Is It Time to Start Dismissing 'Economics Deniers'?
Minimum wage laws have negative effects whether or not their advocates acknowledge them.
We're all the same person, a wise fellow once said—just on different days. He didn't know the half of it. For years, environmentalists have blasted "climate science deniers" for refusing to accept the evidence for human-caused global warming. Is it time we started talking about economic-science deniers, too?
The case for anthropogenic (i.e, human-induced) global warming, or AGW, is very strong. Decades of peer-reviewed research on the question has been done, and it all seems to point in one direction. Even former doubters have been convinced on the point: See for instance physicist Richard Muller's 2012 essay, "The Conversion of a Climate Change Skeptic." He and a team of scientists tried vigorously to find credible alternative explanations for the observed increase in global temperatures, and couldn't. "I still find that much, if not most, of what is attributed to climate change is speculative, exaggerated or just plain wrong," he concluded—but on the fundamental point, he agrees: "Humans are almost entirely the cause."
Muller is not unique; other skeptics gradually have come around, too. On the other hand, the reverse has not happened. Firm believers in AGW are not deciding, after careful study, that it's really just a hoax after all. And that should tell you something—because climate-change skeptics have challenged the consensus view loudly and aggressively. If they had been able to falsify the AGW hypothesis, as scientists have proven false various claims about cold fusion experiments, then at least some climate scientists would have admitted as much.
Note that climate-change skeptics blithely accept bizarre but apparently true scientific claims regarding quantum indeterminacy and the curvature of space. Yet they truculently refuse to concede a point about the Earth's climate that is, intuitively, far less difficult to swallow. They will not believe the peer-reviewed research of hundreds of scientists on climate—but they will gladly believe something they read on a blog somewhere insisting the research is all wrong.
Because they don't like the political implications, climate-change doubters become hyper-skeptical victims of confirmation bias: No amount of evidence is ever enough to mollify their doubts. There is always something wrong with the data sets, or the climate models, or—hey, look at this ridiculous quote from Al Gore 20 years ago! He was wrong then, ergo everyone else must be wrong now, right? Q.E.D.
So what does all this have to with economics?
In late June, researchers published a careful and data-rich study on Seattle's minimum-wage law. It found that the city's graduated hike in the minimum wage is costing thousands of jobs and cutting the number of hours worked by people in low-pay jobs. In the aggregate, Seattle workers are losing millions of dollars in wages thanks to the law. The study has drawn praise for its analytical rigor; one economist at MIT called it "sufficiently compelling in its design and statistical power that it can change minds."
Or not.
Since its publication, liberals have given the study hyper-skeptical treatment, claiming to find all sorts of shortcomings with its methodology, data set, and so on. They point to a different study, from the University of California at Berkeley, which examined the law's effects on the restaurant industry and found no statistically measurable effect.
Even Seattle's political leaders are piling on, although they commissioned the research in the first place.
The idea that the price of something has no effect on demand for it sounds pretty funny, coming from liberals. After all, progressives generally support raising taxes on cigarettes to discourage people from smoking. Last November several cities joined the growing list of liberal demesnes that have imposed soda taxes—Berkeley, Philadelphia, San Francisco, etc.—to discourage consumption of sugary drinks. Heck, some localities even have firearms and ammunition taxes. One of them, in fact, is Seattle—where gun sales have dropped as a result.
The cognitive dissonance can be head-spinning. On Sunday, The New York Times ran an editorial dismissing the study on Seattle's minimum wage. This was the same editorial board that exulted, "A big tax on sugary drinks in Mexico appears to be driving down sales of soda" a couple of years ago. On Monday, the paper's David Leonhardt praised Seattle's tax on sugary soft drinks, asserting that such taxes "work as intended … people in those places are … drinking less soda."
Yet supporters of the minimum wage insist wages are somehow different. They point to research purporting to show that small wage hikes have no effect on employment. That might be true—just as small hikes in cigarette taxes don't change the behavior of smokers, and small releases of carbon dioxide into the atmosphere don't affect planetary climate. Different goods and services have different price elasticities, just as different greenhouse gases have different radiative forcing effects. But it does not follow that just because a small increase has no effect, a big increase will have none, either.
Yet when it comes to wages, liberals want to suspend the iron laws of economics—or at least pretend they don't apply, despite mountains of evidence to the contrary.
They don't reject all economic science, any more than conservatives deny all physical science. But, as conservatives do regarding climate change, on the minimum wage liberals suffer from an affliction once described by Solzhenitsyn: "the desire not to know."
This column originally appeared in the Richmond Times-Dispatch.
