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This Won’t Hurt a Bit

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This Won’t Hurt a Bit

The New York Times sees no downside in performing uncontrolled experiments on the labor market. February 24, 2016
New York
Economy, finance, and budgets

Hold still, low-wage America, the editors of the New York Times would like to perform an experiment on you. They want to turn the minimum-wage dial all the way up to $15 per hour and see what happens. It is, in their view, a matter of “human rights.” Will such a massive shock to the system hurt? Of course not. Or yes. The truth is, the New York Times has no idea. Many people fear that if a law bars you from performing an hour of work for less than $15—when today your hourly rate is only $8 or $9—you may have difficulty finding a job. According to the Times, though, “there is no proof for or against that position,” because no one has ever tried such a thing.

Now, you seem nervous. Don’t be. The Times has conducted rigorous analyses to ensure there will be no long-term side effects from your participation in this experiment. Specifically, it found a rule of thumb suggesting that “a robust minimum is one that equals at least half the average wage for typical workers,” so as long as America’s average wage is $30 per hour, you have nothing to worry about.

Of course, the Times reports the actual average is $21 per hour. But stay calm—it doesn’t want the minimum to hit $15 until 2022. Assuming inflation remains comparable to the recent past, they only need six straight years of 5 percent real wage growth to get that average up to $30. How often does that happen? Only never.

Also, I don’t mean to alarm you, but that $21 estimate itself seems rather generous. According to the Bureau of Labor Statistics, the median hourly wage as of May 2014 was only $17.09. Interestingly, there are some places where the median is $21—New York City, for instance. But the Times isn’t proposing to conduct its experiment in just New York City. It believes that all low-wage earners throughout the country should serve as subjects, including, say, workers in Myrtle Beach, South Carolina (median hourly wage of $11.64) and the more than 200 other metro and non-metro areas with a median below $15 (meaning most workers earn less than the proposed minimum).

I see many of you may be worried that this experiment will cause jobs to disappear. I see you getting up to leave. I’m sorry, but you’ll find the exits locked. The editors feel you may be “miss[ing] the big picture.”

Yes, the experiment could be made optional, with some individual states or cities raising their minimums and the rest of us learning from that experience. Indeed, some have done just that and we will have results long before 2022. The experiment also could be made sensitive to local conditions, targeting a minimum in each region relative to that region’s average wage. It could be made gradual, too, perhaps seeing what happens at $10 before going to $12, before going to $15.

But, according to the Times: “Economic obstacles are not standing in the way of a $15-an-hour minimum wage. Misplaced caution and political timidity are.” You in the back—still trying to get out—that’s you they’re talking about. Why all this misplaced caution over future employability? True, the editors have “no proof” their experiment will not be a disaster. But they wrote that a full 346 words earlier in their editorial. They have now talked themselves into denying with confidence the possibility of “economic obstacles.”

The experiment, plainly, is not for your benefit as participants. But then again, experiments rarely are. No wonder, in the editors’ view, “the risk in keeping the minimum too low is bigger than the risk of raising it too high.” Yes, you will be risking a great deal when—rather than gradually adjusting the dial—they turn it so hard that it snaps. But watching the drama unfold from behind the one-way mirror at New York Times headquarters will be so fascinating. And the thoughtful reporting of the results, no matter how bleak, will make great copy.

Photo by Sam Chills

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