Freakonomics Maxes Out On The Minimum Wage

 You can always count on the Freakonomics podcast to challenge conventional wisdom. It is the podcast's imprimatur.

In the latest episode just released, Stephen Dubner dives headfirst into the rhetorical and politically charged mud pile called "the minimum wage debate."  

 

During the episode, established beliefs are challenged. Even though roughly three-quarters of the published economic research argues that raising the minimum wage leads to job loss, a significant portion of newer research essentially argues the opposite.

During the episode, Dubner introduces a distinguished panel of academicians with a diversity of views. Guests include: 

Betsey Stevenson, professor of public policy and economics at the University of Michigan.
David Neumark, professor of economics at the University of California, Irvine.
Arin Dube, professor of economics at the University of Massachusetts, Amherst.
Jacob Vigdor, professor of public policy and governance at the University of Washington.

 Dubner speaks with New Jersey U.S. Senator (D.) Cory Booker, who speaks about the odds of a $15 minimum wage passing the Senate, and how he's trying to convince his colleague West Virgina Senator (D.) Joe Manchin. 

"Manchin often makes the argument that a $15 minimum wage would be great in areas like where I live in New Jersey, which is the New York metropolitan area, the Philly metropolitan area, but is a lot different in his area now," notes Booker.

Booker continues: "My counter to him is that if you just look at the cost of living in West Virginia -- take, for example the least populous, most rural county in West Virginia. An average family with two adult earners and two children would need nearly $75,000 to afford an adequate standard of living without significant government assistance. 

"And unfortunately, today's median household income there is just over $46,000. So, even in your most rural areas, out away from big metropolitan areas like L.A. or New York or Chicago, the cost of living in America has become so staggeringly high that $15 an hour is arguably what families would need to make it."

During the episode, it's pointed out that the federal minimum wage has been raised during every presidency since its inception except four: Ford, Reagan, Obama, Trump.

In an exchange with Arin Dube, professor of economics at the University of Massachusetts, Amherst, Dubner says, "Basically, if a firm is not running itself well enough to withstand slightly higher wages, then they kind of deserve to go out of business?" 

 

Dube replies: "That's essentially the argument."

Listen to the episode here and on all podcast providers: https://freakonomics.com/podcast/minimum-wage/