newspaper columns.
AB
Holy crap, I just read Joe Klein’s new article and I think I might die of laughter.
Chris
A krugman blog commenter said..
“ I say liberals could agree to cut the minimum wage if conservatives would agree to cut the maximum wage.”
The Main Gauche of Mild Reason
I think you’re making a big mistake here, DougJ, by thinking like an academic and not a real ‘merkin. If I have learned one thing about the time I’ve spent in biological research, it’s that this “facts/evidence/support/conclusion/hypothesis” mode of thinking is incredibly foreign to the vast majority of people, especially businesspeople and rightwingers. It really is that simple.
Academics are skeptical. Academics realize that any conclusions cited are basically more or less solid interpretations of data that have a number of interpretations. Academics realize that the simple thought experiments you learn in Econ 101 are useful mnemonic devices and not actual arguments.
You or I can read an economic journal, despite the fact that we have little background in economics, and parse the basic arguments that the author is making, the evidence they cite, and if the argument is logically consistent (I make no claims on whether or not I can evaluate if the argument is actually economically sound). Most people simply cannot do that–the best they can do is take the conclusions of the paper as dogma.
You think it’s an incredibly simple thing, and it is, but it’s far from a universal ability. Most high schools and colleges do not require formal logic or debate classes, which is the only other place you’d hone this mode of thinking outside a scientific field.
ELA
It annoys you because what Lane did is blatantly deceptive.
It is okay to link to Neumark’s op-ed in order to support his first contention. But to omit his name, and then specifically cite his name and the other author in a “peer reviewed journal” as if it is supplemental rather than somewhat repetitive information, without disclosing that one of the two is the economist he just linked to, is not really okay.
What makes what Lane did much worse, however, is that he referred to the “unknown” economist as “one economist,” instead of simply using his name in place of “one economist.” This is a little absurd since in a few sentences he is going to name the guy, as in essence a totally different economist, as if he is trying to hide what he did and make it seem like has cites a much wider variety of experts than he did. (Double, in fact, since really both articles are the same guy.)
Not huge, but blatantly deceptive, given that one does not refer to “one economist” and then a few sentences later name that economist with respect to giving even more support for one’s contention, without telling readers it is the same person.. Except that Lane apparently does.
See this comment. It’s all you need to know about Lane. Oh, wait, forgot.The Donkey Washington Post does not provide permalink links to its comments.
Phil
Oh. My. God.
You actually cited the infamous “New Jersey fast food study” as evidence for increasing the minimum wage.
Let me educate you. I’m an economist by profession. There is not a single non-hack economist that actually endorses that study. It’s been entirely discredited.
http://www.nber.org/papers/w5224
http://www.epionline.org/study_detail.cfm?sid=9
http://online.wsj.com/public/article_print/SB115439870173323067.html
Should I keep going?
And it’s the ONLY study that ever showed the minimum wage increasing employment. Ever wonder why you had to cite a 1994 study? And it turned out to have been total bullsh*t.
If raising the minimum wage increased employment, firms would continually raise their own wages voluntarily and voila! More employment!
If you’re going to be making stupid arguments, at least make sh*t up or something. Don’t rely on discredited studies from 1994.
FAIL.
inkadu
@KG: How many people make the minimum wage?
More here.
Also, when you say that “nobody makes the minimum wage for very long,” that might be true, but what they make ABOVE the minimum wage is probably very strongly connected to their starting minimum wage. If you start someone at $7.50, then raise their pay to $9/hr after six months, ok. But what if you start them at a minimum wage of $9? You’d probably bump them up to $11.
@danimal: As a recently broke-ass unemployed person, I am rapidly understanding the logic of poverty. Until you make about $40k a year, the extra work you do doesn’t increase your quality of life much. You still live pay-check to pay-check, you are still putting car repairs on your credit card, you’re still struggling to save something, you’re still living with a roommate. If you work an extra 10 hours a week, that might be an extra hundred bucks in your pocket. That’s not going to make much of a difference in your life. Add to that the fact that low-paying jobs are insecure and likely more hellish, there is a rapidly increasing, “what’s the point?” factor. And if you’re receiving any state benefits, it’s even worse. As soon as you have any money saved up, they pull your benefits until you spend it down. And do you think there’s a low wage job that will give you even the equivalent of community health insurance? It’s bullshit.
I have a lawyer friend whose firm bills $200/hr for his services. He works long hours. I drink his scotch, but I don’t talk to him about this stuff.
There was actually a very good article about this — I think I found it on Washington Monthly a few months ago. I’ll see if I can dig it up after reboot.
Karen
@JR
THANK YOU!
That is exactly how I feel. I knew it was only a matter of time before the loss of jobs in this country would be blamed on the American worker. You notice though that the jobs are not sent to Europe, where they get more vacation time, maternity leave and higher salaries and health care are a given. They’re sent to Asia, specifically India, China and the Philippines and that’s the attitude of the Charles Lanes of the world. American workers should take the generous crumbs offered because at least the job stays in the US.
Phil
By the way, is John Cole still on speaking terms with his boyfriend?
It seems John’s been getting lied to a lot these days.
http://www.youtube.com/watch?v=Zpghvx63imc
Maybe he’s just not that into you anymore John.
Violet
OT – I about puked when I picked up the mail today. There was a flier for this in the mailbox.
Yep. Sarah Palin is doing the speaker circuit. Isn’t this the same group with which George W. did his first post-presidency speech?
Sarah’s topics:
• How to Successfully Manage and BalanceYour Personal and Professional Priorities
• How to Overcome Obstacles with Creative Solutions
• The Secrets to Effective Decision-Making
• How to Have Grace Under Fire
• How to Become a Person of Influence
DougJ
@Phil
Relax, buddy.
Your evidence that the study has been “entirely discredited” is very weak. You will have to do better.
You cited on piece by Neumark, one from Wall Street Journal, and one from a conservative think tank.
Ash Can
@JR: This. It all comes down to the point I was bitching about in an earlier thread: Too damn many people think the main driver of economic growth is the economic elite — the wealthy, the business owners — when it’s actually the middle class. That’s why the preponderance of empirical evidence refutes the theory that minimum wage increases scuttle jobs.
But, just like in the case of climate change, we can’t have empirical evidence coming between the economic elites and their entitlement to rake it in and call the shots.
Spork
@KG #40 Min wage just sets the floor. The very definition of “entry level”. Some jobs do just pay that (or less with restaurant/tips tax laws), but those are the least desirable.
Jules
@Nicole:
That’s exactly it Nicole. It is so fucking easy to say get rid of min wage when you don’t actually have to work for min wages.
And we all know that if there was no min wage there would be assholes all over this country taking advantage of folks with minimal skills, stuck in small communities with no other options, paying their employees less then $5 an hour.
Phil
Let’s keep going. Opponents of minimum wage increases have claimed minimum wage increases do little to help the typical worker (who makes well above the minimum wage) and mostly favors some teenagers (who often do work for minimum wage) at the expense of other teenagers (who can’t find work).
Well, we increased the minimum wage and tada!
From the Bureau of Labor Statistics:
http://www.bls.gov/news.release/youth.nr0.htm
“From April to July 2009, the number of employed youth 16 to 24 years old
increased by 1.6 million to 19.3 million, the Bureau of Labor Statistics of
the U.S. Department of Labor reported today. This year, however, the pro-
portion of young people who were employed in July was 51.4 percent, the
lowest July rate on record for the series, which began in 1948. (July is
the traditional summertime peak for youth employment.)”
It’s almost as if….non-hack economists know what they’re talking about and you don’t.
OH NOES!!!
gwangung
Given the sources you cite, I doubt that very much.
DougJ
Phil, seriously dude, chill out. You’re not as smart as you think you are.
You sound like you’re on a meth bender.
arguingwithsignposts
@Phil: Wait, Phil links to articles by the very three guys who wrote the papers Lane cited that DougJ questioned in the original post as a refutation of the New Jersey study? Apparently the only three “non-hack” economists out there (excluding Phil, obviously).
Circle jerk much, Phil?
gwangung
You could try starting.
THis is terrible reasoning, given that the period your leaning on is in the middle of one of the worst recessions in recent memories. An economist, by profession, knows that correlation is not causation.
Your position could certainly be right. But your reasoning and rhetoric is, so far, piss poor.
Phil
“Relax, buddy.
Your evidence that the study has been “entirely discredited” is very weak. You will have to do better.
You cited on piece by Neumark, one from Wall Street Journal, and one from a conservative think tank.”
Try again. The counter studies showed how the New Jersey study used sh*tty data like telephone surveys, which is about as bad a data as you’re going to get, especially when STATES PROVIDE ACTUAL UNEMPLOYMENT STATISTICS.
I could get even deeper into the study (like how it ignored the fact that some employment was maintained by reducing fringe benefits like free food – “no more free McChicken for you at lunchtime little Johnny!” – but I can see I’m already talking over your head.
scav
Um, Phil, economists haven’t exactly been covering themselves with glory recently and over and above that, I’m getting these really strong vibes that you’re to real economists what what astrologists are to astronomy.
arguingwithsignposts
@Phil:
Dipshit, the U3 unemployment is at 10.2 percent. Surely that wouldn’t have anything to do with the increased young unemployment, now would it?
But obviously not a professional economist. Do you work for the Employment Policies Institute?
(btw, any time you want to let your employer know you’ll work for minimum wage, I’ll be waiting)
Jules
@Ash Can:
Indeed.
An economy cannot survive on just the well off, it has to have a large group of consumers that can afford to buy things so that things have to be made which means executives can make large salaries because their business is either making what will be bought by the middle class OR bought and used by a company to produce what the middle class wants to spend their money on.
Phil
“Wait, Phil links to articles by the very three guys who wrote the papers Lane cited that DougJ questioned in the original post as a refutation of the New Jersey study? Apparently the only three “non-hack” economists out there (excluding Phil, obviously).
Circle jerk much, Phil?”
Yes, I cited such unserious economic publications as THE NATIONAL BUREAU FOR ECONOMIC RESEARCH. Sounds like you’ve never heard of it. Which is why you shouldn’t even be trying to debate with me on this. You’re embarrassing yourself.
Smarter monkeys please.
DougJ
The counter studies showed how the New Jersey study used sh*tty data like telephone surveys, which is about as bad a data as you’re going to get, especially when STATES PROVIDE ACTUAL UNEMPLOYMENT STATISTICS.
First off, Paul Krugman and Joe Stiglitz accept the study as valid.
Second, you have to find one that isn’t by Neumark, didn’t appear in WSJ, and wasn’t produced by a conservative Think Tank just for starters.
You should also learn to use blockquotes or italics when quoting others, FWIW.
DougJ
Yes, I cited such unserious economic publications as THE NATIONAL BUREAU FOR ECONOMIC RESEARCH.
Yes, but it was written by Neumark.
You’ll need to find other criticism. It shouldn’t be hard — Gary Becker and Greg Mankiw have also criticized the study, for example.
Phil
“This. It all comes down to the point I was bitching about in an earlier thread: Too damn many people think the main driver of economic growth is the economic elite—the wealthy, the business owners—when it’s actually the middle class. That’s why the preponderance of empirical evidence refutes the theory that minimum wage increases scuttle jobs.
But, just like in the case of climate change, we can’t have empirical evidence coming between the economic elites and their entitlement to rake it in and call the shots.”
I have some news. The middle class doesn’t make minimum wage. If they made MINIMUM wage, they wouldn’t be the MIDDLE class.
Is this commentariat really the best you could find John?
The Main Gauche of Mild Reason
@Phil:
I know undergrads in my department like you. They think everything published in Science and Nature is God’s Own Truth. Ahh, to be young again…
Spork
@65 So that reduction in percentage of young people in the work force was attributable to the minimum wage hike? Did other age groups gaining jobs rise in a proportionate amount? Or did all groups fall behind in that time period? Your point doesn’t make the point you think it does.
Phil
“Wait, Phil links to articles by the very three guys who wrote the papers Lane cited that DougJ questioned in the original post as a refutation of the New Jersey study? Apparently the only three “non-hack” economists out there (excluding Phil, obviously).
Circle jerk much, Phil?”
Again, I have some news. Once a study has been completely discredited, it’s pretty stupid to discredit it again. It’s already been done. And taking credit for work someone else has done is a big no-no is the academy.
I’m stating the obvious, but again, I can see this is over your head.
gwangung
Sorry, but even a non economists can spot that as a non-serious journal. You’re better off focussing on the methodology, which is an intersubjective criterion which DOES shed a good critical light (and it would help to find a couple more sources critical of the study).
Corner Stone
@Phil:
Well, he keeps reflexively hippie-punching the left who’ve been right about most everything since before Cole was turned…so, yeah. I guess it is.
But that has nothing to do with what DougJ’s pissed about.
Notorious P.A.T.
Lots of good comments in this thread, but this is probably my favorite. The vast majority of workers in this country contribute much more value to their company than they are paid, so it would be stupid for someone to kick a few employees to the curb just because the minimum wage creeped up a bit. Of course, most movement conservative ideologues are stupid, so there you go.
I earned minimum wage for a few years. The only raise I got was when the MW went up and there was no mass expulsion of employees when it did. Then again, why fire people when you already have 50% yearly turnover, but anyway.
DougJ
Phil, out of curiosity, since you quoted someone else about global warming in one of your comments, do you believe in global warming? In man made global warming? How about evolution?
I’m just curious.
I appreciate the point you are trying to make, but regardless of what you say, there is not a consensus that delaying the minimum wage increase would have much effect on unemployment.
Phil
Ok kiddies, let’s just use our brains and think for a second. If I’m an employer and I make a certain amount of revenue and I pay my employees X dollars per hour, and then the government mandates that I now must pay X(+Y) dollars per hour to my employees, why would this make me likely to hire more employees considering the Y has has no effect on my revenues?
DOES THAT MAKE SENSE TO YOU? Of course not. But you’re trying to insist to yourself that it does, even though the data from the Bureau of Labor Statistics confirms the already obvious.
Spork
@gwangung: “Sorry, but even a non economists can spot that as a non-serious journal.”
It’s worse. Regardless of the validity of his source, it doesn’t make the point he’s trying to make.
arguingwithsignposts
@Phil:
No, you cite a paper by David Neumark and William Wascher that appears in an NBER publication. So my point stands.
Just because a research journal or whatever the NBER is, publishes a paper doesn’t mean it agrees with the conclusions, just that the conclusions are consistent with the hypothesis and peer reviewers believe the process to have been valid.
I would note that Paul Krugman is listed as a member of NBER, but he apparently doesn’t agree with Newmark and Wascher.
Smarter asshole trolls, please.
The Republic of Stupidity
Going out on a limb here… but… could ‘lowest July rate on record’ be in any way related to the generally CRAPPY overall employment situation in the country as a whole?
There doesn’t seem to be anything in that article that refers to the effect an increase in the minimum wage had on those statistics… so mebbe you’re conflating two unrelated phenomena, huh?
Why the need to be so insulting?
Notorious P.A.T.
That’s ironic: you trash bullshit argument, then make a bullshit argument. If one or two companies skyrocketed their wages, it would probably hurt them in the long run and lower their number of employees. Only if everyone raises their employees’ wages is this avoided. Oh, and why the heck do you assume that it’s the goal of private firms to increase employment? That’s indefensible.
Not to pile on you, or anything.
Chris
@phil
But Phil..I dont think it makes them hire any LESS people either. (see the chicken quote..still gotta be fried u know)And it seems THAT was the point that DougJ was trying to make. I think we all agree with you that increasing the minimum wage does not…in general terms…make employers hire more people.
Phil
“Sorry, but even a non economists can spot that as a non-serious journal. You’re better off focussing on the methodology, which is an intersubjective criterion which DOES shed a good critical light (and it would help to find a couple more sources critical of the study).”
OH NO YOU DIDN’T. Did you know that it isn’t the federal government that officially determines the beginning and end of a recession but a small “non-serious journal” does? Yes, that’s right kiddies, it’s so irrelevent and stupid that the government uses it to determine the official beginning and end of every recession in US history.
http://www.learningmarkets.com/Stocks/20081202968/defining-a-recession.html
And let’s take a look at some of the prominent members:
http://en.wikipedia.org/wiki/National_Bureau_of_Economic_Research
Let’s see, oh look! Paul Krugman and Joseph Stiglitz!
Wow, they really have some famous members considering they’re a “non-serious journal”! They must give out free bagels for breakfast or something.
clone12
As a PhD economist, I can attest that our consensus on minimum wage is that we don’t have a consensus… any more. Once you get past the econ 101 graph drawing and actually try to estimate the impact of minimum wage laws on job losses, it turns out that such a relationship is ridiculously hard to pin down empirically.
My sense? If you raise the minimum wage by $50, you’ll probably see a reduction in employment. But a few bucks? that’s not going to cause a big impact one way or the other.
burnspbesq
@Phil:
I was an economist before I learned an honest trade. I’m now a lawyer.
If you are suggesting that anything having to do with labor market conditions in 2009 has any predictive power, you should really stop insulting the intelligence of this crowd. Can you say “anomaly?” Of course not, because that would get in the way of your idiotic wingnut narrative.
FormerSwingVoter
@Phil:
Hey. I understand that people disagreeing with you has a tendency to raise the blood pressure (your tone isn’t much different than the way I post on conservative blogs, to be honest), but please try to calm down and explain your position without the insults.
From what I understand, the Card/Krueger analysis is based on data from the Bureau of Labor Statistics. I understand that telephone surveys are unreliable, but, from my understanding, this is far from the sole source they use for their data. Just provide a couple of links to the prior research showing the link between minimum wage and unemployment.
If you don’t mind, I’d like to disengage from the name-calling for long enough to look at the empirical data supporting your points. My gut instinct may be to disagree, but I’m willing to admit that I’m wrong when presented with evidence.
Notorious P.A.T.
@Phil:
Hopefully, people earning more would mean people spending more, and thus more revenue for businesses. It’s the Henry Ford principle: pay your workers enough to afford your product and you’ll increase your customer base.
Phil
“I was an economist before I learned an honest trade. I’m now a lawyer.”
Is this parody? Seriously, Chris Rock couldn’t write this stuff.
arguingwithsignposts
Well that’s three economists (a Ph.D., a lawyer, and an almost Ph.D.) who have shot down Phil’s argument (and I’m using that term very loosely, because I think he’s arguing something that isn’t being argued here – i.e., minimum wage increases will increase employment. Rather, most here are arguing that getting rid of the minimum wage will not necessarily increase employment as the idiot Lane suggests). So what say you Phil?
Calvin Jones and the 13th Apostle
Isn’t this a case of multiple deja vu? It sure seems like it. I think K-Thug has debunked Lane a time or two before this even.
Phil
“Phil, out of curiosity, since you quoted someone else about global warming in one of your comments, do you believe in global warming? In man made global warming? How about evolution?
I’m just curious.
I appreciate the point you are trying to make, but regardless of what you say, there is not a consensus that delaying the minimum wage increase would have much effect on unemployment.”
Since you asked nicely, I’ll respond in kind. I’m an agnostic in global warming. I had no doubt that it was never as terrible as Al Gore claimed it to be, but thought it had some validity. Post-ClimateGate (and doing my own research into the paleo-climatology behind it – if you don’t know what paleo-climatology is then you don’t “get” the impact of ClimateGate), I’d say it’s probably 80 percent bullshit and 20 percent true.
Midnight Marauder
@Phil:
A tragic mistake of a career choice. I think we can all agree on that after your performance thus far.
JR
Phil:
Phil, people like me read stuff like this, which comes to completely different conclusions, and often do not know which to believe. It’s easy for you to mock us for it, and it’s easy for the other commenters here to mock you. But you both can’t be right, and it’s terribly frustrating.
Phil
I missed your line about evolution. Yes, evolution is fact. There’s no dispute about that.
DougJ
Since you asked nicely, I’ll respond in kind. I’m an agnostic in global warming. I had no doubt that it was never as terrible as Al Gore claimed it to be, but thought it had some validity. Post-ClimateGate (and doing my own research into the paleo-climatology behind it – if you don’t know what paleo-climatology is then you don’t “get” the impact of ClimateGate), I’d say it’s probably 80 percent bullshit and 20 percent true.
Thanks, Phil.
How about evolution?
Karen
@Phil: as an employer, what is the maximum you feel workers should get? $3/hr? $1/hr? fifty cents/hr?
I know, I know, if you can’t pay fifty cents or less you don’t make any profit and should just ship that job off to Thailand.
burnspbesq
@Phil:
No, Chris Rock would tell you to sit the fuck down and shut the fuck up, cuz you ain’t makin no kinda sense.
In all seriousness, you are illustrating why crap economics is so corrosive. All it takes is a small amount of hack scholarship, and business lobbyists can go up on the Hill and say “wait a sec, Senator – there is some recent scholarship that says that contrary to the consensus, if you do X there is a risk of Y – are you sure you want to take that risk?” And Congresscritters being essentially risk-averse, X is now dead on arrival.
DougJ
Well, Phil, you sound like a fairly reasonable winger to me. But I think you’re a bit too angry and a bit too ideologically right-wing for me (evidenced by your global warming position), so I’m not going to debate with you anymore.
JR
Phil#2… sorry, that 2nd paragraph was also in the article, I just screwed up my blockquotes. It’s not my words.
arguingwithsignposts
Okay, the climate change stuff sent Phil back to the pie filter. He hasn’t been around in a while, or maybe I missed him.
Phil
“Going out on a limb here… but… could ‘lowest July rate on record’ be in any way related to the generally CRAPPY overall employment situation in the country as a whole?
There doesn’t seem to be anything in that article that refers to the effect an increase in the minimum wage had on those statistics… so mebbe you’re conflating two unrelated phenomena, huh?
Why the need to be so insulting?”
I’m insulting because I don’t really like John Cole. He annoys me more than any other blogger. He was a prick back in the day and now he’s shilling for his boyfriend. He decried hackdom before and now he’s a hack, just on the other side this time.
Am I being unfair to you too? Perhaps, but you cited…the New Jersey unemployment study. Nothing alerts my bullsh*t meter quite like the New Jersey unemployment study. It’s like a demon that never goes away. No matter how discredited it is, it still comes up every now and then.
Seriously, do you find it awkward that you’re citing a study from NINETEEN NINETY FOUR? Don’t you think there would be like…more recent research and stuff?
DougJ
I’m insulting because I don’t really like John Cole.
By the way, I wrote this post, not John.
Phil
“@Phil: as an employer, what is the maximum you feel workers should get? $3/hr? $1/hr? fifty cents/hr?
I know, I know, if you can’t pay fifty cents or less you don’t make any profit and should just ship that job off to Thailand.”
Karen, you’re substituting emotion for logic and reason. Economists don’t deal in emotion, at least not when it comes to policy. I would love if everyone made a million dollars an hour. I’d also love it if chocolate sprinkles randomly feel from the sky and I could eat them, but it isn’t so.
Contrary to what it may seem in my statements, I’m not necessarily opposed to a minimum wage. But I am anti-dishonest hacks. And someone who sells an increase in the minimum wage as a way to reduce unemployment is a dishonest hack.
You want to raise the minimum wage? Fine go ahead. But then you acknowledge that teenage unemployment is going to go up.
ELA
Professional Economist,
If raising the minimum wage increased employment, firms would continually raise their own wages voluntarily and voila! More employment!
I slept through every economics class I ever took, never opened the book, paid a local townie to take my econ exams for me, and paid off my professors handsomely in Michelob Light in order to get my economics degree anyway.
Okay, just kidding. But was trying to explain in advance how it is that I (and maybe some others) are not able to follow your advanced economics professor logic here.
Firms do raise the minimum wage, when they want to increase employment in their own firm, with respect to selected workers whom they want to entice or retain, right?
So with respect to “increasing employment” in their own firm, firms do raise their own wages voluntarily, when they need to raise the labor pool relative to what it provides them. As proof of this theory, do consider that in fact most jobs in America are higher than the minimum wage. Voila, to use your term from above. The would not do this “continually” as you suggest, because they do not need to keep increasing their own employment number continually.
But really your comment seems to be about the topic of this discussion; which is, of course, raising the overall employment rate. Which firms themselves have no interest in doing, obviously, so, no, they would “not” then continually raise their wages to “increase employment.”
So are you simply trying to say, in a very roundabout, rather skewed way, that if raising the minimum wage increased employment there would be no need for the minimum wage in the first place?
Roger Moore
@DougJ:
It’s the contemporary conservative school of analysis. Any evidence to support my position is enough to justify doing whatever I please. A trumped up 1% chance that a country might have nuclear weapons is a reason to invade. A trumped up 1% chance that global warming might not come true is justification for inaction. A single economist who thinks that increasing minimum wages will lead to decreased employment is justification for not raising them.
burnspbesq
@Phil:
Why should he? The work on international for which Krugman won the Nobel is almost 30 years old. The General Theory is almost eighty years old. The Wealth of Nations is over 200 years old, Where economic scholarship is concerned, age doesn’t seem to correlate very strongly with quality.
FormerSwingVoter
@Phil:
Not to be rude, but if you just linked to some of it you might be treated with a bit less skepticism.
Phil
“Hey. I understand that people disagreeing with you has a tendency to raise the blood pressure (your tone isn’t much different than the way I post on conservative blogs, to be honest), but please try to calm down and explain your position without the insults.
From what I understand, the Card/Krueger analysis is based on data from the Bureau of Labor Statistics. I understand that telephone surveys are unreliable, but, from my understanding, this is far from the sole source they use for their data. Just provide a couple of links to the prior research showing the link between minimum wage and unemployment.
If you don’t mind, I’d like to disengage from the name-calling for long enough to look at the empirical data supporting your points. My gut instinct may be to disagree, but I’m willing to admit that I’m wrong when presented with evidence.”
Fair enough, please re-read my post 77. Again, I put it in caps, DOES THAT MAKE SENSE TO YOU? No, it doesn’t. But then you could say, well maybe it’s counter-intuitive.
And then you look at the data. And nope, it’s not counter-intuitive either. It happens exactly like you logically think it would in this case.
Notorious P.A.T.
Figures. And if you think “Climategate” says something bad about climate change theories, you need to learn more about how scientists work.
Spork
Well, Phil is reasonable. Wrong, in my opinion, but reasonable. I’m not an economist, and I haven’t read the papers you’re quoting, other than referring to your links. But I agree with those saying this is a false dichotomy. Of course paying 50$ an hour to pick lettuce will fuck up our economy. Of course paying $0.25 an hour will too.
But pinning decline in teen employment in 2009 in a particular area as a direct result of an increase in minimum wage is a silly argument. There are way too many other higher order effects that are likely to wash out the increase, such as the state of the economy in general, and it also ignores completely whether or not the decline in that age bracket as a share of the total pool of employed persons has offsetting effects/causes or not.
Phil
“Well, Phil, you sound like a fairly reasonable winger to me. But I think you’re a bit too angry and a bit too ideologically right-wing for me (evidenced by your global warming position), so I’m not going to debate with you anymore.”
Again, you have to know what paleo-climatology is before we could even enter a debate on Global Warming. I ask sincerely, do you know what that paleo-climatology is?
Because if you don’t, you’re just reciting Al Gore talking points and not understanding why ClimateGate put a giant hole in the AGW theory.
Martin
@Phil:
If I’m selling yachts, no, but then revenues aren’t coupled to costs in that case anyway, so minimum wage means nothing.
If I’m selling cheeseburgers, then yes, because more people can now afford to eat out.
The part of this that *everyone* gets wrong is that it’s not the individual employer being forced to pay more, but *every* minimum wage employer being forced to pay more. The economy doesn’t run on yachts. It runs on cheeseburgers, and that little boost at the bottom really does gangbusters for the economy.
burnspbesq
Where does one download the pie filter? I never saved that link, because I never felt I needed it. Until tonight.
DougJ
Phil, I’m done debating with you. I mean that nicely, but don’t expect me to reply anymore.
I admire your grit here!
burnspbesq
@Martin:
I was about to say something about the relationship between income and marginal propensity to consume, but you beat me to it – and in English instead of Econobabble.
arguingwithsignposts
@burnspbesq:
Here’s a link from the inimitable Cleek. You’ll have to have greasemonkey installed. It works on Firefox and Flock that I know of. Someone else (Martin?) uploaded a Chrome version, but I don’t know where that’s housed.
FormerSwingVoter
@Phil:
I’m not asking you for what makes sense. I’m asking for the data.
My personal experience has taught me that many conservatives honestly believe that something must be true because it makes sense in their head. But the data doesn’t necessarily reflect that. What I want to see is the data. You say that it proves the point you’re trying to make – well, then just provide a link to the data. I’d like to keep an open mind and look at it for myself.
Phil
“If I’m selling yachts, no, but then revenues aren’t coupled to costs in that case anyway, so minimum wage means nothing.
If I’m selling cheeseburgers, then yes, because more people can now afford to eat out.
The part of this that everyone gets wrong is that it’s not the individual employer being forced to pay more, but every minimum wage employer being forced to pay more. The economy doesn’t run on yachts. It runs on cheeseburgers, and that little boost at the bottom really does gangbusters for the economy.”
I have a little secret that economists know that most people don’t. It’s a little depressing, but bear with me. The only way to increase living standards is via a change in the population or a change in productivity. That’s it.
That’s why some firms pay an efficiency wage, which is quite different from saying let’s raise the minimum wage. Firms may pay an efficiency wage, but expect higher productivity in turn.
Just doing a blanket increase in the minimum wage doesn’t necessarily boost productivity. And since it doesn’t (and the data tells us it doesn’t), then raising the minimum wage increases unemployment. Which is why teenage unemployment is at an all time high (yes the recession is part of it too but doesn’t explain such a staggeringly high figure)
Mark S.
@clone12:
The conservative mind doesn’t work that way; it’s always all or nothing. For instance, I could believe in certain limited circumstances a tax cut could increase revenue, but with conservatives it is a matter of faith even though they have been proven wrong in almost every case.
Phil
“I’m not asking you for what makes sense. I’m asking for the data.
My personal experience has taught me that many conservatives honestly believe that something must be true because it makes sense in their head. But the data doesn’t necessarily reflect that. What I want to see is the data. You say that it proves the point you’re trying to make – well, then just provide a link to the data. I’d like to keep an open mind and look at it for myself.”
I already provided the BLS data for you in post 57. You want more data. Here, let me google that for you:
http://tinyurl.com/yb493ka
Spork
@Phil: Just doing a blanket increase in the minimum wage doesn’t necessarily boost productivity. And since it doesn’t (and the data tells us it doesn’t), then raising the minimum wage increases unemployment.
This seems to assume that employer profit as a share of revenue must stay constant.
Brian J
@Nylund:
I’m not a PhD in economics, although I wanted to be one at one point.
I think I know what you are talking about as far as the states in the Northwest. I remember reading at article about it. I think it involved Washington, Oregon, and/or Idaho.
As far as I understand it, it seems to be that those who don’t support it seem to place more emphasis on the fact that it can kill some jobs, while those who support it (a group which includes several Nobel Prize winners, by the way) argue that any negative effects, like job destruction, are swamped by the positive effects, like poor people having more money.
thomas Levenson
@Phil: Actually, even some of us noneconomists know what the NBER is; as it happens, its current president is my colleague, James Poterba, with whom I’ve had a couple of conversations over the last year about the clearly dire need to better popularize economic research.
And so I can say with the best authority — no, not Jim, but an actual fifteen seconds of research to confirm that a remembered fact is true: publication in an NBER working paper is not in itself a signal about the quality of the work submitted. Any of the 1000 or so NBER associates can submit working papers. Many, most, or just about all are also published in other journals, but the NBER says, explicitly, in plain prose, available to anyone who isn’t trying to credentialize bullshit, that such research is being presented as a pre-publication service to the community, with no further endorsement or criticism implied. On the NBER working paper page you find:
(“NBER research” = research performed by someone with an affiliation with the NBER, not research funded by the NBER).
So, Phil, if I may make a suggestion as, if not an economist, at least someone who talks to some good ones from time to time: the more you proclaim your ex cathedra authority, the more you imply you have none.
MikeJ
@arguingwithsignposts:
That’s me. Click on my name for a link to it, hunt me down here and yell at me if you find any bugs.
My keyboard feels weird. I just popped off all the keys and degunked it. This will take some getting used to.
thomas Levenson
Also, re Phil, it might be a better idea to look a little deeper into the debate before declaring that a paper, once debunked, is done forever. Not, of course, if the “debunked” researchers have anything to say about it, and they did.
Consider, e.g. this response from Card and Krueger to their Employment Policies Institute (an anti minimum wage shop) funded work of Neumark and Wascher. (Also an NBER paper, fwiw.)
Here’s the abstract:
GregB
Paying more people less money improves the economy!
Hitler was a liberal leftist!
Franklin Roosevelt caused the Great Depression!
Bill Clinton was president during 9/11.
It’s great to play right wing revisionist history.
-G
Phil
Here’s the Wikipedia entry on the minimum wage. Start from where it says “Card and Kreuger” and keep reading.
http://en.wikipedia.org/wiki/Minimum_wage
Do you notice how Paul Krugman…is sort of an outlier? Sort of insisting that the data for his beliefs is true, even though it isn’t?
What people tend to forget or don’t know (or for the Leftists who do know, deliberately ignore) is that Krugman won his Nobel Prize based on free trade arguments. Not exactly Keynesian stuff. So now that he’s “credentialed”, I suppose he feels he can get away saying bat shit crazy stuff.
Krugman is sort of looked at as an idiot by most in the Economics world. Keynesian is largely a failure, and if you needed more evidence of that, introduce yourself to the Obama “stimulus” package, which was classic Keynesianism. Of course, for Krugman, his criticism with the stimulus package is that it didn’t bankrupt us fast enough.
John Cole
I think Phil is a Protein Wisdom era commenter circa 2004, btw.
Phil
“The conservative mind doesn’t work that way; it’s always all or nothing. For instance, I could believe in certain limited circumstances a tax cut could increase revenue, but with conservatives it is a matter of faith even though they have been proven wrong in almost every case.”
Oy, for the last time, i said I’m not necessarily opposed to an increase in the minimum wage. I just believe in HONEST ARGUMENTS. Claiming raising the minimum wage will increase employment is not one of them. So I mock people who make such claims.
clone12
Is there a strong correlation between minimum wage and teenage unemployment? Historical data says not all that strong:
http://angrybear.blogspot.com/2008/06/minimum-wage-teenage-unemployment.html
FormerSwingVoter
@Phil:
Yes, you showed that teenage employment decreased during a recession. Then you showed me that Google can do searches. That’s terrific.
SHOW. US. THE. CORRELATION. BETWEEN. MINIMUM. WAGE. AND. UNEMPLOYMENT.
This is not a complicated request. I’m sorry if you feel terribly insulted that we’re not taking whatever you happen to say at face value. If that’s the case, just show us something that proves how right you are. Something. Anything.
Brian J
@Phil:
I don’t understand why Keynesian/Neo-Keynesian economists wouldn’t support free trade.
burnspbesq
@Phil:
Look, you’re not fooling anyone. Just forthrightly admit that you have a political axe to grind, and are cherry-picking the literature in support of that political axe, and we’ll all get along fine. We won’t respect you, but we’ll get along fine.
Gian
Mr. Lane, and his supporters here would have just as vocally argued against any law requiring plantation owners to feed, shelter and provide medical care for slaves, because to do so would cut down on the productivity of plantations, and they would argue that no rational slave owner would need any regulation
and in fact, their desired ecconomic system is nearly indistinguishible from slavery. people like him and his supporters need to have their daughters go work in the sweatshops and rape-forced abortion centers of Saipan and then tell us how deregulation benefitted their families.
(quick search for a decent link)
http://blogs.abcnews.com/theblotter/2007/02/plea_to_congres.html
THAT is what the anti-living wage thugs want everywhere.
burnspbesq
@Phil:
If idiots can win a Clark and a Nobel, why don’t you have them?
TheBigotBasher
I remember the basics if economics and thus the marginal propensity to spend, the lower your income, the greater the propensity to spend. You are physically unable to spend $1million a week, every week; you can not but spend all of $280 a week.
To me that just proved where all the tax cuts should goo.
I must be confused, after all I am not a NeoCon.
TheBigotBasher
Go not goo.
Ailuridae
@DougJ:
And for reference, David Henderson is who has a laundry list of wingnut welfare in his CV – an Olin professor here, a stint at Cato, a stint at the Hoover Institute a stint on Saint Ronnie’s CEA.
There’s a whole lot of research that says that raising the minimum wage doesn’t have much of an effect on the employment rate.
justme
This just reminds me of the two assclowns that wingers love to use to claim that FDR caused the Great Depression. Yup, a couple of guys with an ideological axe to grind wrote a couple of papers that say basically the opposite of everything else on the subject, ergo, history changes! ! !
This is also why congenital idiots like Der LöadedHösen get paid to spew the most ignorant drivel imaginable. Somewhere, someone will use this crap as a cite as if it is actually some kind of scholarship. Somehow, as time goes on and it is generally forgotten what a tool the author is and how awful the work is, people’s reactions to the attempt will be less like that to ipecac under pressure and more a scratching of the head wondering if maybe this could make sense.
Witness the inching of the Overton Window.
Bleah.
Phil
FormerSwingVoter:
Here’s a study from the Fed:
http://www.federalreserve.gov/pubs/feds/2003/200323/200323pap.pdf
If you don’t want to read the whole thing, start with the conclusion on page 19. It’s actually an international panel data set, so it’s about as big as you’re going to get.
Martin
‘doesn’t necessarily’
And yet often times it does, but you’re focusing on a subset of cases and not all cases. You also focused, as the paper did, on teenage unemployment.
What is the effect then on non-teenage unemployment? If Burger King paid more per year flipping burgers, would that have an effect on who took jobs flipping burgers? Does that affect overall unemployment, or does it shift employment from one sector to another? Is that shift desirable or undesirable? Would we be better off with people trying to make the mortgage payment getting that job, or teenagers saving up for a car getting that job?
And let’s examine the population/productivity argument by looking at an edge case. If all of the nation’s income was in the hands of one individual, would that lead to greater or lesser GDP than if the income was equally distributed to all individuals? What can we deduce from that observation?
Phil
“If idiots can win a Clark and a Nobel, why don’t you have them?”
Don’t worry I’m not looking to win one. But it appears you’ve (deliberately) missed the point. Krugman was his Nobel for something people wouldn’t normally associate him with (free trade or neo-classicalism). Krugman was actually a pretty damn good economist back then. Read some of his stuff on the Asian Financial crisis. Real good stuff.
Compare that to Krugman now. He just shills for left-wing crap now. As the Wikipedia entry on the minimum wage showed, he shills for crap that’s been disproven and insists its real. It’s what happens when you let politics drive your research.
Ailuridae
@clone12:
As a PhD economist, I can attest that our consensus on minimum wage is that we don’t have a consensus… any more. Once you get past the econ 101 graph drawing and actually try to estimate the impact of minimum wage laws on job losses, it turns out that such a relationship is ridiculously hard to pin down empirically.
This. And thats not the point right now anyway. The Conservative canard is that if the minimum wage were lowered employment would increase and while I wouldn’t mind putting this in my own words you can read a far better writer who knows more what he is talking about than I do:
http://krugman.blogs.nytimes.com/2009/12/16/would-cutting-the-minimum-wage-raise-employment/
This isn’t rocket science and the charming thing about Chicago Schoolers and free market fundamentalists is that they can’t ever demonstrate with actual data any of the things they hand wave that “must occur”because they are all “self-evidently true”.
FormerSwingVoter
@Phil:
Thank you.
jl
Hey, you kids behave, hear!
First off, Phil is a little simplistic on the theory behind minimum wage effects. As I remember, Card proposed that there were too kinds of minimum wage equilibria: a higher turnover lower skill lower pay equilibrium, and a lower turnover, lower wage, higher skill equilibrium. I also remember that he proposed that either equilibrium could occur. So I think Phil is being unfair in his total scorn and others are saying that Card asserted more than he did.
Some studies measuring labor flows find that higher minimum wages produce lower turnover rates and increase retention, helping teens that are employed increase their cumulative income over the long run. Neumark finds the opposite.
Phil needs to get on scholar google and do a literature search and catch up. It is true that there is little evidence that minimum wage increases aggregate employment among teens or anyone else, but I do not see much consensus on whether it has a significant negative effect, due to the possibility of employers moving into different sorts of employment equilibria, and that cannot be detected using aggregate employment data, but only labor flow data.
Of course, aggregate effects can mask undesirable distributive effects, and there is evidence of undesirable distributive effects, particularly for low skill males who tend to hurt more than higher skill workers of both sexes and low skill women.
I think the issue is complicated, you folks are focusing too much on evidence aggregate employment data, which only tells half the story, and is also the area where the evidence is most unsettled.
Everyone needs a drink.
BTW, I do not care much about the minimum wage policy. I think that there are better ways of dealing with low income workers than statutory minimum wage requirements. But then I am a commie Nordic model fan. They don’t need no stinking statutory minimum wage.
Ailuridae
@Phil:
Contrary to what it may seem in my statements, I’m not necessarily opposed to a minimum wage. But I am anti-dishonest hacks. And someone who sells an increase in the minimum wage as a way to reduce unemployment is a dishonest hack.
In the business this is called a strawman. Nobody argued that a rise in the minimum wage increased unemployment. What some argued is that rises in the minimum wage have a slightly positive correlation with decreased unemployment and that correlation is real. But correlation isn’t causation and all that.
The Republic of Stupidity
@Phil:
Funny that… John isn’t even here, and as he said, DougJ posted this thread. Soooooo… why does that entitle you to insult US?
You need to work on your reading comprehension skills… I didn’t cite anything here. Seriously…
BTW… you never established any relationship between the higher unemployment rate for teenagers (from the Bureau of labor Statistics report) and an increase in the minimum wage. It appears you just ASSUMED there was a direct cause and effect w/out PROVING it.
Ailuridae
@Phil:
You just keep citing Neumark studies and declaring consensus. This is a charming, albeit juvenille, argument.
DonBelacquaDelPurgatorio
No economists were injured in the making of this thread.
The part of Phil was written by DougJ.
Phil
“BTW… you never established any relationship between the higher unemployment rate for teenagers (from the Bureau of labor Statistics report) and an increase in the minimum wage. It appears you just ASSUMED there was a direct cause and effect w/out PROVING it.”
Wrong, I just provided a Fed study that showed this was the case not just nationally but INTERnationally.
Ailuridae
@Phil:
No you linked another paper written by Neumark. We all know what he said as you have linked another three papers of his.
I almost want to believe Phil is an old school DougJ spoof but he really is arguing from the grand conservative method playbook. Find a study that confirms your biases, declare the issue over, dismiss any dissent as from left-wing cranks. Rinse. Repeat.
Ailuridae
Alo, Phil “Professional Economist” please address this graph as it looks like over time rising minimum wage and teen unemployment well don’t have a strong correlation.
http://1.bp.blogspot.com/_Zh1bveXc8rA/SElnEQ0cfKI/AAAAAAAAARU/6O7FZJ0wnf4/s1600-h/Clipboard02.jpg
Spork
I miss the old DougJ. Before we knew he was a spoof. Please keep a handle in the drawer, you’re the first person I ever approved of sockpuppeting.
Phil
“No you linked another paper written by Neumark. We all know what he said as you have linked another three papers of his.
I almost want to believe Phil is an old school DougJ spoof but he really is arguing from the grand conservative method playbook. Find a study that confirms your biases, declare the issue over, dismiss any dissent as from left-wing cranks. Rinse. Repeat.”
Listen, believe whatever the hell you want. So much for reality based community. We’ve got an international cross panel data set that reaches pretty much the same conclusion across all countries and we’ve got a telephone survey of McDonalds workers in New Jersey that’s been discredited.
You’re siding with the latter. Which is fine.
So long as we’re CLEAR with that. Time for bed.
Ailuridae
@Phil:
Good-bye. Thanks for bowing out before addressing the actual full data set that has been provided to you thrice.
Its like arguing with a conservative version of an FDL bot.
Mark S.
@Ailuridae:
I’m not a professional economist, but I would say the teen unemployment rate pretty much tracks the general unemployment rate, at least since the 1970’s.
Can I haz Nobel now?
jl
@Phil: Too bad you left so soon.
Thanks for the international paper, again, by Neumark.
You should do a literature search and look at recent work by researchers other than Neumark. Not that there is anything particularly wrong with that person, but there are other researchers out there.
DonBelacquaDelPurgatorio
@Phil:
That caps thing is a nice touch, Doug.
Ailuridae
@Mark S.:
Let me find that angry bear link. And, no, I wasn’t suggesting anything else
http://angrybear.blogspot.com/2009/02/minimum-wage-disinformation.html
Yutsano
I was kinda paying attention at work but I didn’t realize this whole thread was going to turn out to be a massive popcorn moment.
BillCinSD
The standard neo-liberal line assumes that prices are properly set before the minimum wage rise, so that a minimum wage price rise would cause all rationale business owners to then get rid of all jobs that are currently below the new minimum wage.
Real business owners live in a more complicated world so can for instance raise prices — in Florida the total cost of a raise from $5.15 to $6.15 in 2004 was estimated to be 1/25 of 1 % of revenues — 1 penny on a $20 sweatshirt to about 28 cents on a $20 fast food meal — or wait to determine the effect on their bottom line, in addition to letting go workers or relocating. see http://www.peri.umass.edu/fileadmin/pdf/published_study/PS17.pdf
The Main Gauche of Mild Reason
Who wants to bet Phil is not, in fact, an economist and is actually an MBA/business type who, like Megan McArdle, fancies himself an expert on economics?
I think that’s the best fit for the sort of things he’s saying, like the amazing faith in any working paper published through NBER, etc.
Mark S.
@Ailuridae:
Oh, I didn’t think you were. I just took a look at the graph and was impressed at how the peaks all lined up with recent recessions.
BTW, the first comment in the Angry Bear post is classic:
gwangung
@The Main Gauche of Mild Reason:
Don’t bet against a sure thing.
He argues like an MBA person; most economists get some cursory exposure to scientific methodology (which his arguments show no trace of; I mean, what real economist uses only one author to argue from?).
Ailuridae
@The Main Gauche of Mild Reason:
The better question is who would actually take the other end of a bet such as that? I would guess like McMegan he majored/concentrated/emphasized in Finance or Economics in a mid-tier B-School program.
Ailuridae
@Mark S.:
But here’s the thing that isn’t even research. Its just running some regressions on commonly available data sets that you think anyone would do who was making the claim that raising the minimum wage would increase teen unemployment. Unless, you know, you were convinced it had to and then you would goofball your endpoints to reach the same conclusion.
I wonder if conservatives would trade an abolished minimum wage for an a passage of a beefed up EFCA.
Check it
Isn’t what you really mean, that you are an “agnostic in science”? Or is it, to be fair, all the blatant misinformation that has been promulgated on this subject; leaving us, as a country, wildly misinformed about the topic.
Here’s some information on it that I am sure as an “agnostic” you are not familiar with, in the context of yet another set of wildly manipulative, misinformed, and erroneous assertions from yet another “leader” who is misinforming Americans, and who knows almost nothing about the subject matter (or is dissembling left and right) about which this person nevertheless continues to nationally espouse views. Similar to many.
Gravenstone
Semi-entertaining thread, although Phil’s attitude dampened things a bit. Starting with his second post it became obvious he was one of John’s old stalkers (like JWW, for instance) who seem to exist for no other reason than to parachute into a thread and start lobbing shit grenades left and right. As such they deserve no further engagement. Rather, folks like that simply need to be ignored or mocked, as is ones personal preference.
Michael
FWIW, the glibertarians wrote a long article in 1995 discussing most of the studies linked above:
http://reason.com/archives/1995/06/01/minimal-evidence
On Card and Krueger, for instance, their data was found to be unreliable in subsequent study. ‘In short, using the actual payroll data instead of the survey “guesstimates” effectively refutes the Card/Krueger findings.’
Jason
I like “the literature is thoroughly compiled and reviewed in this 184 page article.” Wow, that’s long! Here, I will cite original research on the topic and then point you to the literature review, which is generally the part where no original research exists. Trust me, though: it’s *thorough.*
Jason
Man I didn’t even notice the whole Phil thing had slayed the thread.
tootiredoftheright
@clone12:
Aren’t the mininum wage increases meant to deal with cost of living increases or inflation? Either of those would hurt companies more then a wage increase among the workers since their lower and middle employees would therby have less purchasing power as would the rest of the employed people around the country so less services are bought as well as less goods therby companies would earn less money.
Remember November
@Violet:
Is this for real?
What about
How to SPot RUssia from your house
How to deflect ethics charges by creating your own closed-end loop ethics charge against yourself.
How to suck up to and then distance yourself from grifters like Ted Stevens
How to quit halfway through a Governorship
How to go to 5 colleges and get one degree
How to shoot wolves from helicopters for 150$ paw bounties so your hunting tourism will flourish.
How to put your special needs child in the spotlight while decrying media attention on your family.
How to put lipstick on a pitbull
How to take 400 million form the US govt for a bridge to nowhere that you supposedly were against.
bliprob
What’s infuriating to me is that he attacks with an estimate of the outcome, instead of looking for a trend in the actual data.
Emma
One night, ONE NIGHT, away from this place and it turns into a screening of Avatar. Missed all the fun, dammit!
JGabriel
DougJ @ Top:
Too bad, because it makes that point really well.
.
JGabriel
Also. reading through the thread, I see that someone named Phil makes the point that Phil is an asshole really well.
Interesting, how that happens.
.
Waynski
Truth is, the minimum wage is the new dog whistle, as welfare was in the past. The Southern strategy still works, in the South anyway, so they’re going to the “us-them” well once again at a less audible decible to everyone else. You don’t have a job hard-working, real Murican wingnut white person? It’s because brown people are making too much money flipping burgers, also too.
tigrismus
Hee hee! I love the whole “it’s passed peer-review because the author has written again and again reiterating his original point” vibe.
EIGRP
@Ailuridae: If we take Conservatives at their word that lowering minimum wage increases employment…. we should call all Conservatives socialists. They are taking money away from the poor people to give it to other poor people!
I wonder how they would deal with that. They would probably say it’s stimulus.
-Eric
Howlin Wolfe
@Brick Oven Bill: “machidora”? WTF? You mean “machiladora”? Stoopid troll being stoopid. what follows this typo is even more stoopider.
You’ve got a PhD in Teh Stoopid, though.
licensed to kill time
@Howlin Wolfe:
Actually it’s “maquiladora” but you are right about the rest ;-)
Howlin Wolfe
@Phil: What a conceitied gasbag Phil is. This kind of arrogance comes along once every decade, in someone who is quickly forgotten.
@licensed to kill time: Well, that’s the teh gazoogle spelled it, too.
Howlin Wolfe
@Phil: Phil, do you talk to your boyfriend this way when you’re mad at him?
Tax Analyst
So I guess by now everybody’s had their fill of “Phil”?
A flawed assumption is still a flawed assumption even when you keep saying it LOUDER and LOUDER