Saltsman wants readers to believe that economists have discredited Card and Krueger’s finding that a 19% increase in New Jersey’s minimum wage did not cause job loss. He’s just wrong. Nobel laureate Paul Krugman says the study “has stood up very well to repeated challenges, and new cases confirming its results keep coming in.” And even the most ardent conservative critics could not claim that the New Jersey increase caused statistically significant job loss. Furthermore, a groundbreaking peer-reviewed 2008 paper (that Saltsman chooses to ignore),“Minimum wage effects across state borders: Estimates using contiguous counties,” generalizes the landmark Card and Krueger study to all contiguous county-pairs in the US that straddle a border, finding no adverse employment effects of increases in the minimum wage.
University of California, Berkeley (and former Economic Policy Institute) economist Sylvia Allegretto wants policy advocates to know about recent economics research about the minimum wage because it is so clear and convincing. Allegretto and colleagues Michael Reich and Arindrajit Dube carefully studied data on teen employment from 1990 to 2009 and found “that minimum wage increases—in the range that have been implemented in the United States—do not reduce employment among teens.” Previous studies to the contrary used flawed statistical controls and “do not provide a credible guide for public policy.”
The fact that more than 550 economists signed a statement calling for an increase in the minimum wage in 2007 cannot be dismissed because they were not all “labor economists.” No one claimed they were, and it’s irrelevant: agricultural economists and macroeconomists understand, just as labor economists do, that when reality doesn’t fit a model, it’s the model that has to change.
Saltsman has a loose regard for facts, but the fact is that economists no longer unthinkingly accept a nineteenth-century model that doesn’t fit the data, which show that modest minimum wage increases of the kind we have enacted in the past do not cause job loss.
Eisenbrey is vice president at the Economic Policy Institute.