Republican leader John Boehner must have some expertise when it comes to labor economics. Either that, or the New York Times is allowing him to make misleading claims without being challenged.
In a report today (2/14/13) about Barack Obama’s pitch to raise the minimum wage, the Times‘ Mark Landler and Jonathan Weisman report:
Yet even in stronger economic times, minimum wage increases have been heavy political lifts. The last increase passed in 2007, after Democrats swept to control of Congress, and even then it had to be tacked onto an Iraq War financing and Hurricane Katrina relief law.
Republicans swiftly rejected Mr. Obama’s latest attempt, saying it would only exacerbate the jobless rate.
“I’ve been dealing with the minimum wage issue for the last 28 years that I’ve been in elected office,” House Speaker John A. Boehner said to reporters on Wednesday. “And when you raise the price of employment, guess what happens? You get less of it.”
This comment goes unchallenged in the piece, so one might conclude that Boehner knows something about the issue.
Or perhaps he doesn’t. A new paper from Center for Economic & Policy Research economist John Schmitt points out that Boehner’s claim is wrong. From the CEPR press release (2/13/13):
“This is one of the most studied topics in economics, and the evidence is clear: modest minimum wage increases don’t have much impact on employment,” Schmitt said. “An increase to $9.00 per hour would be hugely important for the workers getting it, but the idea that this would lead to less employment is just not supported by the evidence.”
And:
Schmitt’s paper notes that “two recent meta-studies analyzing [scores of separate studies] conducted since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers.” The paper concludes that the most likely reason for this is that “the cost shock of the minimum wage is small relative to most firms’ overall costs and modest relative to the wages paid to low-wage workers.”
A reminder, if one were needed, that the failure to factcheck is not just a problem during presidential campaigns.
There’s also the fact that, in the particular economy that we’re in, people with the lowest incomes spend all their income. A rise in the minimum wage ought to have a modest stimulative effect, not a bad thing.
@ Greg – precisely. It’s been noted by other places that the money ends ups in the hands of the 1%’ers anyway, that is just life; but the money that passes through the hands of the working class is what makes america work. It’s what supports the Mc D’s just down the street, and the Doctors just up it.
That NY Times article refered to studies showing that increases in the minimum wage don’t increase unemployment. They wouldn’t be doing their job if they didn’t show Boehner’s reasoning, incorrect or not, becuase it’s a belief widely held among the opponents of higher minimum wages. They’re showing the arguments that will shape the coming debate, and they don’t treat Boehner’s remark as anything other than his own opinion, while they cite studies to show that minimum wage increases are helpful.
Considering that labor economics has been pretty clear in its record that increases in minimum wage have little or no effect on employment, the article could at least have noted that Boehner’s widely-held belief is not supported by the evidence.