B. Caplan wrote:
Think again. C/K followed up with a whole book on empirical research on the minimum
wage, and they have made a major impact. And while their study was not perfect, I'd
put it at the 90th percentile of quality for empirical work. There has been a lively
followup debate, but I don't think anyone "won" (if by "won" one means that a new
consensus emerged that the minimum wage clearly had negative employment effects).
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For those on the List who have a little extra space in their personal library, the
title of the Card Krueger offering (now in paperback) is Myth and Measurement: The New
Economics of the Minimum Wage. I have to confess that I don't have the book on my
shelf (although I was forced to read much of it - forced by a course syllabus),
primarily because I try to follow the Stiglerian rule that any book worth reading is a
book worth owning.
To suggest that their work had a major impact is an understatement. Rarely has there
been such a clear case of bad economics driving bad politics. The Beltway was abuzz
with Card/Krueger data for a far longer time than the average shelf life of most
economics in Washington. However, to dismiss their study's shortcomings with a blanket
comparison to the 90% of mediocrity that comes out of academia . . . well, I can't
think of a more back handed book recommendation than that. In addition, I wasn't
aware that a new consensus formed around the negative effects of the hermetically
sealed minimum wage. The old consensus was there all along . . .and I think remains
firmly there.
Of course I acknowledge that I may in fact be biased and too intent on preserving the
core underpinnings that I once thought all economists held dear: the benefits of free
trade and the negative employment effects of the minimum wage. Before you know it,
someone is going to come along and suggest that demand curves slope downward.
Oops, sorry, that already happened.
J. Morrison
New York, NY
