Friday, July 24, 2015

Annals of derp: Dysarithmia?

Welcome No More Mister Nice Readers!

Yakov Protazanov, Aelita, Queen of Mars, 1924. Image via Little Plastic Things.
It's world-famous economics wonk David Brooks out to defeat that silly old Nobelist Paul Krugman, who was explaining last week how economists no longer believe minimum wage rises cause significant job losses. Not at all, says Brooks (not naming Krugman, as New York Times rules require):
Some of my Democratic friends are arguing that forcing businesses to raise their minimum wage will not only help low-wage workers; it will actually boost profits, because companies will better retain workers. Some economists have reported that there is no longer any evidence that raising wages will cost jobs. Unfortunately, that last claim is inaccurate. There are in fact many studies on each side of the issue.
Well, hm. I'll be updating this in the course of the day eventually, but there's one thing I want to get out right away, in the hope of scooping all my friendly rival Brooksologists, on some of the most illiterate-or-false assertions I've ever seen him make:
The most objective and broadest bits of evidence provoke ambivalence. One survey of economists by the University of Chicago found that 59 percent believed that a rise to $9 an hour would make it “noticeably harder” for poor people to find work. But a slight majority also thought the hike would be worthwhile for those in jobs.
Not for "poor people":

Question A: 
Raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment.

It's an important difference, because the remedy for low-skilled workers is different from the remedy for poverty (the argument against minimum wage hikes is that it's a lousy anti-poverty program, so the result the way Brooks phrases it would be an argumentum ad ironiam, "anti-poverty program hurts poor"). It's education and training, making them easier to get, beefing up community colleges as opposed to the for-profit mills whose chief object is to suck up federal loan money.

But in any case his reading of the data is, to put it politely, not reading. I have no idea where he got 59% from, but it's not in the charts from the Chicago Initiative on Global Markets study:

That would be 34%, to 32% who disagree. The two-thirds of economists who believe there's an answer are about equally divided. To get to 58% on the pessimist side, let alone 59%, you would have to include those who are uncertain what effect it would have. That's really not allowed, for reasons I don't think I have to explain.

And for the question as to whether the hike would be worthwhile regardless the "slight majority" was 47% agree or strongly agree to 11% disagree or strongly disagree:

Question B: 
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.

It's not (quite) a majority, but it's the opposite of slight (looks like this time he's counting the uncertain on the "disagree" side). An overwhelming majority of economists who are willing to take a position agree that the minimum wage hike is desirable.

So every word in this paragraph is essentially a lie. Or when he looks at a number he has some bizarre cognitive difficulty processing it. What's wrong with him? Could you call it dysarithmia?

Piece continues here.

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