Monday, December 04, 2006

Minimum Wage Update
Note: I will be traveling today and tomorrow with limited internet access, so any posts that go up over the next 36 hours or so will likely be posted without links, and will likely be brief. In addition, posting will almost certainly be sparse. I know I promised I'd be back full time after the LSATs, but bear with me and I promise I'll be back in full swing no later than Wednesday. My apologies.

Also, please note that today's posts will be timestamped according to when I wrote them, not necessarily according to the time they were posted, in EST even though I'm in the midwest.

A while back, I posted about the folly of raising the minimum wage. While driving to the airport this morning, I heard an interesting piece that's related to this issue. It seems that someone did a poll of (I think it was 200) American economists, with an effort to make sure the sample was a fair representation of the political spectrum found among the larger group. The main point was that while there are a few particularly divisive issues, by in large a mainstream American economist believes in fair trade, low taxes and low subsidies with very little political philosophical variation.

The exception cited by NPR's Morning Edition correspondent? The minimum wage. It seems that 38% of the sample wants to raise the minimum wage, while 47% wants it eliminated altogether.

This tells me two things. For one, I'm encouraged to know that such a large portion of economists see things this way. It also highlights how economically uneducated the political chattering classes are.

Second, while they didn't address the remaining 19%, I would bet that at least 4% of those expressed an opinion against raising the minimum wage, even though they are not looking for its outright elimination.

Why does that matter? It says that (assuming the sample is statistically significant, and actually representative of economists—two assumptions that I cannot investigate without reading the poll itself) a majority of economists do not believe that raising the minimum wage is a good idea.

So the next time you read a news article that says "While most economists agree that raising the minimum wage will result in job losses at the bottom end of the market, many believe that a modest hike from its current rate will not have a significant effect on unemployment rates," keep in mind that "many" most likely stands for "a small group, representing less than a plurality, holding a viewpoint that serves this author's basic assumptions about this issue."

1 comment:

Dave Justus said...

It would of course be quite possible for many economists to think that a modest hike will not have siginifigant effects on the unemployement rate while still believing that the minimum wage should be eliminated.

The two views are not inconsistant.