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Comment by AnthonyMouse | Hacker News Reader

Policy-based evidence making. Reasonable economists find an inconvenient result, so pressure them to recant. Then they print something that doesn't contradict the original result, but it's less adversarial to the policy, so call it a reversal in the headline.

> As was demonstrated back in 1994 by economists Alan Krueger and David Card, modest, gradual wage increases have not been shown to reduce employment or hours worked in any significant way.

In other words, small changes have small effects. But also small benefits. What's the point of something that at best only breaks even?

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A policy that is generally break even from an efficiency standpoint but reduces unwanted negative outcomes like poverty and income inequality is a clear win.

> A policy that is generally break even from an efficiency standpoint but reduces unwanted negative outcomes like poverty and income inequality is a clear win.

But the break even is on poverty and income inequality, even before you consider the inefficiencies. Then the money has to come from somewhere -- either the employer (in many cases a local small business) has to eat it, or they pass it onto the customer in the form of higher prices. It also makes local businesses less competitive against the likes of Walmart and Amazon.

That would only happen if the employees with cut hours then didn't spend their now-free hours on other stuff. If they just end up twiddling their thumbs, sure, maybe it's break even.

Maybe the people whose hours get cut are those who need the extra time more than the extra cash. Maybe they take that extra time and use it making money elsewhere, outside of the scope of what the study could measure.

Do you know what those people did with that now-free time?

> Maybe they take that extra time and use it making money elsewhere, outside of the scope of what the study could measure.

A study measuring hours worked that didn't account for hours worked in other jobs would be pretty useless.

> Do you know what those people did with that now-free time?

Something valued at no more than their original wage, as demonstrated by the fact that they had been willing to not do it in exchange for that amount of money. Meanwhile the thing they were previously doing at work was valued at least in that amount, as demonstrated by the fact that the employer had been willing to pay that much for it.

> Something valued at

I mean, good point, almost a great point, except, by whom? There are other forms of value than money.

You're right that it's unlikely they've made up the overall reduction in wages by doing something else and why, but you're missing what I'm trying to point out.

I gather your point is that the employee gets the value rather than the rest of society. But that's just the broken window fallacy.

Most companies' margins are small. More than 90% of the value typically goes to someone else -- customers, other employees, suppliers (and their employees), etc. Even the business owners for a lot of small businesses are only scraping by. There is no guarantee that 0.75X value can outweigh 1.25X value just by going to one person rather than another, and all the usual reasons to expect that it won't.

Oh hmm, no, that's not my point. My point is that unless the study also looked into what the people with fewer hours then did with the now-free hours, we all have insufficient information with which to make a good/bad judgement call on it.

I don't follow your utilitarian math. Can you rephrase?

> that the employee gets the value rather than the rest of society.

I don't think drawing this line is reasonable. The employee is part of society, trying to reason from a starting point of separating them from it just seems silly.

As far as I understand your argument, I definitely do not agree that it's a broken window fallacy. In your view, what is the broken window in this case?

(Not the fallacy, the thing that would be the literal broken window).

> Reasonable economists find an inconvenient result, so pressure them to recant

Who pressured them?

When the study was originally published there was a large volume of stories criticizing it for reaching an undesired conclusion.

Economists pushing views and rationalizations against labor-friendly policies (including minimum wage hikes) tend to do pretty well for themselves in America, very odd that they'd feel pressured to recant something that's well received in a lot of circles. Maybe they actually were just wrong the first time around?

> Economists pushing views and rationalizations against labor-friendly policies (including minimum wage hikes) tend to do pretty well for themselves in America, very odd that they'd feel pressured to recant something that's well received in a lot of circles.

The economists who do well producing those results work for think tanks (which partisans use to push their agendas and everyone else disregards as biased). These economists work for a public university.

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