Mark Perry of the American Enterprise Institute (AEI) posted an interesting image that compares Paul Krugman’s comments on the minimum wage in 1998 compared to 2005. In 1998, Krugman illustrated his economic understanding of how a higher minimum wage leads to reduced employment. In 2005, he does a complete 180 and says there is no evidence to suggest a higher minimum wage leads to reduced employment.
Talk about intellectual inconsistency from a Nobel laureate for economic geography. For all of the liberals and Keynesians who love to cite Krugman, will they quote him on this? Probably not. Another question: will Krugman actually clarify his comments from the 1990s? Probably not.
As anyone with a minimal understanding of economics can attest to: there are numerous consequences (intended or unintended) of a minimum wage. It leads to higher unemployment; it prices the unskilled, uneducated, immigrants and youth out of the labor market; it enhances job qualifications by employers; it leads to higher prices; it allows the corporations to absorb the cost while the smaller businesses shut down; and it allows unions to keep competitors out of the market.
It’s a terrible thing when economics becomes politicized, whether it’s the Republicans or Democrats, liberals or conservatives.
Will Krugman call out his own “derp” now?
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