Quotation of the Day…

by Don Boudreaux on August 21, 2014

in Data, Myths and Fallacies, Reality Is Not Optional, Seen and Unseen, Work

… is the closing paragraph of GMU Econ students Liya Palagashvili’s and Rachel Mace’s superb essay in today’s Wall Street Journal; Liya and Rachel here expose some errors committed by those with a zealous will to believe in the miraculous powers of minimum-wage legislation to read data carelessly in support of their faith:

The data are simply no reason to reject this fundamental economic precept: When you raise the cost of hiring, companies will do less of it. Until there’s a sound theory for why raising the price of low-skill labor doesn’t lessen employers demand for it, and until that theory is confirmed by serious, empirical analysis based on adequate data, the only legitimate minimum-wage stance is that it shrinks the employment options for the very workers it ostensibly intends to help: the poorest of the low-skilled.

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