Just nonsense, nonsense

Relax Everyone: NELP’s New Report Says The Minimum Wage Doesn’t Cost Jobs

Someone has quite seriously (no, I do mean seriously) released a report pointing out that since the US has more jobs in 2016 than it did in 1938 then the minimum wage doesn’t cost jobs.

No, really. Someone’s even taken that report seriously.

This is well out beyond WGCE territory, isn’t it?

13 thoughts on “Just nonsense, nonsense”

  1. Are you talking about this paper?

    It looks at the change in employment in the year following each of the 22 increases in the federal minimum wage since 1938, and finds that on most occasions employment has gone up.

    If it were true that increasing the minimum wage has a significant downwards effect on employment, one would expect usually to see falls in the year following an increase, with a rising trend in between.

    So what’s your objection? (I haven’t read your Forbes article: it objects to my blocking ads.)

  2. It looks at the change in employment in the year following each of the 22 increases in the federal minimum wage since 1938, and finds that on most occasions employment has gone up.”

    Logically then, you should increase it more often because that’s the best way to create more jobs.

  3. You should read it Paul. And the paper, the problem with it should be immediately obvious. You’re usually pretty good at this economics stuff. They have looked at “total employment”. Not percentages, not some portion of the workforce, not unemployment. Instead, total number of people employed.

    They have not adjusted for population size. 1947 (first year of that series from memory) there were 60 million in labour force. Today some 161 million. Over the year’s that’s what, 1% increase in labour force per year? What do even critics think is the effect of a rise in the minimum wage?


  4. Tim,

    I don;t quibble on your deconstruction of the paper- “all they’ve shown is that more populous place have more jobs”- but is it possible that this conclusion is a simple reflection of their mindset? Is it not possible that they don’t see jobs as things that are created by people as opposed to governments thru legislation and public policy?

    Or in other words: “hooray for the benevolent and courageous state summoning the jobs fairy with the magical minimum wage laws to shower us in opportunities to thrive?”

  5. If they have used total numbers in employment and not adjusted for changes in population size then not simply nonsense but dishonest nonsense.

  6. Tim, couldn’t the whole report be summarised as “We didn’t find what we weren’t looking for”?

  7. Tim, you’re saying that may have been a negative effect on employment from minimum-wage increases, but that it would be less than the 1% annual trend growth?

    OK, I agree that’s possible. But have a look at the pull-quotes in the paper, such as “Any temporary advantage to our two-million employees would be more than offset by immediate unemployment within our industry”. The paper does succeed in demonstrating that such predictions are nonsense.

  8. No Paul, come on, it doesn’t. And what some blowhard in the restaurant industry association says about minimum wage isn’t the point that careful economists have been making is it?

    Do also note: the minimum wage for the tipped part of the restaurant industry (a large part of it) has hardly changed in 35 years. Was $2.03 an hour when I was doing it in 1981. Think it’s $2.30 now.

    Seriously, this report stinks and you know it.

  9. I have hearsay and conjecture that proves raising the minimum wage actually leads to more jobs. Who wants to pay me to publish it?

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