The Wonkocracy Abandons Evidence: Dispassionate Analysis or Partisan Hackery?Posted: December 5, 2013
How A Progressive Regresses
Kevin Glass writes: Ever since President Obama endorsed a federal minimum wage hike in his State of the Union speech, progressives have lined up in lockstep support. Economists, bloggers, tv hosts all have come out saying that a minimum wage hike is clearly the right move. You’d be forgiven if you thought that it’s been a very short while since the very existence of a minimum wage was considered controversial.
In the late 1980s, the New York Times advocated for an abolition of the minimum wage. With 25 more years of research, much of it showing that the minimum wage is an inefficient distortion of labor markets, the New York Times reversed position and advocated for a minimum wage hike to historic highs.
Rising average productivity justifies rising average wages, or more accurately, rising total compensation including benefits. Wage growth hasn’t matched productivity growth, largely because health care costs are taking a bigger slice of the total compensation pie. But average compensation has more or less tracked productivity.
But the Times’ logic applies only to averages. There’s no reason to assume that the wage paid to the youngest, lowest-skilled workers in the labor force should necessarily rise with average productivity. The best guess is that it would rise with the productivity of the youngest, lowest-skilled workers in the labor force.
So what are the effects of increasing minimum wages? Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment. This theoretical prediction has, however, been hard to confirm with actual data. Indeed, much-cited studies by two well-regarded labor economists, David Card and Alan Krueger, find that where there have been more or less controlled experiments, for example when New Jersey raised minimum wages but Pennsylvania did not, the effects of the increase on employment have been negligible or even positive. Exactly what to make of this result is a source of great dispute. Card and Krueger offered some complex theoretical rationales, but most of their colleagues are unconvinced; the centrist view is probably that minimum wages “do,” in fact, reduce employment, but that the effects are small and swamped by other forces.
What is remarkable, however, is how this rather iffy result has been seized upon by some liberals as a rationale for making large minimum wage increases a core component of the liberal agenda–for arguing that living wages “can play an important role in reversing the 25-year decline in wages experienced by most working people in America” (as this book’s back cover has it). Clearly these advocates very much want to believe that the price of labor–unlike that of gasoline, or Manhattan apartments–can be set based on considerations of justice, not supply and demand, without unpleasant side effects. This will to believe is obvious in this book: The authors not only take the Card-Krueger results as gospel, but advance a number of other arguments that just do not hold up under examination.
This earlier version of Paul Krugman had the right idea, writing that what a large minimum wage hike “is really about is not living standards, or even economics, but morality.”
The New York Times’ view has changed. Paul Krugman’s view has changed. Jason Briggeman of George Mason University took a dive into why these elite progressives have changed their opinions on the minimum wage. None of the possible reasons speaks well to the elite progressives’ thinking.
The Initiative on Global Markets, run by the University of Chicago, surveys the opinions of a select group of elite economists on a number of policy issues. In February of this year, they conducted a survey on the minimum wage and found that over half of economists supported a minimum wage hike, with only 11% opposed. This, Briggeman found, flew in the face of other attempts to survey the opinions of the economics profession. There have been three comprehensive surveys conducted in the last ten years that found large numbers of economists – sometimes a plurality, in fact – either opposed to minimum wage hikes or opposed to minimum wage laws entirely. The IGM survey was a sharp outlier to previous studies.
Most damning, Briggeman finds, is that “there may be little relationship between one’s professional achievement as an economics professor and one’s views on the minimum wage.
“There could be a whole host of reasons for this. Briggeman proposes six hypotheses, from survey design to sample size to genuine change of heart. Indeed, the design of the IGM survey would not hold up in a high school statistics class. The sample size is merely 40, the sample is hand-picked rather than random, and it could not be construed as any kind of “consensus” in any meaningful sense. All it is representative of is the opinion of the IGM decision makers of who counts as a “top economist” – and which of those are actually willing to be included. Some of them, like Austan Goolsbee, have been in the employ of \of the White House – not exactly a resume that screams impartiality. Still, there are some big names on the IGM list, and we can certainly say that it encompasses some of economics’ leading lights.
Briggeman finds that much of the evidence cited by progressives in favor of minimum wage hikes is old enough to have been able to influence economists in earlier surveys. So what gives?
The biggest public policy development in the last five years is President Obama’s decision to place a minimum wage hike front and center in his 2013 State of the Union speech. The IGM survey that Briggeman discusses was conducted in February of 2013, potentially triggered by the President forcing the issue into the public consciousness.
Maybe there has been a behind-the-scenes dialogue in the economics profession that the public is not privy to that caused a sea change that took place sometime before 2013 and culminated with a fairly substantial consensus in favor of a minimum wage hike. Or maybe professional economists who double up as “public intellectuals” are deeply intertwined with the infrastructure of the Democratic Party and can’t afford to publicly go against the leader of the Democratic Party in a public survey that receives a fair amount of media coverage.
Leading blogging progressives like Paul Krugman, Mark Thoma, Brad DeLong, Jonathan Chait, and Steve Benen had a brief dalliance with the phrase “the wonk gap” earlier this year, referring to the idea that there’s simply an overwhelmingly large number of folks who identify as left-wing who are “dedicated to study, empirical analysis, and informed debate. They argue mostly through evidence-based reasoning… but they’re uncomfortable with abject partisanship.”
The idea of “the wonk gap” is little more than arelabeling of what was “the reality-based community” in the early-’00s. Progressives comfort themselves with backpatting about how there are just so many more smart people on the left who care about data and empiricism, and that the perceived imbalance in this area is itself evidence of the correctness of progressivism.
If we define “wonk” as a title conferred by graduate degrees, government bureaucracy employment, or university tenure, then let’s give them this: there are more “wonks” on the left than on the right. These types of specialized knowledge are not the only knowledge worth having, however, and there are of course many policies throughout history advocated by a consensus of wonks that have turned out disastrously. It would also be strange, given America’s two-party system and individual value systems, if both ideological sides were equally hospitable to the type of wonkocracy that these progressives advocate.
The perception of the “wonk gap” has caused people like Paul Krugman to actually turn away from “study, empirical analysis, and informed debate.” The intertwining of the left-wing intelligentsia with the Democratic Party has compromised the ability of many of these writers to actually think critically and accept that their opposition is also motivated by a genuine desire to do good and backed up with empirical evidence. Krugman himself attests that he doesn’t read anything by anyone associated with conservatism.
The result of this bandwagon-circling around the inherent rightness of progressivism is a rejection of the traits that they’ve associated with “being a wonk.” The minimum wage debate is an illustrative example. In the past, it’s been acknowledged that both economic theory and evidence suggested that the minimum wage creates unemployment and that the contrarian literature was, at best, tenuous. But when the leader of the Democratic Party takes a side on an issue that the wonks may feel conflicted about, they tend to fall in line. When the progressive wonkocracy is a key leg of the Democratic Party, though, they’ll discard dispassionate analysis for partisan hackery.
- Raising the Minimum Wage is Not Win-Win (priceofliberty.tumblr.com)
- The Truth on the Minimum Wage Part II! (thetruthpolice.wordpress.com)
- White Castle VP James Richardson: “$15 Minimum Wage Means Layoffs” (freedomoutpost.com)
- ho-hum, another Obam lie-this time about minimum wage. (debatepolitics.com)
- Brace yourself…obama says minimum wage increase will create jobs (smallgovernmentnow.wordpress.com)
- The Minimum Wage Was Once A Tool To Drive Undesirable “Parasite” Workers Out Of The Labor Markets (sayanythingblog.com)
- Obama’s Pinnochio Test on His Minimum-Wage Statement (nationalreview.com)