Visitors Now:
Total Visits:
Total Stories:
Profile image
By Cafe Hayek (Reporter)
Contributor profile | More stories
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

Barry Ritholtz 1, Strawman 0

Sunday, October 23, 2016 7:49
% of readers think this story is Fact. Add your two cents.

(Before It's News)

(Don Boudreaux)

Tweet

Here’s a letter to the editor of BloombergView:

Editor, BloombergView

Sir or Madam:

Observing that Seattle’s economy continues to thrive following that city’s recent hike in its minimum wage, Barry Ritholtz dismisses opponents of minimum wages as politically biased purveyors of doom who are ignorant of economics (“Doomsayers Keep Getting it Wrong on Higher Minimum Wages,” October 21).  Alas, Mr. Ritholtz slays a strawman.

Contrary to Mr. Rithholtz’s impression, no serious economist predicts that minimum-wage hikes cause unemployment to “skyrocket,” the economy to “collapse,” and “restaurants and small businesses [to] close en masse.”  Instead, the chief prediction is that raising the minimum wage reduces employment of the least-skilled workers, both by destroying jobs outright for some of them and by reducing the number of hours that others of them work.  Yet because the percentage of workers who are so lacking skills that they are directly affected by minimum wages is, thankfully, small, these negative effects can, and often do, occur even as the larger economy and workforce flourish.

Mr. Ritholtz here is akin to someone who, upon discovering that a modest poll tax does not cause democracy to “collapse,” polling places to “close en masse,” and the number of people who steer clear of polling places on election day to “skyrocket,” concludes that opponents of poll taxes are economically ignorant “doomsayers” whose opposition to poll taxes is politically biased and should be ignored.

By the way, had Mr. Ritholtz consulted a serious study of Seattle’s minimum wage – such as that released in July by the University of Washington’s Seattle Minimum Wage Study Team – he would have discovered evidence that is indeed consistent with the standard economic case against minimum wages.  This team finds that, while of course low-skilled workers who remain employed receive higher wages, “the unintended, negative side effects on hours and employment muted the impact on labor earnings….  The effects of disemployment appear to be roughly offsetting the gain in hourly wage rates.”*

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

* “Report on the Impact of Seattle’s Minimum Wage Ordinance on Wages, Workers, Jobs, and Establishments Through 2015,” Seattle Minimum Wage Study Team, University of Washington (July 2016), p. 33.

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.