Is That Minimum-Wage Study Real, or Is It Bogus?
A 10-point checklist to help you determine when conservative groups are trying to feed you disinformation on minimum-wage increases
I’ve been writing about the Fight for $15 campaign for over five years, covering the push both here in Seattle, the first major U.S. city to approve a $15-an-hour minimum wage, and nationwide. If you do anything for five years, you start to recognize familiar patterns of behavior that repeat again and again — and the minimum wage conversation is no different.
Conservative politicians and the business lobby promote several arguments every time a minimum-wage increase happens anywhere in the United States. First, news outlets profile a few small business owners who warn, with no proof, that businesses will close; then the media huddles around failed businesses and pin their closure on the wage, despite all the signs to the contrary; and then finally, once the sky doesn’t fall, local pundits argue that while a higher minimum wage might be right for big cities like Seattle, it would surely decimate the job market for workers elsewhere.
These arguments against minimum-wage increases are incredibly predictable — in fact, they’re so obvious that they’re starting to lose their effectiveness. For four decades, Republicans and Democrats alike have presented trickle-down economics — the theory that giving money to the wealthiest 1% in the hopes that that money will “trickle down” to the rest of us in the form of high paying jobs — as indisputable scientific fact. Those arguments have grown stale and easy to debunk.
But there’s one anti-minimum-wage tactic that’s still pretty effective, because it preys upon our trust of academia and research.
Most of us are primed to trust studies, and for good reason: Recognition of expertise is a central pillar of a complex society like ours. We can’t possibly test every thesis in the world all by ourselves, so we have to rely on smart people who have devoted their lives to building a solid and growing base of knowledge in a specific subject. But in truth there are a lot of bad actors out there who try to exploit our trust in research by creating and promoting bunk studies on a multitude of subjects including climate change and, yes, the minimum wage.
Of course, not every negative study is the product of a shadow conspiracy of Chamber-of-Commerce types. Many of them simply come from unimaginative academics who have been educated by trickle-down traditionalists, and so their assumptions lead them to automatically calibrate their studies to look for negative effects, even when there are no negative effects to be found.
But regardless of the intent behind these negative minimum-wage studies, they get around very quickly. Reputable studies show that the media is three times more likely to cover a minimum-wage study if it draws a negative conclusion, and there’s a whole conservative network out there just waiting to amplify those reports. If you go to certain parts of the country that have been fed bad studies by Fox News and their Facebook algorithmic bubble and ask a random person what the $15 minimum wage has meant for Seattle, they’re likely to tell you that the city’s unemployment rate has skyrocketed and robots are doing all the work. Neither of those things are true, but a Serious Study compiled by a Serious Research Team said it would happen, so who needs reality?
It’s unfortunate that there’s no single arbiter of fairness when it comes to economic studies, and that bad actors are exploiting these studies to promote their agenda.
In our podcast Pitchfork Economics, my coworkers Nick Hanauer and Jasmin Weaver talked with economist Ben Zipperer about how to recognize a bad minimum-wage study. I compiled their observations into a handy checklist of 10 warning signs for you to consult the next time you read a headline in a legitimate news source, warning that “experts” have found the minimum wage is terrible for everyone.
Concern Troll Studies
These studies are designed to prioritize the imperilment of liberal-friendly topics in order to turn likely minimum-wage supporters into skeptics.
- Does the study over-emphasize teenagers? Does it draw a conclusion between increased minimum wages and teen crime and juvenile delinquency? The truth is that youth unemployment is much higher than it used to be because more students are focusing on increased school demands — they’re not looking for work because they’re getting ready for college and engaging in extracurricular activities.
- Does the study warn that raising the minimum wage is bad for the environment? These studies tend to be built on faulty information — the old debunked claim that raising wages kills jobs — to build shaky arguments including the suggestion that your plastic bottles won’t be recycled. This doesn’t reflect the reality of the minimum wage, or how conservation works.
- Does the study highlight franchise owners suffering outsize impacts after the minimum wage increase? The truth is that franchises — particularly Subway — are often bad business models; they exploit owners at the expense of the larger corporation. If the study shows a bunch of fast-food places closing while the unemployment rate continues to fall, odds are good that the minimum wage isn’t at fault — a pernicious business model is.
- Does the study suggest increasing the Earned Income Tax Credit as a way to help workers instead of raising the minimum wage? If so, odds are good that the study was intended to really benefit large corporations. The EITC is basically a government subsidy of low-wage employers, allowing businesses like Walmart and McDonald’s to keep their wages artificially low and their profits impossibly high.
Data Contortion Studies
These studies jump through some weird hoops in order to get results that benefit the trickle-down worldview.
- Does the study rely on a synthetic model? The University of Washington study on the minimum wage got a lot of attention when it compared wages of real minimum-wage workers in real Seattle to the wages of minimum-wage workers in “Synthetic Seattle,” a statistical model made up of a bunch of different parts of Washington that didn’t raise the minimum wage. The UW study found that while wages and employment went up in real Seattle, wages and employment went up even higher in the imaginary Synthetic Seattle that they created. It’s just as tortured and ridiculous as it sounds, but that bit of (manufactured) bad news was enough to launch a fleet of “SEATTLE MINIMUM WAGE BACKFIRES” headlines on conservative sites around the world.
- Does the study suggest that the minimum wage hurts the very people it was intended to help? That’s a sure sign that the study was created with a trickle-down frame in mind. If you create a study in order to prove that the minimum wage is bad, you’ll probably find that the minimum wage is bad. Unfortunately, findings that confirm trickle-down biases don’t actually hold up to reality — like when the University of Washington minimum wage study team embarrassed itself by reversing course on a negative study after more data came in showing positive results.
- Does the study demand Olympic-level data gymnastics to make its point? There was a study that warned raising the minimum wage would cause terrible restaurants with low Yelp ratings to close. It didn’t warn that unemployment would rise, or that robots would steal jobs. It warned that one-star restaurants on Yelp’s five-star scale would be more likely to close if the minimum wage would go up. Uh, okay?
Confirmation Bias Studies
These studies ask people who think the minimum wage is bad if they think the minimum wage is bad.
- Does the study survey employers about what they’ll do if the minimum wage is increased? Here’s the thing: American small business owners are amazing. They figure out how to thrive in a very competitive market, and they keep their customers and employees happy as they do it. But if you ask a small business owner if they want to pay their workers a higher wage, they will probably say they do not. That’s all these surveys are. One Chamber survey of employers before Seattle’s $15 minimum wage was adopted found that restaurateurs warned that $15 would cause a 20% price increase in fine dining (didn’t happen) and a loss in benefits for employees (also didn’t happen). Instead, once the wage was adopted, they adapted to the new reality, as American small business owners always do. These studies are worthless.
- Does the study survey orthodox economists? A 2015 survey of economists found that almost 75% of them opposed a $15 minimum wage. Please note that this wasn’t a study — no research or statistics were involved. It simply asked a bunch of economists how they felt about the minimum wage. Just as it’s important to distinguish the difference between the opinions in a newspaper’s editorial section and its fact-based journalism, it’s also important to remember that there is a significant difference between an economists’ prediction and an actual economic study. Real studies are peer-reviewed and replicable, while surveys simply ask what economists think might happen. It’s unsurprising that they were opposed, since mainstream economics has drunk the trickle-down agenda Kool-Aid from 1980. The status quo will always fight to maintain itself. That’s all these surveys are.
Finally, Consider the Source
One more thing, and this is probably the most important point: Pay attention to where the study is coming from. If a study was funded and is promoted by a local Chamber of Commerce, it’s probably biased. If the study comes from the “bad EPI” — by which I mean the right-wing Employment Policies Institute, not the great Economic Policies Institute — it’s going to promote a pro-owner, anti-worker agenda. (Many of the studies I used for examples above were promoted by the bad EPI.)
It’s unfortunate that there’s no single arbiter of fairness when it comes to economic studies, and that bad actors are exploiting these studies to promote their agenda. But the good news is that there are a lot of great people out there doing excellent research in the field. With this checklist, you’ll be able to discern the difference between the two at a glance.