It’s that time of year again. No, not for a holiday singalong – I mean it’s time for opponents of Washington’s best-in-the-nation minimum wage to dust the cobwebs off their pro forma “minimum-wage-job-killer-blah-blah-blah” arguments, gin up a few facts sheets, and pen an op-ed or two. After all, that’s what happens most every year there’s an increase.
Remember last year, when Washington’s corporate business lobbyists – along with Attorney General Rob McKenna – failed(opens in new tab) in their “throw mud at the wall and see what sticks” approach? Their end-run around the extremely popular voter-approved minimum wage initiative(opens in new tab) went down in flames, but it hasn’t deterred their ideological march toward eliminating the minimum wage altogether.
Take the Washington Policy Center (WPC), a research organization focused on “free market solutions,” which attempts to tie teen unemployment to a higher minimum wage in this post(opens in new tab):
If you are forced to pay at least $8.55 per hour to someone with work experience or someone without experience, you most likely will hire the person with experience. This hurts the teen because they are shut out of the labor market because employers deem that the minimum wage is too high a price to pay for someone with no experience.
Read closely and you’ll see the WPC is undone by their own reasoning: teen unemployment is high not because of the minimum wage, but because high general unemployment has created a surplus of labor, so experienced workers fill entry-level jobs typically taken by teens.
The Evergreen Freedom Foundation (EFF), a libertarian group, makes a similar claim(opens in new tab) that young workers “find themselves in the crosshairs again” due to the voter-approved increase. It’s distasteful analogy at best. But when telling a tall tale, it’s best to not let facts get in the way.
That may be why both the Evergreen Freedom Foundation and Washington Policy Center both cite the Employment Policies Institute(opens in new tab) in their posts, which despite the seemingly innocuous name, is actually a front group for corporate interests set up by D.C. lobbyist Rick Berman(opens in new tab).
Berman is the executive director of at least 23 other industry-funded front groups(opens in new tab) like the Employment Policies Institute, which function as mouthpieces for big business, but operate under the veil of nonprofit “research” organizations. Their well-timed press releases are often picked up by news outlets(opens in new tab) seeking to “balance” the findings of well-established research.
Of course, most mainstream economists – and many responsible business owners(opens in new tab) – have a different point of view, which you can find in peer-reviewed economics journals from MIT(opens in new tab), UMass(opens in new tab) and UC Berkeley(opens in new tab): high teen unemployment is due to more competition from older workers – not a higher minimum wage. Their findings have also been confirmed by the U.S. Bureau of Labor Statistics(opens in new tab).
The Employment Policies Institute’s reports – and others like it(opens in new tab) – have come under fire for using poor research methods that result in inaccurate data and spurious findings.The most recent critique came from a University of California report(opens in new tab):
[T]he estimates are often biased and not robust to the source of identifying variation. Including controls for long-term growth differences among states and for heterogeneous economic shocks renders the employment and hours elasticities indistinguishable from zero and rules out any but very small disemployment effects.
Translation: When researchers control for economic shocks and long-run job growth differences in the data, the negative effects claimed by these reports disappear(opens in new tab). Oops. Berman and the Employment Policies Institute can order up press coverage, and the WPC and EFF can cite it, but they still can’t buy good data.
In 1998, voters overwhelmingly voted to index Washington’s minimum wage to inflation, largely because they were tired of the Rick Bermans of the world predicting economic doom with every increase in the minimum wage.
You can’t have an honest debate about the minimum wage with dishonest data. But that probably won’t stop the WPC and EFF from trying.