Teaching in the smartphone age means students are never more than a few seconds away from the dreaded “fact check.” In Econ 101, I frequently receive questions about studies showing that the minimum wage does not generate unemployment. Such studies have become something of a cottage industry since Card and Krueger (1994), a landmark study comparing Pennsylvania and New Jersey, purporting to demonstrate no harmful effects on employment from the minimum wage.
However, it would be short-sighted to conclude from such studies that the minimum wage generates no job loss. In some cases, even well-designed empirical studies can obscure the presence of disemploying effects.
I’m not against empirical studies—I think there should be more of them. But empirical work is complex, and it ought always to be guided by theory. I hope that economists think more carefully about how empirical work can fail to show job loss where it is, in fact, present. High-octane labor economists have been doing just that in recent years. David Neumark, William Wascher, and Jeffrey Clemens are exemplars.
Meanwhile, skilled economic communicators like Don Boudreaux, Robert Murphy, and Steven Landsburg, have been patiently dissecting every last argument for the minimum wage. They’ve been originating countless new thought experiments, analogies, and parables to convey the consequences of price floors. And in many cases, they’ve pointed out the flaws in empirical studies, but I haven’t seen a one-stop-shop...
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