Obama and the Evidence on the Employment Consequences of Minimum-Wage Legislation

by Don Boudreaux on December 6, 2013

in Myths and Fallacies, Politics, Work

Greg Mankiw is too kind.  He describes as “incorrect” and “misleading” this passage from a recent speech by Pres. Obama:

Now, we all know the arguments that have been used against a higher minimum wage. Some say it actually hurts low-wage workers — businesses will be less likely to hire them. But there’s no solid evidence that a higher minimum wage costs jobs.

I describe Obama’s claim here not merely as “incorrect” or “misleading”; I describe it as a lie.  Obama knows – or he recklessly misses the fact – that, as Mankiw correctly notes, there is indeed a great deal of solid evidence that a higher minimum wage reduces the employment prospects of low-skilled workers.  There is also, as Mankiw points out, contrary evidence.  But for the President of the United States to say that “there’s no solid evident that a higher minimum wage costs jobs” is an outright falsehood.

No surprise, of course.  Obama is a successful politician.  For a successful politician to be unwilling to lie would be akin to a successful prostitute being unwilling to undress in the presence of paying clients.  Such unwillingness is inconceivable, for each activity is a key requirement of each of these respective jobs.

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