Carpe Diem reports on the NYT views on the minimum wage:
It’s pretty amazing how the New York Times editorial board has changed its position over the last 27 years on the minimum wage law government-mandated wage floor that guarantees reduced employment opportunities for America’s teenagers and low-skilled workers
Professor Mark Perry has a suggestion for the Times:
I think The NY Times editorial board needs a little remedial education on the effects of government price controls. They could start by reviewing NY Times columnist Paul Krugman’s textbook “Microeconomics,” especially the coverage of “price floors” in the section on “Price Controls and Quotas: Meddling with Markets” in Chapter 5 (Supply and Demand). As Krugman’s chart above shows (from p. 138), a government mandated price floor above the market-clearing level like the minimum wage generates two effects: a) a decrease in the quantity demanded (of low skilled workers for example in the case of the minimum wage) and b) an increase in the quantity supplied (of low skilled workers in the case of the minimum wage). Together, those two inevitable effects lead to an inevitable and unfortunate result: a surplus of low (and unskilled) workers. What’s another name for a surplus of low (and unskilled) workers? Increased unemployment of low (and unskilled) workers, e.g. teenagers, and especially minority teenagers.
If the goal was to guarantee that many low (and unskilled) workers would be unemployed, one of the most effective ways to achieve that goal would be to increase the minimum wage. And the higher the increase, the higher the level of unemployment. Despite the wishful thinking of politicians, unions and the NY Times editorial board, the laws of supply and demand are not optional. The NY Times had it right in 1987 – the right minimum wage is $0.00.
Does Paul Krugman really believe the things he says on the NY Times editorial page?
