NOL: Minimum Wages: Where to Look for Evidence

El problema de los salarios mínimos está muy presente en la opinión pública americana. Aquí unas segundas reflexiones para Notes on Liberty sobre dónde buscar (y no buscarl) los efectos producidos por este tipo de precio regulado.

A recent study on the effect of minimum wages in the city of Seattle has produced some conflicted reactions. As most economists expected, the significant increase in the minimum wage resulted in job losses and bankruptcies. Others, however, doubt the validity of the results given that the sample may be incomplete.

In this post I want to focus just one empirical problem. An incomplete sample in itself may not be a problem. The issue is whether or not the observations missing from the sample are relevant. This problem has been pointed out before as the Russia Roulette Effect, which consists in asking survivors of the increase in minimum wages if the increase in minimum wages have put them out of business. Of course, the answer is no. In regards to Seattle, a concern might be that fast food chains such as McDonald’s are not properly included in the study.

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