This week we have a special foreign affairs edition of the Masters in Business radio podcast, speaking with Leslie Gelb, president emeritus of the Council on Foreign Relations. Gelb also worked for the Defense Department and the New York Times. The conversation ranged far and wide, and looked at (among other things) the decline of Europe…Read More
@TBPInvictus here: As I recently highlighted, Mark Perry – an AEI scholar and professor of economics - is playing very fast and loose with data surrounding employment in Seattle post its recent minimum wage hike. In his recent “report” on the subject, which was picked up far and wide by conservative outlets, Professor Perry wrote (emphasis mine):
“In June of last year, the Seattle city council passed a $15 minimum wage law to be phased in over time, with the first increase to $11 an hour taking effect on April 1, 2015. What effect will the eventual 58% increase in labor costs have on small businesses, including area restaurants? It’s too soon to tell for sure, but there is already some evidence that the recent minimum wage hike to $11 an hour, along with the pending increase of an additional $4 an hour by 2017 for some businesses, has started having a negative effect on restaurant jobs in the Seattle area. The chart below shows that the Emerald City MSA started experiencing a decline in restaurant employment…”
The minimum wage hike took place in the city of Seattle, population ~650,000. What’s all this talk about “area restaurants,” “the Seattle area,” and the “Emerald City MSA”? (Note that companies with under 500 employees — that includes most restaurants — the actual date is 2021, not 2017).
This is simply someone with an agenda deliberately being intellectually dishonest in an attempt to mislead readers and spread misinformation widely through the conservative echo chamber. It’s a tried and true method that, unfortunately, has worked time and again.
When Perry talks about Seattle (city proper) and the “Seattle area,” you may not know it, but he’s talking about two very, very different areas.
Legislatively, economically, legally and socially, these are two completely different regions. Perhaps most important of all, in terms of data collection for the subject at hand, the map below shows exactly how different they are:
Seattle, the city in question whose minimum wage is now $11, on its way to $15 over the next 3-7 years – is (as best as Paintbrush lets me draw it) the area within the red oval. The “Seattle area” or “Emerald City MSA,” as Perry misleadingly wrote, are the three more darkly shaded counties – Pierce (bottom), King (middle), and Snohomish (top) – engulfing Seattle and making it look, well, geographically tiny in comparison.
The MSA Perry referenced as being impacted by the new minimum wage has an overall population of some 3.6 million versus the aforementioned population of Seattle at about 650,000. What’s to compare? As Media Matters put it in their takedown of Perry’s work: “The employment trends of the entire region are not representative of the impact of a local wage ordinance in a single city.” But Perry does not care, as he’s repeatedly referenced the same irrelevant data point multiple times on Twitter. He is exactly the man whom Upton Sinclair was referring to when he said, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”
Why would anyone look at a MSA when it is the city – and ONLY THE CITY - that has the new minimum wage law. The New York equivalent would be to suggest that perhaps an ordinance in New York City might somehow have a ripple effect in White Plains, N.Y., or Hackensack, N.J. After all, they are both part of the greater tri-state region (there is a massive New York-Newark-Jersey City MSA). It’s absurd on its face, and any honorable analyst understands this.
This suggests that Perry is engaging in fraud or ignorance. Neither reflects on him favorably. Perry should apologize and AEI should retract that piece in entirety.
An analyst as intellectually dishonest as Perry apparently is could do something similar on the flip side:
Seattle Passes Higher Minimum Wage; Area Food Biz Employment Now at 134,000!
First, I’d point out that at the end of 2013, the most recent year for which we have good statistics on the city itself, Seattle city employment in two broad categories combined – Arts, Entertainment & Recreation and Accommodation & Food Services – totaled about 40,000, as seen below.
Source: American FactFinder
Then, I’d trumpet the “fact” that the “Seattle area” or “Emerald City MSA” (see what I did there?) has more than tripled that total to a whopping 134,000. I’d then claim victory at having “demonstrated” that the ordinance I supported was having its desired effect.
Source: St. Louis Fed
But I’d never do such a thing. Most reputable people wouldn’t.
My Two-for-Tuesday morning train reads: • Buzzkill Profs: Hedge Funds Do Half as Well as You Think (Bloomberg) • Who Killed Value? (Efficient Frontier) see also Why You Should Allocate to Value over Growth (Advisor Perspectives) • Did We Just Witness the Best Risk-Adjusted Returns Ever? (A Wealth of Common Sense) but see U.S. Lacks Ammo for Next Economic Crisis (WSJ) • Stop…Read More
Category: Financial Press
With the stock markets down almost (OMG!) 5 percent from their all-time highs, lots of folks are looking for signs that the bull is dying, if not dead. One of the more portentous omens is the recent decline and volatility of Apple’s stock. Or so it seems. For reasons too numerous to list here, Apple…Read More
Today’s column is going to wax a bit philosophical. Stay with me, its worth your effort. You do not really understand time. By “you” I mean you humans, and by “Time,” I refer to the abstract concept within which all human (excepting Billy Pilgram) structure events in a formal sequence. This has significant ramifications for…Read More
Welcome back to the monkey house. Cuba, Apple, Hedgies, Greece all get featured in our Monday morning train reads: • The Case Against Hedge Fund Managers (Chief Investment Officer) • Inside the Brain of Peter Lynch, Investing Genius (Investing Caffeine) • Cuba’s Next Revolution: Real Estate (World Property Journal) • Why is Bitcoin forking? (Medium) • Donald Trump, Through the Ages. (McSweeney’s) Continues here…Read More
Category: Financial Press