US News Promotes "Deeply Flawed" Analysis To Claim Minimum Wage Increases Could Hurt Low-Wage Workers
Dozens Of Studies Have Shown A Negligible Relationship Between Minimum Wage Increases And Employment
Blog ››› ››› CRAIG HARRINGTON
U.S. News & World Report published a lengthy interview with an economist whose research purports to show a link between minimum wage increases and job losses as part of a feature intended to answer whether "a higher minimum wage [would] help or hurt workers." The economist the magazine solely relied on for its investigation of the minimum wage has been criticized for producing "deeply flawed" research in the past that goes against the overwhelming preponderance of economic research around the minimum wage.
Just days prior to the publication of the interview, the Los Angeles Times reported on a tentative deal between California lawmakers and minimum wage advocates that would raise the state's minimum wage to $15 per hour in 2022.
On March 28, U.S. News published excerpts from an interview between reporter Andrew Soergel and economics professor Jeff Clemens in which the two attempted to shed light on the fraught partisan argument over the merits of local, state, and federal efforts to raise the minimum wage -- which currently stands at just $7.25 per hour at the federal level. Unfortunately for readers, what was actually presented was a one-sided conversation pushing myths commonly parroted by right-wing media, which blame minimum wage increases for job losses, teenage unemployment, service automation, and economic stagnation. From U.S. News (emphasis added):
So which side is right? That depends almost entirely on the perception of the problem with the domestic labor market, says Jeff Clemens, an assistant professor of economics at the University of California, San Diego and a faculty research fellow at the National Bureau of Economic Research.
If you believe employers are squeezing more and more output from their payrolls without fair compensation, then a minimum wage hike would be for you. But if you believe technological advances and low-skill, low-wage competition from overseas have limited the number of minimum wage jobs in the U.S. and prevented employers from doling out raises, then a minimum wage bump might not make sense and could ultimately hurt low-skill workers' employment opportunities.
Clemens' own research suggests the series of minimum wage hikes enacted in the mid-2000s contributed substantially to the number of low-skill jobs lost during and around the Great Recession. But he says there are compelling bodies of evidence on both sides of the spectrum.
Soergel promoted the interview with a misleading tweet claiming "a lot of research suggests" that raising the minimum wage to $15 per hour "could hurt employment":
With Calif. closing in on $15 min wage, worth noting a lot of research suggests such a move could hurt employment https://t.co/jvLJaYosGz
-- Andrew Soergel (@ASoergel) March 28, 2016
Contrary to Soergel's claim, there is actually very little available research on $15 minimum wage rates, because those wage levels have never before been enacted in the United States. The Fight for $15 movement has successfully pushed some companies in some municipalities to voluntarily lift wages for workers, but $15 wages are not in place yet. On May 1, 2014, the mayor and city council in Seattle, Washington, made history by announcing plans to raise the municipal minimum wage to $15, but that wage level will be phased-in for different employers over the course of three to seven years.
A 2015 study that does purport to show massive job losses resulting from a $15 minimum wage was issued by the conservative Empire Center for Public Policy. The study, which Media Matters debunked, was criticized by the National Employment Law Project (NELP) and Fiscal Policy Institute (FPI) for using "outdated economics" and for relying on "less sophisticated and less accurate research." One of the studies the Empire Center relied on for its misleading analysis was co-authored by Clemens, and was harshly criticized by labor economist Irv Lefberg as "deeply flawed" and "pure scientific folly" because it attempted to attribute employment changes in the midst of the Great Recession to "a small, gradual increase" of the minimum wage "affecting a small portion of the workforce."
Clemens is a qualified economist, but his position on the minimum wage is hardly indicative of the economics profession as a whole. For example, an April 2012 report by the University of California, Berkeley's Institute for Research on Labor and Employment (IRLE) found that the change in "employment stock" -- the number of available jobs -- resulting from increased minimum wages is "indistinguishable from zero." In February 2013, economist John Schmitt of the Center for Economic and Policy Research (CEPR) reviewed the findings of dozens of individual studies and meta-analyses of the minimum wage, and concluded that it "has little or no discernible effect on the employment prospects of low-wage workers." One of the meta-studies in CEPR's review was a 2009 peer-reviewed paper by economists Hristos Doucouliagos and T.D. Stanley, which plotted the estimated jobs impact of 1,492 separate calculations contained in 64 distinct studies. The paper found that the overwhelming majority of the "most precise estimates" of positive and negative jobs impacts were "clustered at or near zero":
There is an enormous amount of research demonstrating that the minimum wage has little effect on the job market -- a December 2015 study by researchers at Cornell University argued that with so little evidence to make a case against raising the minimum wage, opponents ought to just "support rather than oppose reasonable increases." There is also additional research demonstrating the positive side-effects of increased wages, including reducing the impact of poverty on low-wage workers. A January 5, 2016, briefing paper from the Economic Policy Institute (EPI) concluded that a phased-in wage increase to $15 per hour in 2021 would boost wages "directly or indirectly" for 3.2 million workers in New York alone. A July 14, 2015, EPI briefing paper found that raising the federal minimum wage to just $12 per hour in 2020 would lift wages for 35 million American workers. An October 2013 study by economists at the University of California, Berkeley and the University of Illinois, Urbana-Champaign found that low wages in the fast food industry alone cost taxpayers "nearly $7 billion per year" in increased spending on anti-poverty programs. An April 2015 study by the UC-Berkeley Labor Center found that low wages cost taxpayers nearly $153 billion annually nationwide.
Media Matters has debunked the right-wing media myth that raising the minimum wage will result in job losses for low-wage workers dozens of times. Nevertheless, the same discredited arguments continue emerging every time the minimum wage is in the news. It would not be surprising to see right-wing outlets turn to Clemens, and only Clemens, for an in-depth feature assailing the minimum wage, but U.S. News' decision to do so is perplexing.