Helpful, harmful, or hype? 5 economists weigh in on Obama's minimum-wage proposal
Helpful, harmful, or hype? 5 economists weigh in on Obama's minimum-wage proposal
- February 13, 2013
- David Neumark, economics Chancellor's Professor and Center for Economics & Public Policy director, is featured in The Atlantic and Yahoo! Finance February 13, 2013
From The Atlantic:
Along with his frequent co-author, Federal Reserve Board economist William Wascher,
David Neumark of the University of California, Irvine, is widely thought of as the
leading conservative voice on the effects of minimum wage laws. The pair produced
one of the seminal modern studies on the topic in 1992, arguing that a 10 percent
increase in the minimum wage could reduce young adult employment by up to 2 percent….A
White House "fact sheet" claims that the proposed wage hike would not reduce employment,
referring to studies that "built on earlier research and confirmed that higher wages
do not reduce employment."…Moreover, the fact sheet relies most heavily on the only
study it cites directly — a 2010 paper in the Review of Economics and Statistics,
which asserts that there are "no detectable employment losses from the kind of minimum
wage increases we have seen in the United States."….In a new study, however, Ian Salas
(UC Irvine), William Wascher (Federal Reserve Board) and I subject this study to rigorous
empirical testing. We conclude that its claims are unfounded, and that the evidence
continues to point to disemployment effects of the minimum wage. This conclusion is
consistent with a large body of economic research on the minimum wage that William
Wascher and I have surveyed, most of which shows that minimum wages reduce employment
for the least-skilled workers whom the President's proposal is intended to help.
For the full story, please visit http://www.theatlantic.com/business/archive/2013/02/helpful-harmful-or-h....
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