Some thoughts on the minimum wage: Discourse

I find comments like this from Dan Klein on Krugman's posts on the minimum wage (on David Henderson's post): "It seems to me that Paul Krugman has turned almost exclusively to rousing a low quality Democratic/social-democratic rabble, and hence will very rarely acknowledge any serious shortcomings of cows sacred to that rabble" extremely disheartening.

Comment threads and politicians are one thing. You're always going to get grand-standers in comment threads and running for election. We can pick them out and criticize them (as Krugman and Boudreaux chose to do) to neutralize that sort of discourse, or we can ignore it.

But when it comes to discussions in the community of economists, I feel like this nastiness is unhelpful to getting an enlightened public and enlightened policy. Economists don't always agree, and we ought to argue vigorously about that. We usually do. I worked with policy analysts, psychologists, and sociologists at the Urban Institute and these non-economist colleagues were always amazed at how brutal the economists would be to each other in brown bag seminars. That is a good thing.

But doing what Klein does here and acting like people who disagree with him are inciting some kind of ideological rabble is different, and it gives the impression that the arguments we have aren't informed and serious, when in fact they are. The public needs to take economics seriously and I think comments like this threaten that. In my opinion, Dan Klein spends far too much time trying to ideologically classify economists and paint them as motivated by ideology rather than actually critically addressing the arguments that are presented. I honestly have no idea what Klein thinks of the arguments for and against the minimum wage - in contrast to the very clear picture of what Henderson thinks of the arguments in the same post.

There are a couple other problems with the discourse around the minimum wage that I have a problem with. The other day I criticized the idea (expressed by Don Boudreaux) that empirical social science is indecisive, and in the last two posts I criticized the idea that economic theory somehow demands that people be opposed to the minimum wage. Another thing you hear that I think is misleading is that somehow it's just an uninformed public that thinks the minimum wage may not be bad for workers.

In fact, in 2000 only 46 percent of American Economic Association members agreed with the idea that the minimum wage increases unemployment. This is clearly a broader phenomenon than just the views of an uninformed public. Skeptics may argue that the Card and Krueger study just gave liberals cover to make such an audacious claim. Clearly Card and Krueger did make an impact (as I argued in the previous post on empirics, though, it made an impact because - regardless of what you think of the conclusion - it was a very well designed study), but it's not as large as you might think. In 1990, 60 percent of American Economic Association members thought that the minimum wage increased unemployment. That's a majority but it's hardly the sort of resounding consensus that you get on things like free trade.

Why?

Because there are excellent and very traditional, very non-fancy theoretical arguments to be suspicious of the negative employment effect and the empirical evidence seems to confirm that suspicion.

Anyone that tries to imply otherwise is either misinformed or misleading. We can have arguments, but the discourse ought to concern itself with arguments and not cordoning off minimum wage proponents as unintelligent or ideological or rebels against basic economics.