I completely stand by the minimum wage one, this was the standard model of how labour markets worked until like the shapiro-Stiglitz model (I think) and is still the standard model for how input markets work, and if you’re writing a general equilibrium model you’ll probably still have wage = marginal product of labour.
This comment does not sound like ‘completely standing by’ to me! If a $15/hour US minimum wage, which is the relevant current policy proposal, reduces employment, that means the intuition is correct.
I think the IGM poll is weak evidence for you here. Lets look at some quotes from the guys who didn’t agree that increasing the minimum wage would substantially increase unemployment (e.g. ostensibly disagreed with the intuition):
Evidence is that it would be lower by perhaps 1 − 2 %. Lots of margins for adjustments.
Lower, probably; substantially lower, not clear at all.
Empirical studies disagree on the sign of the effect. Few of those concluding in favor of negative are consistent with “substantially.”
I don’t think the evidence supports the bold prediction that employment will be substantially lower. Not impossible, but no strong evidence.
Empirical evidence suggests the effects on employment would be modest.
Lower, yes. “Substantially”? Not clear. For small changes in min wage, there are small changes in employment. But this is a big change.
In many cases, these people either 1) believe there would be unemployment, but are getting hung up on ‘substantial’, or 2) think there will be other adjustments (e.g. reduction in non-wage benefits). I think the headline result here is somewhat misleading—at that is before any adjustment for the partisan bias issue. If my intuition was that increasing the minimum wae would increase unemployment, and the people who ostensibly disagree with me think it would only cause 780,000[1] people to lose their jobs, I would consider myself vindicated.
I haven’t read that 2019 Dube review, though I’m guessing it’s similar to the other 2019 Dube review I posted. But as I noted in the grandparent, there is serious work on the other side since (e.g. the two 2021 papers).
This discussion seems a bit of a side-track to your main point. These are just examples to illustrate that intuition is often wrong—you’re not focused on the minimum wage per se. Potentially it could have been better if you had chosen more uncontroversial examples to avoid these kinds of discussions.
Maybe, I meant to pick examples where I thought the consensus of economists was clear (in my mind it’s very clearly the consensus that having a low minimum wage has no employment effects.)
If you want to make a point about science, or rationality, then my advice is to not choose a domain from contemporary politics if you can possibly avoid it. If your point is inherently about politics, then talk about Louis XVI during the French Revolution. Politics is an important domain to which we should individually apply our rationality—but it’s a terrible domain in which to learn rationality, or discuss rationality, unless all the discussants are already rational.
I completely stand by the minimum wage one, this was the standard model of how labour markets worked until like the shapiro-Stiglitz model (I think) and is still the standard model for how input markets work, and if you’re writing a general equilibrium model you’ll probably still have wage = marginal product of labour.
Meta-analysis find that minimum wage doesn’t increase unemployment until about 60% of median wage https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/844350/impacts_of_minimum_wages_review_of_the_international_evidence_Arindrajit_Dube_web.pdf, and most economists don’t agree that a even a $15 an hour minium wage would lead to substantial unemployment (although many are uncertain) https://www.igmchicago.org/surveys/15-minimum-wage/
This comment does not sound like ‘completely standing by’ to me! If a $15/hour US minimum wage, which is the relevant current policy proposal, reduces employment, that means the intuition is correct.
I think the IGM poll is weak evidence for you here. Lets look at some quotes from the guys who didn’t agree that increasing the minimum wage would substantially increase unemployment (e.g. ostensibly disagreed with the intuition):
In many cases, these people either 1) believe there would be unemployment, but are getting hung up on ‘substantial’, or 2) think there will be other adjustments (e.g. reduction in non-wage benefits). I think the headline result here is somewhat misleading—at that is before any adjustment for the partisan bias issue. If my intuition was that increasing the minimum wae would increase unemployment, and the people who ostensibly disagree with me think it would only cause 780,000[1] people to lose their jobs, I would consider myself vindicated.
I haven’t read that 2019 Dube review, though I’m guessing it’s similar to the other 2019 Dube review I posted. But as I noted in the grandparent, there is serious work on the other side since (e.g. the two 2021 papers).
52m people on under $15/hour according to Oxfam * 1.5% according to Nordhaus, who voted ‘disagree’
This discussion seems a bit of a side-track to your main point. These are just examples to illustrate that intuition is often wrong—you’re not focused on the minimum wage per se. Potentially it could have been better if you had chosen more uncontroversial examples to avoid these kinds of discussions.
Maybe, I meant to pick examples where I thought the consensus of economists was clear (in my mind it’s very clearly the consensus that having a low minimum wage has no employment effects.)
Fwiw I think this is good advice.