Here’s a letter to the Wall Street Journal:
U.C.-Berkeley professor Michael Reich argues that the “bulk of the credible evidence” shows that minimum wages have only small negative effects on employment (Letters, Oct. 3). To bolster his argument he claims that “[a]s shown by surveys conducted by the University of Chicago’s Booth School of Business, a majority of the economics profession agrees.”
Prof. Reich’s claim about the Booth School surveys is mistaken. First, these surveys are of fewer than 50 economists from a mere seven universities. No valid inference about what “a majority of the economics profession” believes can be drawn from such a small and non-random sample of economists.
Second and more importantly, only a minority of the economists surveyed by Booth agree that minimum wages have only small negative effects on employment. The most recent Booth survey on the minimum wage was conducted in September 2015. In that survey – which asked about the employment effects on low-wage workers of raising the hourly minimum wage gradually to $15 – only 24 percent of the surveyed economists believed that such a wage hike would have no substantial effect on workers’ employment prospects, while 26 percent of the surveyed economists believed that such a wage hike would indeed substantially decrease low-wage workers’ employment. (38 percent of the surveyees were “uncertain.”) In the previous Booth survey on the minimum wage, conducted in 2013, a plurality – 34 percent – of the surveyed economists agreed that raising the minimum wage would “make it noticeably harder for low-skilled workers to find employment.” (32 percent disagreed while 24 percent were uncertain.)
Contrary to Prof. Reich’s claim, the Booth surveys emphatically do not reveal that most economists share his belief that minimum wages have only small negative impacts on the employment prospects of low-skilled workers.
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
