Despite abundant empirical evidence that raising the minimum wage doesn’t lead to job loss, the idea that it does is an article of faith among right-wing economists, and all too often the media report their theological musings as fact. The latest example of such folly popped up in an article in the March 22 Financial Times, a paper that usually knows better than to publish this bushwah.
Here’s how the piece, headlined “Battle in Seattle to find employment,” began:
In Seattle, the city’s unemployment rate remains steady, at a little over 3 percent even though a rising minimum wage may have driven out low-paying jobs.
“We think the immigrant workers are heading to lower-cost regions of the country,” says Jacob Vigdor, an economist at Washington University. [sic—Washington University is in St. Louis. Vigdor is an economist at the University of Washington, in Seattle.] “Natives of the Seattle area have also started to give up, deciding they can have a better standard of living if they relocate elsewhere.”
Thus ends the article’s discussion of Seattle’s woes. The only actual empirical data that appear in the piece, please note, show that the unemployment rate there is 3 percent, which most economists, as well as people themselves, view as full employment. The story line, however, is that undocumented job loss is causing an undocumented flight from the city. In place of documentation, we have the opinions of Professor Vigdor, who is a fellow at the right-wing Manhattan Institute, where it is a truth universally acknowledged that a raise in the minimum wage must lead to job loss, all data showing otherwise—like, say, a 3 percent unemployment rate—to the contrary notwithstanding. The FT’s mistake is that Vigdor’s biases are reported as kinda-sorta fact, while the one actual fact in the piece, the 3 percent unemployment rate, gets a glancing notice at best.
The article’s author might have taken time to consider a survey from the St. Louis Federal Reserve, which documented a rise in employment in the Seattle restaurant sector even after the wage was raised, and a survey by University of Washington academics, including some of Vigdor’s colleagues, that also documented an increase in low- as well as high-wage jobs in Seattle in the year following the minimum-wage hike.
The FT is normally sharper than this. Sadly, in this instance, it reverts to the norm of most economic reporting, in which the gospel of trickle-down is so internalized that the opinions of right-wing academics are given more weight than empirically verified fact. Come on, FT—you can do better.