Minimum Wage Experts
July 27, 2015 at 11:15 am
Smartertimes reader-participant-watchdog-community-member-content-co-creator Colin writes:
Not sure if you saw today's NYT piece on the minimum wage but it's a real piece of work. The only three experts quoted in the article on this contentious topic are Jared Bernstein, someone from the left-wing Economic Policy Institute and the national director of the lefty Working Families Party. The ideologies of both the EPI and WFP are unmentioned, while the WFP official is allowed to use his quote in the story's conclusion to editorialize rather than provide any analysis about the economic impact of a minimum wage hike. The only skeptic of minimum wage hikes even named in the piece is David Neumark, who is seemingly only mentioned to introduce the concept on an increase in the earned income tax credit.
One can't help but wonder whether journalist Noam Scheiber doesn't know any right-of-center economists worth quoting on the topic or simply doesn't find their views relevant or worthwhile. Neither explanation is reassuring.
Furthermore, the only two business people quoted in the piece are a guy who already pays his workers above minimum wage and is thus largely unaffected and someone who owned a Subway franchise until selling it a couple of months ago. Quotes from the former franchise owner, meanwhile, appear to confuse the issue:
Wanda Austin-Peters, who owned a Subway franchise in Albany for 10 years until she sold it in May, said labor normally accounted for 50 percent or more of her costs in a given year — relatively high compared with an industry average of around one-third. She added that she had little ability to raise prices.
"It would be stupid to charge $7 for a footlong sandwich that everyone else has for $5," Ms. Austin-Peters said. "There's a Subway cropping up in every corner."
The typical reader may be forgiven for thinking that this means a wage increase will not result in higher prices due to competition, but it's difficult to see this dynamic holding when all of her competitors suddenly see their wage costs double (assuming staff and hours worked are not reduced). The relevance of her statement in the context of a massive minimum wage increase is at best unclear.
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