Robin Hanson Advocates Journalistic Malpractice

Posted by: Michael Mandel on November 29

Robin Hanson (who I generally like) writes:

Consider how differently the public treats physics and economics. Physicists can say that this week they think the universe has eleven dimensions, three of which are purple, and two of which are twisted clockwise, and reporters will quote them unskeptically, saying “Isn’t that cool!” But if economists say, as they have for centuries, that a minimum wage raises unemployment, reporters treat them skeptically and feel they need to find a contrary quote to “balance” their story.

Robin, any reporter who didn’t find those contrary quotes would be committing journalistic malpractice. And I find it horrifying that you should be suggesting that.

There are quite a few legitimate economists who have written papers arguing against the proposition that a higher minimum wage raises unemployment. The latest survey of the minimum wage literature, by David Neumark and William Wascher, admits

Clearly, no consensus now exists about the overall effects on low-skilled employment of an increase in the minimum wage.

True,Neumark and Wascher do believe that the evidence tends to support the proposition that a higher minimum wage increases unemployment, at least a little bit. Nevertheless, other “real” economists disagree, and journalists should be talking to them as well.


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Reader Comments

Robin Hanson

November 29, 2006 02:01 PM

Michael, my point was more about the *differing* standards applied to physics and economics, and less about what the common standards should be. As a matter of current journalistic practice, media coverage of eleven dimensions, and other weird physics claims, does not nearly as often search for contrary quotes.

Mike Mandel

November 29, 2006 02:28 PM

Hi Robin,

I guess I read your post differently because you put the word 'balance' in quotation marks, giving it a negative spin. Okay..do you think that 'balance' in reporting on economics is good or bad? And should reporters should be treating physics more skeptically?

On a more general note, you hit one of my pet peeves. All too often, I read an economist accusing reporters--or a particular reporter--of not understanding economics. Sometimes the charge is accurate. But most of the time, the problem is that the empirical evidence is murky, or the economics profession itself is split on the topic, and the reporter is accurately picking up on that split.

If anything, I think reporters aren't skeptical enough, and there's not enough attention on the internal debates in economics. Take the question of the impact of the budget deficit on growth. For many economists, it's as clear as day that reducing the deficit would help future growth. But the very large body of empirical research is nowhere that clear-cut.

Robin Hanson

November 29, 2006 03:35 PM

If I complain about anyone it is about the public - journalists mainly just give the public what it wants. For example, it is a shame that the public will mostly only tolerate two levels of uncertainty being communicated, controversial and uncontroversial. Uncontroversial claims are presented without contrary quotes, while controversial claims are presented with them.

Given this constraint, the main question is how strong a consensus should there be before an issue is to be reported as uncontroversial. And my complaint here is that the public wants a low threshold for gee-whiz physics (and for medicine), and a high threshold for economics.

Honestly the consensus among economists that minimum wages hurt employment is pretty damn high, as the rest of the abstract you link shows. Medicine and physics reporting would look very different if the usual minimum-wage standard were applied there.

Mike Mandel

November 29, 2006 04:42 PM

Hi Robin

The Neumark-Wascher paper has a very nice table that lists 95 studies or substudies (by my count) on the employment effects of raising the minimum wage. Negatives (decreased employment) outnumber positives, but the positives are there, and the insignificants outnumber them both.

Let me do a little experiment. Journalists like newness, so let me focus on the 21 studies that are dated 2004 and after. You will have to trust me that I am doing this blind, and will accurately report the results.

What I get is 10 negative studies (higher minimum wage hurts employment); 5 mixed studies (higher minimum wage raises employment for some groups, reduces it for others); 4 insignificant studies; and 2 positive studies (higher minimum wage raises teenage employment). I don't guarantee these categories..I did them quickly, based on the summaries in the table.

This seems about right to me. Is this strong enough evidence that journalists should treat the negative employment effect of a minimum wage hike as a fact?

Robin Hanson

November 29, 2006 05:03 PM

If the ratio of 10 negative to 2 positive holds up in the rest of the studies, that would be about 50 negative to 10 positive. Given how many things we know can mess up studies like this, and the strong theoretical arguments we have, I'd say the case here is a lot stronger than many other issues that are reported as uncontroversial. So if you this is still below your threshold to report as uncontroversial, you should report a whole lot more in physics and medicine as controversial.

Mike Mandel

November 29, 2006 05:40 PM

Robin,

I'd factor the mixed studies in as well. For example, one study, highlighted by Neumark and Wascher as reliable, found an employment increase for hotel and lodging establishments, along with an employment decrease for eating and drinking establishments. Neumark and Wascher note that "theory does not predict employment declines in all industries, or even all low-wage industries." Ah....that's interesting.

My bottom line conclusion is that in general the employment effect of a minimum wage increase would tend to be negative and small, but for any particular industry or group of people, the effect might be positive, depending on the circumstances.

Given this, I would be disappointed in any journalist who reported the effect of a higher minimum wage as a noncontroversial and simple decline in employment. I do think that if I got the main players in one room, I could get them to agree that the employment effects, negative or positive, are "small." So I would be satisfied with "probably negative, but small." Does that work for you?

As for physics and medicine...you can be sure that I think that an awful lot of medicine should be treated as "non-evidence-based." I believe that reporters in general should be more skeptical and willing to probe assertions by experts. That requires journalists to have more sophistication about the subject matter that they cover. We can discuss, if you want, how much sophistication is necessary.

Robin Hanson

November 29, 2006 07:01 PM

Mike, you hold high standard and are proud of them, and you say you wish medical journalists would hold such high standards. But you should realize that your high standards is probably one of the reasons you cover economics more than medicine. There are many reporter-hopefuls who fail; those who succeed do so in part because they find a home where readers like their style. In the end the readers are choosing high standards for economics, and low standards for medicine, with our without your principles.

Mike Mandel

November 29, 2006 08:03 PM

Robin,

Fair enough. I think we can both agree on that...and thanks for the discussion.

Robin Hanson

November 30, 2006 06:54 AM

Yes, thanks for a good discussion.

P.S. Could we at least agree that a minimum wage of $200 an hour, if vigorously and broadly enforced, would have an devastating effect on employment, and on the economy?

Bill Plank

November 30, 2006 01:26 PM

I've read this discussion with interest and I think that Robin's final comment has some value. In all these studies, I would guess the increases in minimum wage being discussed are small and incremental ones. Which will, of course, make it difficult to determine accurately the effect. Has anyone done a study where the effect of say, doubling the mininimu wage was looked at. Many of the advocates of so-called "living wages" would probably think that was about right.

Don Ake

November 30, 2006 02:38 PM

There are benefits and costs to raising the minimum wage. Journalists who do not understand basic economics only consider the benefits. Some economists only consider the costs. It would be great to raise the minium wage to where marginal benefits equal marginal costs, but this calculation would be difficult and would vary by industry and region.

Brandon W

November 30, 2006 06:40 PM

In real terms, the minimum wage is the lowest it's been since 1950.

Mike, doesn't it seem that the "lowest/highest since 1950(ish)" has been coming up a lot with economic statistics, lately? Are we really reverting that much, or are we coming full circle on... something?

Thank you for your interest. This blog is no longer active.

 

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