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Half of Our Economists Distrust the Free Market

Written by Gary North on February 11, 2014

Mark Perry is a free market economist. He has a blog on the site of the American Enterprise Institute.

Recently, he cited a pair of editorials in the New York Times. They were on minimum wage laws. One was published in 1987. It called for a minimum wage law of 0. The other is recent. It calls for a law at $10 an hour.

He used this as an example of an increase in economic ignorance at the New York Times. I concur. But that is not a surprise. The following is a surprise.

I went to Wikipedia’s article on the minimum wage. Here is what I found.

According to a 1978 article in the American Economic Review, 90% of the economists surveyed agreed that the minimum wage increases unemployment among low-skilled workers. By 1992 the survey found 79% of economists in agreement with that statement and by 2000 the percentage was 45.6 in full agreement with the statement and 27.9% agreeing with provisos (73.5% total).The authors of the 2000 study also reweighted data from a 1990 sample to show that at that time 62.4% of academic economists agreed with the statement above, while 19.5% agreed with provisos and 17.5% disagreed. They state that the reduction on consensus on this question is “likely” due to the Card and Krueger research and subsequent debate.

A similar survey in 2006 by Robert Whaples polled PhD members of the American Economic Association. Whaples found that 46.8% respondents wanted the minimum wage eliminated, 37.7% supported an increase, 14.3% wanted it kept at the current level, and 1.3% wanted it decreased. . . .

In 2013, a diverse group of economics experts was surveyed on their view of the minimum wage’s impact on employment. 34% of respondents agreed with the statement, “Raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment.” 32% disagreed and the remaining respondents were uncertain or had no opinion on the question. 49% agreed with the statement, “The distortionary costs of raising the federal minimum wage to $9 per hour and indexing it to inflation are sufficiently small compared with the benefits to low-skilled workers who can find employment that this would be a desirable policy”, while 11% disagree.

Two decades ago, there was close to unanimity among American economists: minimum wage laws reduce employment. Today, there is no agreement. It’s about half and half.

I can think of no better evidence of the failure of the defenders of economic reasoning to persuade the public. They have not persuaded the economics profession.

(For the rest of my article, click the link.)

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6 thoughts on “Half of Our Economists Distrust the Free Market

  1. Phillip the Bruce says:

    My fatehr used to day (frequently), "When people's minds are made up, it is hard to confuse them with facts."

  2. I don't make minimum wage.

  3. I have said many times, if you present a problem to three economists you will get a minimum of four opinions. But I think that the change of opinion about the minimum wage can be traced back to the educational system. As college level schooling has gotten more liberal, economic opinion has followed. Certainly when I took my first economics course in the late 50s, Keynes was not the influence he is today. See my blog at http://cranky-conservative.blogspot.com

  4. What totally self-centered economist in his right mind is going to acknowledge the Austrian school if he expects earn a living in the national bureaucracy or the public school system?

  5. It is simple unemployment and inflation has risen every time the minimum wage is raised if you look at population growth and technological advances that disguise the impacts of it but do not eliminate it.

  6. Not "Our economists". Merely fascist-progressive social engineers trying to use central planning to oppress the populace.