In her Wednesday column “Raise the bar on minimum wage,” Jessi Devenyns argued that “it is our generation’s responsibility to inform the government and citizenry about the positive effects of implementing higher wages.” Devenyns cited an article in The New York Times that referenced research published by the Center for Economic and Policy Research to argue that the minimum wage could be increased without adversely affecting employment. However, after reviewing the research myself, I have serious doubts about its quality. For example, anywhere from 57 to 85 percent of the results were deemed statistically insignificant. That is, anywhere from 57 to 85 percent of the results are likely to have occurred by chance.
In my opinion, economics is plagued by mathematical and statistical sophistry. Effects that are seen are almost always considered, but effects that are not seen are almost always forgotten. Frederic Bastiat wrote about this in his essay, “That Which is Seen, and That Which is Not Seen,” in the 1800s. In the case of minimum wage laws, the effect that is seen is a higher wage. The effect that is not seen is the employment that did not materialize because of the laws.
While it is true that the real value of the minimum wage has decreased over the past 30 years, simply increasing its nominal value will do nothing to solve the problem. Such proposals distract from the real issue at hand: The system we live in today was created by, and for, the most powerful institutions in the world. The Federal Reserve is arguably the lifeblood of this system. If you would like to learn more about the Federal Reserve, I recommend reading the materials on its website as well as the freely available book, “The Case Against the Fed,” by Murray Rothbard. That way you can make an informed decision for yourself.
Aerospace engineering senior