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Is the minimum wage the most misunderstood concept in all of economics? – Press Enterprise




One basic misunderstanding is to fail to distinguish between a private firm raising its wages paid, and a law compelling all and sundry to do the same.

Unhappily, this rookie error was committed by no less than the New York Times, the supposed newspaper of record. Recently it blasted out this headline: “When Amazon Raises Its Minimum Wage, Local Companies Follow Suit; New research suggests that when big companies increase wages, they drive up pay in the places where they operate — without a notable loss in jobs.”

Perhaps a recapitulation of some of the high points of Economics 101 will put matters in perspective.

It would be truly amazing for this to occur. Of course, when LeBron James gets a boost in salary this will not increase…

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