Think Before You Sign
By Bryan Caplan
Alex Tabarrok berates economists who signed a petition in favor of raising the minimum wage. He’s willing to forgive them for disagreeing about the magnitude of the disemployment effect, but not for failing to check facts from the almanac:
Nevertheless, parts of the letter strikes me as absurd. The letter says, for example, that “The minimum wage is also an important tool in fighting poverty.” Rubbish. But don’t take my word for it.
The minimum wage is a blunt instrument for reducing overall poverty, however, because many minimum-wage earners are not in poverty and because many of those in poverty are not connected to the labor market. We calculate that the 90-cent increase in the minimum wage between 1989 and 1991 transferred roughly $5.5 billion to low-wage workers…. an amount that is smaller than most other federal antipoverty programs, and that can have only limited effects on the overall income distribution.
The source? Card and Krueger in Myth and Measurement (p.3).
Could Alex have done any better? Sure. Over 500 economists signed the letter on immigration that Alex wrote – and they didn’t have to endorse anything absurd to do it!