Tuesday, April 11, 2017

If Hot Air Had Any Journalistic Integrity, They'd Be Printing a Retraction

     Jazz Shaw of the Blog Hot Air has routinely campaigned against the minimum wage.  Like most non-educated commentators, he uses a simple supply and demand model to support his assumption.  His logic works something like this: increasing the minimum wage means the cost of labor increases; increasing cost = declining demand.  

     Unfortunately, this model does not fully capture all the nuances of the minimum wage.  Alan Krueger was one of the first economists to note that increasing the minimum wage has macroeconomic benefits, the most of important of which is to increase income.  And consumers in the lower range of income are far more likely to increase spending in proportion to an increase in their wages.  (BTW: this is Keynesian 101: it assumes the marginal propensity to consume among lower incomes is higher).  You can read the full study here.

     Now we have yet another study -- this time from the National Employment Law Project -- that finds the same thing.  The entire study is here.  But the following fact drives a stake through Mr. Shaw's argument:

     If Hot Air had any policy regarding retractions or corrections, they would print one.  Or, they would print their research that contradicts the above referenced papers.  But they won't do either because they have no ethics nor supporting research.  And while they have opinions, those opinions are clearly not supported by data.