2013.12.01 Krugman disagrees with himself on minimum wage

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Krugman wrote in 1998 review of a book on living wage, "Any Econ 101 student can tell you... the higher wage... leads to unemployment". The 2008 economics textbook he co-authored said the same thing. He trashed the Card and Kruger study/book[1] that implied unemployment didn't always rise with minimum wage. Yet when writing for the NYT, Krugman champions the living wage that he mocked his whole career. Then a year later, slips that France's high unemployment is likely because of their high minimum wage. [2]

500 economists, including 3 nobel laureates (Vernon Smith, Edward Prescott and Eugene Fama) wrote an open letter on what a bad idea raising the minimum wage is, which disagreed with Paul's article. Who are you going to believe? Old him and all of them, or new him? [3]

❝ So what are the effects of increasing minimum wages? Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment. ❞

❝ What is remarkable...is how this [Card and Kruger’s] rather iffy result has been seized upon by some liberals as a rationale for making large minimum wage increases a core component of the liberal agenda.... Clearly these advocates very much want to believe that the price of labor—unlike that of gasoline, or Manhattan apartments—can be set based on considerations of justice, not supply and demand, without unpleasant side effects. ❞

I don't know if he was lying then, or is lying now, but he has to be lying on one of them -- or there was some magic epiphany that's never been explained for this complete change of heart. But it seems to flip-flop depending on whether a Democrat or Republican is advocating for it. If the NYT had a fact checker, they would not let such work get published, or demand he explain his flip of positions.


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