As Scott noted earlier today, the New York Times and its administration-lapdog columnists, like Paul Krugman, are promoting the Democrats’ proposal to raise the federal minimum wage. No surprise there. But at one time, the Times–even its editorial board!–knew better. On January 14, 1987, the Times editorialized: The Right Minimum Wage: $0.00. Then, someone at the paper understood the laws of economics:
[T]here’s a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market. …
An increase in the minimum wage to, say, $4.35 would restore the purchasing power of bottom-tier wages. It would also permit a minimum-wage breadwinner to earn almost enough to keep a family of three above the official poverty line. There are catches, however. It would increase employers’ incentives to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.
If a higher minimum means fewer jobs, why does it remain on the agenda of some liberals? A higher minimum would undoubtedly raise the living standard of the majority of low-wage workers who could keep their jobs. That gain, it is argued, would justify the sacrifice of the minority who became unemployable. The argument isn’t convincing. Those at greatest risk from a higher minimum would be young, poor workers, who already face formidable barriers to getting and keeping jobs.
What the Times wrote in 1987 is equally true today: “Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.” This is like a law of physics–but one which, the Times tells us, has now been “discredited.” Sure: just like the proposition that water flows downhill has been discredited. Left-wing economists carried out a couple of flawed studies that purported not to find an increase in unemployment under the conditions studied, and liberals have seized on them to claim that with regard to labor, the law of supply and demand has been repealed.
Nonsense. What has changed since 1987 is not the economic literature, but American liberals’ progressive detachment from reality. Nowhere can we see this decline more clearly than in the New York Times editorial board.