Economists generally agree that minimum wage laws tend to put low-skilled workers out of work. (Even economists who support minimum wage laws for reasons of politics or “justice” don’t really argue that the laws don’t raise unemployment.) But that message hasn’t really reached journalists. Today’s stories on the mandated rise in the minimum wage take one of two forms: Assuming that the raise is “good news” for low-paid workers, or quoting one economist on each side. The latter is certainly better, but it does convey the sense that “economists disagree about the effects of minimum wage laws,” which doesn’t really reflect the state of economic knowledge.
NPR used both versions. Some of its hourly newscasts led with “The minimum wage hike means 70 cents more per hour for low-income workers.” But some also noted, “That’s supposed to be good news for low-income workers, but economists disagree about whether it will help or hurt the economy.” NPR did a somewhat balanced story yesterday.
Many journalists went with the easy, mostly wrong, “good news” approach, as these headlines and first sentences illustrate:
- ABC News: Relief for Workers at Bottom: Minimum Wage Goes Up
- Time: With the U.S. trillions of dollars in the hole, 70 cents an hour sounds like chump change. But it’s a big boost for the millions of workers who earn that much extra as of July 24.
- Philadelphia Inquirer: Minimum-wage workers to get a pay bump today
- WFMY (Greensboro, NC): Starting today, minimum wage workers will see extra cash in their pay checks.
- News on 6 (Tulsa): Thousands of Oklahoma workers will receive a pay raise on Friday when a new federal minimum wage takes effect.
But some did at least acknowledge the controversy:
- AP: Minimum wage hike could threaten low earners’ jobs
- USA Today: The third minimum wage increase in three years, effective Friday, is a moneymaker and a money-taker: Millions of workers soon will see pumped-up paychecks, while many already-struggling businesses face the burden of increased payroll costs.
- CNN: Minimum wage hike: More money or fewer jobs?/On Friday the federal minimum wage jumps to $7.25 an hour from $6.55. Economists differ as to whether that will hurt or help low-income workers.
- Kansas City Star: The federal minimum wage rises today from $6.55 to $7.25 an hour, bringing with it controversy about whether the increase is good or bad for the economy.
The New York Times gets the prize for its stark decline in economic understanding. Its editorial today begins, in a triumph of hope over economic reasoning:
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