The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups. Henry Hazlitt
So what do you call an economist who claims to have looked at the longer and indirect consequences of a proposed course, but who---based on his assertions---clearly has not? An economist who claims to inquire into what the effect of a given policy will be on all groups, but discards all studies that conflict with his bias? I could come up with a choice adjective or two, however, so as to not stoop to the level of my subject, I'll keep them to myself.
Here's a snippet from Paul Krugman's column featured in this morning's NY Times:
When it comes to the minimum wage, however, we have a number of cases in which a state raised its own minimum wage while a neighboring state did not. If there were anything to the notion that minimum wage increases have big negative effects on employment, that result should show up in state-to-state comparisons. It doesn’t.
Oh it does! As good economist Don Boudreaux---pointing to a 2013 study---exposes in his response (a letter to the NY Times) to Krugman's glaring omissions. Here's a snippet:
He asserts, for example, that “If there were anything to the notion that minimum wage increases have big negative effects on employment, that result should show up in state-to-state comparisons. It doesn’t.”
Yet it does – at least in many studies that Mr. Krugman would have your readers believe do not exist. The most well known of these state-by-state comparison studies that find negative consequences of minimum-wage legislation are by economists David Neumark and William Wascher.*
I have a client who owns a California-based business employing approximately 150 workers at the $8/hour minimum wage. Recently passed legislation (minimum wage in California goes to $9 July 1st of next year and $10 in 2016) adds labor costs (assuming they're all full-time) to the tune of $150,000 for 2014, double that in 2015, then double that in 2016. Ultimately, it's $600,000 per year (not accounting for the increased payroll taxes [Hmm? Ever think about that incentive to legislators?]) that my client is trying to figure out how, what and whom to cut to make it work. Bummer for the hardworking standout striving to ascend beyond the (even the $10) minimum wage ranks---assuming, that is, he keeps his job (or all of his hours). Bummer as well for the would've been new hire.
Seriously, you shouldn't have to know a soul who employes low-skilled individuals, or be an employer of low-skilled individuals yourself---or, goodness, have been awarded a Nobel prize---to understand that a hike in the minimum wage stands to do real harm to the very group its politically-motivated proponents pretend to concern themselves with.