More than two decades beyond the Cold War, the Employment Policies Institute yesterday published a full-page ad [pdf] in the New York Times identifying some of the “radicals” among the 600 economists who signed a letter to President Obama in January advocating an increase of the federal minimum wage of $10.10 an hour.*
Peter Coy interviewed Michael Saltsman, the organization’s research director:
I asked Saltsman if he thinks the ad is Red-baiting. “Not at all,” he said. “It’s just, that’s not somebody we should be listening to as an expert as to whether we should raise the minimum wage.”
Wait, that’s not all. The ad concludes by advising readers to “listen to the consensus of 85 percent of the best economic research,” implying that the seven Nobelists and eight former AEA presidents who signed the letter are in a tiny minority. I asked Saltsman where the 85 percent came from, and he pointed me to a literature review by two economists who have written against a higher minimum wage, David Neumark of the University of California-Irvine and William Wascher of the Federal Reserve Board. According to their paper (pdf), 28 of the 33 studies “that we regard as providing the most credible evidence” point to negative employment effects.
Two points to make there. One is that Neumark and Wascher, while highly respectable economists, may not have the last word on which studies are most credible. Second, it might be a good idea to raise the wage floor even if there are negative employment effects, as long as they’re not too large. In fact, that’s pretty much where a lot of the economists surveyed last year by the University of Chicago’s Booth School of Business came down when surveyed last year.
Never mind, though. Let’s talk about the Marxists.
*Full disclosure: I am one of the Ph.D.-in-Economics-carrying individuals who signed the letter.