http://economistletter.com/
By Peter Coy

There's something about Nobel laurels that gives an economist instant credibility, which is why organizations for and against the higher minimum wage have worked so hard to court them.

In January, seven Nobelists signed a letter favoring a $10.10 federal wage floor. On Thursday, three other Nobel prize-winning economists' names appeared on a letter warning that the increase proposed by Barack Obama would hurt employment and saying "we need a mix of solutions that encourage employment, business creation, and boost earnings rather than across-the-board mandates that raise the cost of labor."

The Nobelists on the "anti" letter are Eugene Fama of the University of Chicago Booth School of Business; Edward Prescott of Arizona State University; and Vernon Smith of Chapman University's Argyros School of Business and Economics and Fowler School of Law.
Other luminaries among the 500-plus signatories are Gregory Mankiw of Harvard University and Glenn Hubbard, dean of Columbia Business School, both former economic advisers to President George W. Bush; and George Shultz, a former secretary of Treasury, State and Labor.

Whatever its economic merits, the anti-$10.10 letter may suffer politically from its failure to propose a clear alternative. It simply says, "we encourage federal policymakers to examine creative, comprehensive policy solutions that truly help address poverty, boost incomes from work, and increase upward mobility by fostering growth in our nation's economy."

Also vague is the organizer of the letter. The pro-$10.10 letter was put together by the Economic Policy Institute, which is openly liberal and receives some of its funding from labor unions. In contrast, the press release for the anti-$10.10 letter mentions no sponsor.


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Tao Channel

I wonder why the ten cents is added. I remember when the minimum wage was 7 or 8, so 10 sounds good. That's allowing people to gross around 1600/month on minimum wage. That doesn't sound unreasonable. I think you should be able to make ends meet on that. I've had to make ends meet on less, so I speak from experience. Sounds very fair to me.

March 16 2014 at 5:10 AM Report abuse rate up rate down Reply
contactjohn

Notice: University of Chicago School of Business, that's Rockefeller/Friedmann, supply side voodoo economics…. period.

March 14 2014 at 6:05 AM Report abuse +1 rate up rate down Reply
1 reply to contactjohn's comment
Tom Wilson

The 16 years prior to Ronald Reagan’s presidency, the U.S. economy was in a tailspin, a result of tax increases, dollar devaluations, wage and price controls, minimum-wage hikes, misguided spending, pandering to unions, protectionist measures and other fiscal policy mistakes.
The economy under Reagan experienced the largest continuous expansion of the U.S. economy since the settling of the West. Supply side policies of the eighties were a remedy for an oversight, a way to repair the economy without paying the price of run away inflation, not a sliver bullet and certainly noting " voodoo" about it. In fact the Laffer Curve however, can be found as early as the 14th century. Ibn Khaldun, a 14th century Muslim philosopher, wrote in his work The Muqaddimah: “It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.”Changing tax rates changed behavior, and changed behavior affected tax revenues. Reagan understood that lowering tax rates led to static revenue losses. But he also understood that lowering tax rates also increased taxable income, whether by increasing output or by causing less use of tax shelters and less tax cheating.
From 1986-2007, except for the short recession in 92-93 ( when Clinton raised taxes) the country was in essentially full employment, thanks to the Reagan policies, continued by the Republican Congress through the Clinton and most of the Bush presidencies.

There is a principle which is a bar against all information, which is proof against all arguments and which cannot fail to keep a man in everlasting ignorance - that principle is contempt prior to investigation

March 14 2014 at 9:19 AM Report abuse -1 rate up rate down Reply
JERRY V

The Arm Chair Economist are out in force making their ignorant comments. If anything they are amusing.

March 14 2014 at 4:01 AM Report abuse -3 rate up rate down Reply
Michael Corn

The article did not mention the sponsors because they are the Koch Brothers and big business. Who else can buy votes and payoff politicians with their Citizen United money? These are business owners who want to lower all wages around the world to the same rate, say 10 cents an hour. Their plan is to have kids get to age 15, reproduce like rabbits and have all the education they need to work the machines, then starve to death at age 25 so that they dont have to pay health or retirement benefits.

March 14 2014 at 12:44 AM Report abuse -2 rate up rate down Reply
GateMasterSavage

Well 7 Economists are Pro 10.10 Minimum wage vs. 3 Economists plus 500 jabronis who are against it. I'll take the advice of 7 economists, because I know where their information comes from. The 3 Economists and 500 jabronis are most likely conservatives and tea baggers.

March 14 2014 at 12:02 AM Report abuse +1 rate up rate down Reply
1 reply to GateMasterSavage's comment
jrb359

Yep. People that know that you should NOT spend more than what you take in. It's called common sense. Something a lot of people lack because the number 17.4 trillion means nothing to them.

March 14 2014 at 5:44 AM Report abuse rate up rate down Reply
rrllort

It doesn't matter what they think. The guy who thinks he is god & king knows everything! NOBODY can till him otherwise. If he had his way, he would pay $100.00 an hour minimum wage. Too bad it wasn't air force one that went missing!

March 13 2014 at 8:57 PM Report abuse -2 rate up rate down Reply
1 reply to rrllort's comment
jrb359

If he had his way, we would be $30 trillion in debt!

March 14 2014 at 5:45 AM Report abuse -1 rate up rate down Reply
Tom Wilson

Whatever its economic merits, the anti-$10.10 letter may suffer politically from its failure to propose a clear alternative. ******** The CLEAR alternative is for these people to take responsibility for their lives and get an education and take some initiative to become something other than " government cartage "!

March 13 2014 at 8:38 PM Report abuse -2 rate up rate down Reply
betty_brock

Small businesses may be forced to close their doors between minimum wage increase and Obamacare. If you want more money, get an education.

March 13 2014 at 8:35 PM Report abuse -2 rate up rate down Reply
1 reply to betty_brock's comment
jrb359

Most of these people can't comprehend what you are saying because they depend on big government to get them through life. America was great when the people took responsibility for themselves, but now we have half a nation of workers and the other half are parasites!

March 14 2014 at 5:49 AM Report abuse -1 rate up rate down Reply
cslinz62

One thing I would like to see is lower people's rent. If some can live on housing and pay almost nothing a month in their rent, then us folks making $10hr or less should get our rent lowered accordingly instead of it increasing. And don't rebut back at me with then move somewhere cheaper. There is not such thing anymore as cheaper rent anywhere.

March 13 2014 at 7:32 PM Report abuse +2 rate up rate down Reply
lebbrina

In the end, it won't make any difference for the hourly wage earner. The manager/owner will increase the price of milk, bread, goods and services to cover the increase. They really have no choice if they want to keep THEIR employees employed. We all will pay more even if we are not a wage earner. Fixed incomes and people on Social Security will be worse off. Any increased income tax will be collected by the government which they will waste or bulk up the billions that is sent out of our country. Congrats to us all for having solved nothing.

March 13 2014 at 7:31 PM Report abuse rate up rate down Reply