Say Anything Blog

Steve Chapman:

The Economic Policy Institute, a Washington research group, recently unveiled a newspaper ad trumpeting a statement signed by some 675 economists who endorse raising the minimum wage from $5.15 an hour to $7.25. Among the signers are Nobel Laureates Kenneth Arrow, Clive Granger, Lawrence Klein, Robert Solow and Joseph Stiglitz.

A generation ago, it was universally agreed, even among liberal economists, that raising the minimum wage was a mistake because it would produce higher unemployment. Force companies to pay the lowest-skilled workers more than they are worth, and companies will get rid of them. In this view, it’s better to have a job that pays $5 an hour than to lose one that pays $5.15.

That insight violated, but didn’t curb, the perennial liberal desire to pursue social improvement at other people’s expense. In the past, Democrats boosted the minimum wage in stubborn disregard of the wisdom of academia. Lately, though, they have been able to brandish studies alleging that in the real world, an increase doesn’t raise unemployment and may reduce it.

Read the whole thing.