July 13, 2017

A. BARTON HINKLE: Is It Time to Start Dismissing ‘Economics Deniers’?

In late June, researchers published a careful and data-rich study on Seattle’s minimum-wage law. It found that the city’s graduated hike in the minimum wage is costing thousands of jobs and cutting the number of hours worked by people in low-pay jobs. In the aggregate, Seattle workers are losing millions of dollars in wages thanks to the law. The study has drawn praise for its analytical rigor; one economist at MIT called it “sufficiently compelling in its design and statistical power that it can change minds.”

Or not.

Since its publication, liberals have given the study hyper-skeptical treatment, claiming to find all sorts of shortcomings with its methodology, data set, and so on. They point to a different study, from the University of California at Berkeley, which examined the law’s effects on the restaurant industry and found no statistically measurable effect.

Even Seattle’s political leaders are piling on, although they commissioned the research in the first place.

The idea that the price of something has no effect on demand for it sounds pretty funny, coming from liberals. After all, progressives generally support raising taxes on cigarettes to discourage people from smoking. Last November several cities joined the growing list of liberal demesnes that have imposed soda taxes—Berkeley, Philadelphia, San Francisco, etc.—to discourage consumption of sugary drinks. Heck, some localities even have firearms and ammunition taxes. One of them, in fact, is Seattle—where gun sales have dropped as a result.

The cognitive dissonance can be head-spinning.

As usual.