I think it's fair to say that these are two pretty shaky foundations to make the strong claims she wants to make about the minimum wage as a job killer. For my two previous posts on Ms. Baum-Sumner's soul-mate-see here:
http://lastmenandovermen.blogspot.com/2015/07/caroline-baums-wants-ny-times-to-censor.html
http://lastmenandovermen.blogspot.com/2015/07/on-minimum-wage-sumner-finds-his-soul.html
On the pure optics of it there's something visceral about someone like Ms. Baum who makes much more than the MW so worried about low income workers getting paid more.
While she accuses Krugman of being to confident in arguing that the MW won't be a job killer she herself is much too confident that it will be.
She claims that Obama lied about the effects on the MW because of the Washington Post factchecker(!) Apparently while she thinks the NY Times needs to be run like the RBC dominated economic journals, she thinks the WaPo is economically literate. Recall how outraged she was by this comment by the NYT editorial board:
"In March, every Republican in the House voted against a measure to raise the minimum wage. `When you raise the price of employment, guess what happens? You get less of it,' said Speaker John Boehner in February, espousing a party-line theory that most economists agree has been discredited." -- New York Timeseditorial, Jan. 2, 2014.
"This is one of the more outrageous political statements dressed up as economic theory from the editorial board of the New York Times. They should be ashamed of themselves."
http://lastmenandovermen.blogspot.com/2015/07/caroline-baums-wants-ny-times-to-censor.html
Yet she thinks that the WP cinches things here:
"Economists David Neumark and William Wascher reviewed more than 100 studies on the minimum wage in a 2006 paper for the National Bureau of Economic Research: "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research." Here's a summary of their findings: "The oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect." What's more, almost all the papers they reviewed "point to negative employment effects" for the U.S. and many other countries. The effect is greater for low-skilled workers, whom the minimum wage is designed to help. Overall, the authors found very little evidence of positive effects from raising the minimum wage."
"Neumark and Wascher responded to an "unbalanced" Sunday Review article on the effect of the minimum wage in a Dec. 8, 2013, letter to the editor. And the Washington Post's Fact Checker gave President Barack Obama two Pinocchios for his repeated assertion that "there's no solid evidence that a higher minimum wage costs jobs."
http://www.bloombergview.com/articles/2014-01-03/someone-please-help-new-york-times-with-econ-101
So in asking for help for the NYT's on economics she turns to the WP?! Again, as I said in my last post the field on the MW is contested among economists-it's 50-50. So if WP wants to give Obama two Pinocchios then she gets two as well as does Sumner and every other economist as it's contested.
As it is contested how can you make such confident assertions that those who disagree with you are 'lying?'
But for her to go to N-W for authority deserves more than just two Pinocchios.
"I think of David Card and Alan Krueger's empirical demonstration that increased minimum wages do not reduce employment as having two main components:
"Economists will admit that they know very little about the macroeconomy, which is why they use models to predict things like employment and inflation. They do know a few things about the behavior of individuals and businesses in the marketplace, a field known as microeconomics. If you learned anything from your Econ 101 class in college, hopefully it was the law of supply and demand. Lowering/raising the price of a good or service increases/decreases the quantity demanded. Similarly, producing less/more of something will raise/lower the price."
"If you don't believe it, just ask a friend why she didn't buy that pair of boots until it went on sale after Christmas. Or ask a small business owner about what goes into the decision to hire an additional employee."
Doesn't Econ 101 show that there are any number of other effects that can come into play? I mean doesn't it mention for starters, inelastic demand?
"I don't expect orthodox economists to absorb any time soon my unoriginal point that economic theory gives no foundation for the belief that minimum wages must lead to disemployment, even when one abstracts from less than perfect competition, principal agent problems, information asymmetries, etc. After all, mainstream economists are trained in mumpsimus."
http://robertvienneau.blogspot.com/2011/03/card-and-kruegers-research-on-minimum.html
http://lastmenandovermen.blogspot.com/2015/07/caroline-baums-wants-ny-times-to-censor.html
http://lastmenandovermen.blogspot.com/2015/07/on-minimum-wage-sumner-finds-his-soul.html
On the pure optics of it there's something visceral about someone like Ms. Baum who makes much more than the MW so worried about low income workers getting paid more.
While she accuses Krugman of being to confident in arguing that the MW won't be a job killer she herself is much too confident that it will be.
She claims that Obama lied about the effects on the MW because of the Washington Post factchecker(!) Apparently while she thinks the NY Times needs to be run like the RBC dominated economic journals, she thinks the WaPo is economically literate. Recall how outraged she was by this comment by the NYT editorial board:
"In March, every Republican in the House voted against a measure to raise the minimum wage. `When you raise the price of employment, guess what happens? You get less of it,' said Speaker John Boehner in February, espousing a party-line theory that most economists agree has been discredited." -- New York Timeseditorial, Jan. 2, 2014.
"This is one of the more outrageous political statements dressed up as economic theory from the editorial board of the New York Times. They should be ashamed of themselves."
http://lastmenandovermen.blogspot.com/2015/07/caroline-baums-wants-ny-times-to-censor.html
Yet she thinks that the WP cinches things here:
"Economists David Neumark and William Wascher reviewed more than 100 studies on the minimum wage in a 2006 paper for the National Bureau of Economic Research: "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research." Here's a summary of their findings: "The oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect." What's more, almost all the papers they reviewed "point to negative employment effects" for the U.S. and many other countries. The effect is greater for low-skilled workers, whom the minimum wage is designed to help. Overall, the authors found very little evidence of positive effects from raising the minimum wage."
"Neumark and Wascher responded to an "unbalanced" Sunday Review article on the effect of the minimum wage in a Dec. 8, 2013, letter to the editor. And the Washington Post's Fact Checker gave President Barack Obama two Pinocchios for his repeated assertion that "there's no solid evidence that a higher minimum wage costs jobs."
http://www.bloombergview.com/articles/2014-01-03/someone-please-help-new-york-times-with-econ-101
So in asking for help for the NYT's on economics she turns to the WP?! Again, as I said in my last post the field on the MW is contested among economists-it's 50-50. So if WP wants to give Obama two Pinocchios then she gets two as well as does Sumner and every other economist as it's contested.
As it is contested how can you make such confident assertions that those who disagree with you are 'lying?'
But for her to go to N-W for authority deserves more than just two Pinocchios.
"I think of David Card and Alan Krueger's empirical demonstration that increased minimum wages do not reduce employment as having two main components:
- Natural experiments, especially one comparing and contrasting New Jersey and Pennsylvania.
- A meta-analysis of previous published research on minimum wages
http://robertvienneau.blogspot.com/2011/03/card-and-kruegers-research-on-minimum.html
She then goes for even lower hanging fruit and chalks it up to 'It's supply and demand, Stupid.'
"If you don't believe it, just ask a friend why she didn't buy that pair of boots until it went on sale after Christmas. Or ask a small business owner about what goes into the decision to hire an additional employee."
Doesn't Econ 101 show that there are any number of other effects that can come into play? I mean doesn't it mention for starters, inelastic demand?
"I don't expect orthodox economists to absorb any time soon my unoriginal point that economic theory gives no foundation for the belief that minimum wages must lead to disemployment, even when one abstracts from less than perfect competition, principal agent problems, information asymmetries, etc. After all, mainstream economists are trained in mumpsimus."
http://robertvienneau.blogspot.com/2011/03/card-and-kruegers-research-on-minimum.html
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