It is not true that the data on the minimum wage “conforms so strongly to basic economic intuition”

In the mid-1980s, I handed out flyers on an Upper East Side streetcorner for a now defunct drugstore chain for $4.25 per hour ($9.07 in 2012). During the summers, I cut fiberglass and installed ducts in Miami for $5 an hour ($10.70 today). The minimum wage at the time was $3.35. A bump in the minimum was not likely to affect my employment prospects.

But that’s anecdote! Kevin Erdmann (via Marginal Revolution) has proof!

Uh ... um. Hmm. OK, take a look at the inflection points. Something happened in 1957. And something happened in 1973. And I vaguely recall something important in 1990. Not to mention 2007.

I wonder what I’m thinking about? (Click the link, please.)

And it seems a little counter to the hypothesis that in his second two examples teen employment accelerates above his post-hike trend well before his two-year post-hike window closes. And then there is 1996.

So ... four of his seven two-year post-hike windows are coterminous with recessions. (Perhaps minimum wage hikes cause recessions?) And two (1961 and 1996) don’t say what he thinks they say. That leaves 1967. I guess. Maybe.

Aaargh!

But Erdmann earned a lot of goodwill from me in his About the Author page. And he seems to have walked back his conclusions. I am impressed! Not a lot of people do that.

But why then did Tyler Cowen link to him after he had already walked himself back? I honestly do not understand.

Comments

[Kevin Erdmann]

Thanks for the comments. I have followed up here:

http://idiosyncraticwhisk.blogspot.com/2014/01/total-and-teen-employment-minimum-wage.html

[Robert Boxer]

I recently wrote an article about how an increase in the minimum wage rate increases unemployment. You can read it here: http://wp.me/p3N9zD-4e

[Michael Tontchev]

Perhaps I'm looking at the wrong dates, but it seems that MR linked to the post on the 21st, while the update was issued on the 22nd.

Of course, I have no intention of defending the very sloppy empiricism in the original post.