Repost: How to spot a bogus minimum wage study (with Ben Zipperer)

Pitchfork Economics with Nick Hanauer

Civic Ventures

Business, Government, News, Politics

4.8 • 1.5K Ratings

🗓️ 5 February 2021

⏱️ 46 minutes

🔗️ Recording | iTunes | RSS

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Summary

Here’s another resource from the archive that will help you wade through the loud and often misleading coverage of the Raise the Wage Act. Not all minimum-wage studies are equal. Some of the most headline-grabbing negative reports on the effects of the minimum wage were commissioned and promoted by right-wing organizations looking to legitimize trickle-down policies that hurt workers. How can you spot studies that aren’t worth their salt? Economist Ben Zipperer joins Nick and Jasmin to reveal some of the tricks that economists pull, and to help us understand how some studies can conclude that raising wages will kill jobs—even though, as we know, the opposite is true. Ben Zipperer is an economist at the Economic Policy Institute. His areas of expertise include the minimum wage, inequality, and low-wage labor markets. He has published research in the Industrial and Labor Relations Review and has been quoted in outlets such as The New York Times, The Washington Post, Bloomberg, and the BBC. Twitter: @benzipperer, @EconomicPolicy Show us some love by leaving a rating or a review! RateThisPodcast.com/pitchforkeconomics Further reading: Gradually raising the minimum wage to $15 would be good for workers, good for businesses, and good for the economy: https://www.epi.org/publication/minimum-wage-testimony-feb-2019/ Six reasons not to put too much weight on the new study of Seattle’s minimum wage: https://www.epi.org/blog/six-reasons-not-to-put-too-much-weight-on-the-new-study-of-seattles-minimum-wage/ Studies mentioned in the episode: New EPI study: The Effect of Minimum Wages on Low-Wage Jobs: Evidence from the United States Using a Bunching Estimator: https://www.nber.org/papers/w25434 Card and Krueger: Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: http://davidcard.berkeley.edu/papers/njmin-aer.pdf University of Washington study - Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle: https://www.nber.org/papers/w23532 Website: http://pitchforkeconomics.com/ Twitter: @PitchforkEcon Instagram: @pitchforkeconomics Nick’s twitter: @NickHanauer

Transcript

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0:00.0	Hey, pitchfork listeners Goldie here with the minimum wage still in the news.
0:05.4	So we've decided to re-release a previous episode on how to spot a bogus minimum wage study
0:14.1	with economist Ben Zipperer. If you're as nerdy and wonky as me, I know you're going to love it.
0:23.6	When people see something that says studies show that the minimum wage kills jobs,
0:28.4	they shouldn't just take it as gospel. If you were to look at all studies, what you would find
0:33.4	is that the average employment effect of the minimum wage is actually really small. They don't
0:38.4	make these arguments because they're true, they make them because they're the most effective way
0:42.5	ever devised to make rich people richer. From the offices of civic ventures in downtown Seattle,
0:57.4	this is pitchfork economics with Nick Hanauer. It's like Econ 101 without all the B.S.
1:09.5	I'm Nick Hanauer, founder of Civic Ventures. I'm Jasmine Weaver, I'm the executive vice president
1:15.1	here at Civic Ventures. In this episode, we're not talking about the minimum wage, we're actually
1:21.7	going to go deep on how economists study the minimum wage. That's a ridiculously wonky thing,
1:30.3	and probably will test the patience of even our most hardcore listeners. But it's so important
1:37.0	to understand because how we study the minimum wage is so different from certainly what my
1:44.4	intuitions were when I first got into this work. When you understand how the minimum wage is
1:50.6	studied, what the methodology actually is, it becomes really, really clear how easy it is to
1:56.8	manipulate that data and how if you aim to, you can absolutely show anything you want if you
2:04.4	so desire. Absolutely, and so when people see something that says studies show that the minimum
2:09.5	wage kills jobs, they shouldn't just take it as gospel. Exactly. And among the things that we're
2:16.4	going to learn on this episode is that there's a difference between theoretical predictions based on
2:24.0	neoclassical economic assumptions, which is sometimes what people in the media will say is studies
2:30.6	show that the minimum wage will kill jobs. And that is in turn different from actually empirical
	...

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