Here’s a letter to the Wall Street Journal:
Editor:
Jason Furman wisely explains that both the costs and the benefits of any proposed policy change must be taken into account in order to reach sound conclusions about that proposed change (“Left and Right Alike Are Blind to Tradeoffs,” January 8). Yet he slays a strawman by writing that opponents of minimum-wage legislation predict “that even modest increases in the minimum wage will cause massive job loss.”
I’ve followed the research and debate on minimum wages for over 40 years and have never encountered from any serious opponent of such legislation a prediction of “massive job loss.” David Neumark – among today’s most respected researchers of minimum wages and an opponent of this policy – is typical. He wrote in 2015 that “a reasonable estimate based on the evidence is that current minimum wages have directly reduced the number of jobs nationally by about 100,000 to 200,000” – or 0.13% of the U.S. labor force in 2015. Far from massive, this figure is minuscule.
Many economists nevertheless, and for good reason, oppose minimum wages. Not only do minimum wages result in somejob losses for low-skilled workers, they also reduce for workers who are employed the availability of fringe benefits. Even worse, Neumark and Jyotsana Kala recently found (confirming earlier research by Thomas Sowell and Walter Williams) that the distribution of job losses due to minimum wages is (unintentionally) racist: workers who lose jobs because of minimum wages are far more likely to be black than white.
Although the number of jobs destroyed by minimum wages is relatively tiny, they are nevertheless real. Combined with minimum wages’ other ill consequences, they render this intervention economically harmful and ethically indefensible.
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
