Economic Cluelessness on Prominent Display

by Don Boudreaux on September 3, 2016

in Economics, Myths and Fallacies, Work

Former GMU School of Law Dean Dan Polsby sent to me this link to a Ford Foundation page entitled “Celebrating the Fight for $15: How raising the minimum wage helps build an economy that works for all.

I’ve not yet listened to the long video that appears at the end of this page, but I read this page and watched the other, shorter videos.  There’s not a word in the text of this page or in the three featured shorter videos that as much as mentions, much less attempts to dispute with solid argument (rather than the typical curt dismissals offered while genuflecting toward Card-Krueger), the standard economic argument that forcing wages higher necessarily reduces employment prospects for low-skilled workers.  This omission seems to me to be more than passing strange, given that the standard economic argument is the chief economic argument against the minimum wage.

Judging by the text and the short videos, a person uninformed about this issue could be forgiven for thinking that opponents of minimum wages are simply brutish or greedy folk who don’t wish poor people to prosper or even to be “included” in the economy.  The text and the shorter videos are all premised on the notion that workers prosper largely by organizing, with the help of the state, to lay claim to slices of the economic pie that are larger than workers on the whole would get without state-backed unions and union-supported legislation, such as minimum wages.  This notion, of course, is false.  It is believed only by people who do not understand economics or who know too little relevant history.

Reading the text and watching those videos is painful, for it is to read and watch people who are completely ignorant of the economic way of thinking try to ‘do’ economics – and who obviously believe that what they write and say is germane and sensible.  It’s rather like how I imagine a competent automobile mechanic would feel if he encountered people who are completely clueless about automotive technology describing how they will build a magnificent ‘car of tomorrow’ using nothing but TinkerToys.  (It’s a good thing for humankind that the benefactor of the Ford Foundation had a better idea.)

I’ll have more to say about one aspect of this Ford Foundation page in a follow-up post.

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