Article Image

IPFS News Link • Employee and Employer Relations

Debunking a Misleading Minimum Wage Study

• fee.org by Dave Thompson

 Unfortunately, it has received media attention, including a piece or two by Nick Hanauer, "America's worst minimum wage pundit." Fortunately, at least some of the coverage is negative – as it should be. The NELP study is not serious, and it's also flat wrong.

Numerous people have pointed out the primary issue: NELP asked the wrong question. Asking the wrong question is a common but serious error, and can invalidate your result. Here's a revealing sentence from the report:

"To the contrary, in the substantial majority of instances (68 percent) overall employment increased after a federal minimum-wage increase."

While they claimed to look for correlation, they didn't. For that sentence to make sense, their question must have been: "Is a raise in minimum wage more likely than not to cause a reduction in total jobs?" Their answer is no. But is that the usual meaning of "kill jobs"?

The Wrong Question

I grew up on a farm, and we had barn cats. These cats were mostly strays, mostly wild, and all mortal. If we had ten cats in 1997 and eleven in 1998, can we say no cats died in 1997? Of course not. All we can say is that more arrived or were born that year than died, full stop. Something could have still killed one, two, or ten that year.


www.universityofreason.com/a/29887/KWADzukm