Minimum Wage: Witnessing an Experiment in Bad Economics
“We know it will improve lives. We know it will bring folks into the middle class. We know it will bring more money into the local economy.”
— LA Councilman Mike Bonin
I’m teaching “Modern Political Economy” this month at Chapman University, where I am a Presidential Fellow. Chapman is a leader in experimental economics. Vernon Smith, the Nobel Prize economist, has an entire building here devoted to the subject.
We’re getting a natural experiment in the minimum wage legislation here in Los Angeles, where the City Council soon is prepared to push through the highest minimum wage law in America — $15.37 an hour for the city’s hotel workers, almost double the California minimum of $8 an hour.
It seems that every local government is straining to see which one can outdo the other in raising the minimum wage, which is an artificial way to intervene in labor markets.
Read more about the consequences of raising the minimum wage at Eagle Daily Investor.