Ben Powell on the Minimum Wage, and Question From Uncle Bob
I hadn’t yet read this Ben Powell HuffPo piece on the minimum wage issue. A lot of it we have already seen before, but he gave some interesting facts I didn’t know.
Yet here’s something that is really bothering me in our discussions. Ben writes:
Informed apologists for minimum wage laws often cite David Card and Alan Krueger’s 1997 book, Myth and Measurement, which argued that the negative employment aspects of the minimum wage are minimal to non-existent. Of course, one reason they found little evidence of negative effects is precisely because the minimum wage has been kept low enough that it is not binding for the vast majority of workers.
More importantly, nearly 20 years of research since that study has pointed in the other direction. Economists David Neumark and William Wascher surveyed the vast literature studying the effect of the minimum wage in their recent book, Minimum Wages. They find that the bulk of the evidence accumulated over the last 20 years indicates that the minimum wage reduces employment for the least skilled workers and lowers their earnings. Card and Kruger’s study is an outlier, not the norm.
So what is the story? I know Ben is not misrepresenting Neumark and Wascher; even the literature reviews done by the people Krugman likes, say that that is what Neumark and Wascher report.
So what’s the deal? We’ve got “our guys” saying the literature is on our side, while “their guys” say the literature is on their side.
As much as I am surprised that economists disagree on which way employment moves after a minimum wage hike, I am absolutely astonished that economists disagree on which way economists think employment moves after a minimum wage hike.
(That’s not a typo; you may need to re-read that last sentence to fully appreciate the masterful prose here at Free Advice.)
Here is Neumark summing it up very quickly: http://www.youtube.com/watch?v=HhM4fddeF4Q
But the new heralded study on the pro-min wage side is here. It looks mainly at restaurants and retailing near and focuses on differences in minimum wages via state borders. According to proponents, it supposedly has corrected for some “mistake” that many other studies committed when finding a negative employment effect: regional growth differenes.
http://www.mitpressjournals.org/doi/abs/10.1162/REST_a_00039
I, myself, don’t have the expertise/background to criticize the study, but these “case studies” often find little to no effect while larger studies do.
LOL! Just in time!
This seems to be the equivalent of “Hedonics” for the Minimum Wage issue.
Neumark and Wascher is not the only lit review out there.
Does anyone really say the literature’s consensus is that it increases employment? I think of “consensus assessments” (lit reviews, meta-analyses, what have you) as being no effect or small negative (I personally don’t see those two as conflicting – lit reviews have sampling error too), and as Jordan points out the best study we have says no effect.
People who for some reason don’t think that’s the best study we have might sit on the more pessimistic end of the range and say it’s definitely a small negative.
People who won’t hear of any study that contradicts their econ 101 story are of course going to continue to disagree, but I don’t think that’s a very reasonable segment of the economics community.
“but I don’t think that’s a very reasonable segment of the economics community.”
Uhhh….you couldn’t be more wrong, actually.
73% of labor economists thought the 2007 increase would create unemployment, so its pretty far-fetched to believe they’d think another increase so soon wouldn’t do the same.
http://www.google.com/url?sa=t&rct=j&q=economist%20minimum%20wage%20survey&source=web&cd=1&ved=0CC8QFjAA&url=http%3A%2F%2Fepionline.org%2Fstudies%2Fepi_minimumwage_07-2007.pdf&ei=mMgoUYmiJ4Gu9ATEyoDYCA&usg=AFQjCNE_0vR-wJQJhU07sHJaSZ9L_rPckA&sig2=M1BTMq9QF-PWsFoIf_Kj8A&bvm=bv.42768644,d.eWU
You need to reread my comment.
You also need read your own link more closely, apparently. This is wrong: “73% of labor economists thought the 2007 increase would create unemployment”
“ Almost three-fourths of labor economists (73%) believe that a mandated minimum wage
increase set at 150% of the current wage would result in employment losses.”
Is DK the lawyer trying to say that “employment losses” does not necessarily mean unemployment? Yeah, yeah, I think everyone knows that employers may lay off some workers, but those workers may find employment elsewhere, meaning no unemployment.
No I’m trying to say that an increase to 150% is not the same as the 2007 increase – which was less than 150% when finished and spread out over the course of several years.
“Neumark and Wascher is not the only lit review out there.”
Yes:
(1) OECD Employment Outlook entitled “Boosting Jobs and Incomes” , based on a comprehensive econometric analysis of employment outcomes across 20 OECD countries between 1983 and 2003:
– The level of the minimum wage has no significant direct impact on unemployment;
http://bilbo.economicoutlook.net/blog/?p=1010
(2) This summary of 2 meta-studies:
“Economists have conducted hundreds of studies of the employment impact of the minimum wage. Summarizing those studies is a daunting task, but two recent meta-studies analyzing the research conducted since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers.”
John Schmitt, Why Does the Minimum Wage Have
No Discernible Effect on Employment, p. 22
http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
(3) “”Card and Krueger’s (1995a) meta-analysis of the employment effects of minimum wages challenged existing theory. Unfortunately, their meta-analysis confused publication selection with the absence of a genuine empirical effect. We apply recently developed meta-analysis methods to 64 US minimum wage studies and corroborate that Card and Krueger’s findings were nevertheless correct. The minimum wage effects literature is contaminated by publication selection bias, which we estimate to be slightly larger than the average reported minimum-wage effect. Once this publication selection is corrected, little or no evidence of a negative association between minimum wages and employment remains. “
Hristos Doucouliagos and T. D. Stanley. 2008. “Publication Selection Bias in Minimum-Wage Research? A Meta-Regression Analysis,” Deakin University, Australia.
(4) Dube, T. William Lester, and Michael Reich. 2010. “Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties,” Review of Economics and Statistics 92.4: 945-964.
(5) Summary here:
http://robertvienneau.blogspot.com/2011/03/card-and-kruegers-research-on-minimum.html
From the same source:
Firms disappearing due to wage controls = government-forced unemployment.
(1) not an issue in an economy run with Keynesian full employment.
(2) Also note carefully:
“The outcome is that the economy pushes productivity growth up and increases standards of living”
That is a positive externality.
The point of labor isn’t to work, but to fulfill individuals’ preferences. “Full employment” is not a positive externality unless it accomplishes this.
Further, not everyone wants to work, so “full employment” is an impediment to some people’s leisure or others’ capital-provided labor-reduction.
As well, productivity growth as a result of artificially reducing competition, which is what the Minimum Wage does, is effectively cronyism.
Keynesian full employment is completely consistent with private production to fulfill consumers’ preferences. Nor does it force people to work who do not want to.
Like many Austrians, you just see the words “full employment” and fail to even understand what that concept even means.
Businessmen are individuals, too; It’s their preferences that must be fulfilled, as well – not just consumers.
“Keynesian full employment is completely consistent with private production to fulfill consumers’ preferences.”
No it isn’t, because Keynesians desire full employment on the basis of force against individual property rights, which destroys consumer preferences and replaces them with the preferences of the state and those the state gives the stolen/printed money to.
Like most Keynesian cultists, you conflate workers “moving” and money “flowing” to be identical to free market exchange based on private property rights, because you ignore the individual value judgments and you focus only on the statistical numbers that mask the true reality.
“The point of labor isn’t to work, but to fulfill individuals’ preferences.”
Says stupid hedonistic economics.
People need to work to have a full life. Being deemed useless is a terrible harm.
No, says the scarcity in the world, and the ability to create wealth through work, and the ability to create more wealth through capital.
What sense does it make to say that “everyone matters” if you, yourself, don’t matter? Aren’t you part of the “everyone”?
Therefore, before you can be for anyone else, you must be for yourself.
That’s self-interest, not selfishness.
Further, whether or not it is noble to do charity work, anything that an individual works for belongs to him alone – otherwise he is a slave to someone else.
What follows from this is that whether someone is charitable or not, he is nevertheless entitled to what he worked (or traded) for.
Whether charity is good, neutral, or bad, keeping what one works for is not ever bad. (Unless, maybe, if we want to bring religion into the discussion, which is a separate matter.)
Says stupid parasites who on net destroy sovereign consumer valued wealth because they put their psychological feeling of uselessness above the liberty of their fellow men.
“People need to work to have a full life. ”
So THAT’S why we don’t have people who retire from work when their wealth is sufficient to supporting them.
It’s because they all desire to have less than fulfilled lives.
Agreed. I’d even say they work to fulfill their individual preferences for work!
“People need to work to have a full life.”
Funny, I thought people tried to find ways to work less. Too bad all the productivity gains over the last 100 or so years has meant less work time and more leisure time. I guess people in agrarian societies lead fuller lives.
Rakes and shovels don’t cost that much. If all they wanted to do was work for work’s sake, they don’t need the government to provide it to them.
No, what people need is the freedom to make as much money as they can when they’re younger, so that they can spend that money employing:
yacht builders who employ loggers and chemists;
loggers and chemists who, through experience, are able to be employed as private teachers;
private teachers who, because they like to eat out, employ cooks and waiters.
And so on.
(1) Keynesian :”full employment” can be achieved by the state robbing everyone of their incomes 100% and “employing” them to build giant pyramids. Of course the state destroying small businesses is “not an issue with Keynesianism”. It is not an issue with Keynesianism because Keynesianism is not concerned with work and output directed to sovereign consumer ends, but rather to simply work for work’s sake and to simply produce output for output’s sake.
That’s precisely why Keynes believed wars, pyramid building, and earthquakes can serve to benefit society. It’s because he didn’t care about individual sovereign consumer ends either, but rather the means of work and moving about.
Perfect for the statesmen to adopt intellectually, because the more people are “working”, the more the state can tax them.
The state can’t tax idle workers who haven’t yet adapted to the prevailing fickle consumer tastes and preferences, now can they? Steal money from the rich, or print money from a force backed monopoly in money, and the state can “employ” these workers making war machines and another road to the same institution for child brainwashing.
“Keynesian :”full employment” can be achieved by the state robbing everyone of their incomes 100% and “employing” them to build giant pyramids. “
Except no Keynesian advocates that, and Keynes certainly didn’t .
The passage in the General Theory about pyramids is in fact not even about governments’ building them at all.
It is rhetorical passage about the absurdity of waiting for often wasteful private sector investments to create recovery/employment in recessions/depressions: we may get millionaires who employ people building “mighty mansions” or pyramids “to shelter them after their death” (obviously he’s being rhetorical here) or erecting cathedrals or monasteries.
But, Keynes says:
“It is not reasonable, however, that a sensible community should be content to remain dependent on such fortuitous and often wasteful mitigations when once we understand the influences upon which effective demand depends.”
Keynes, General Theory, Harvest/HBJ, 1964, p. 220.
In other words: it’s better to end a depression by having socially and economically useful government spending (e.g., public works) than just waiting for the private sector spending, some of which might actually be wasteful.
As usual, the idiot M_F has no idea what he’s talking about.
No surprises there.
Wasteful to whom?
I can trade with someone whether or not I am part of their community, and the benefits are the same (or better) for me.
And, as Walter Block notes (I’m paraphrasing), the logic that justifies protectionism at the community level justifies it at the street and individual level, as well.
We trade with others BECAUSE we don’t want to make those things, ourselves.
We are FOREGOING labor when we trade; That’s where the benefits of the division of labor COME FROM – both parties work less for the thing they want through voluntary trades.
This is even true with low-wage jobs.
So what you’re saying is: if a private billionaire built a pyramid that took 70% of GDP (impoverishing the rest of the community) that would be just fine: after all, he’s satisfying his subjective utility preferences.
If the government stepped in and stopped him, that would be an outrageous evil violation of economic freedom!!
It is impossible for a private billionaire to impoverish anyone else by way of spending his own wealth as he sees fit, through voluntary exchanges, because nobody else is entitled to it.
Other people’s wealth does not belong to us. We have no claim to it. To think otherwise is to claim that billionaires are our slaves.
Billionaires, qua billionaires, owe us nothing. Wealth such as theirs can be created through voluntary exchanges in a free market.
And since each voluntary trade is paid in full, they don’t build up debt to anyone, let alone “the public”.
When I buy something at a store or fulfill a contract to someone, I owe them nothing after that. It’s the same thing with billionaires.
The only reason corporatists can steal from us is because of government-granted privileges and protections – especially through artificial credit expansion.
lol… So after all that: what you’re saying is: if a private billionaire built a pyramid that took 70% of GDP (impoverishing the rest of the community) that would be just fine: after all, he owes nothing to anybody and he’s satisfying his subjective utility preferences!
Awesome stuff. 🙂
And Keynes is attacked for (supposedly) advocating pyramid building.
LK you’re starting to sound Austrian so I want to make sure I understand your position. You’re saying it would impoverish the rest of us because (presumably) the billionaire would have to liquidate a lot of his wealth in order to finance the pyramid construction, and so ultimately what would happen is that instead of real resources going to replenish / expand the capital stock, they would go into the construction of a consumption good that only this eccentric guy would enjoy?
(I’m fine with that, but like I said, it sounds freakishly Austrian of you. This must only apply outside of a liquidity trap right?)
He is attacked for advocating doing that with other people’s money – not for advocating pyramid-building or window-breaking, per se.
And why would GDP matter? Keep the government from spending more than it takes in.
There is nothing inherently *Austrian* about what I’ve said, Bob Murphy.
You do not need an Austrian capital theory to say that if the construction of a billionaire’s pyramid took 70% of GDP, then obviously it would draw factor inputs and labour away from industries producing consumption goods and capital goods, impoverishing the community.
And you’d be fine with it, right? After all, any interference by government would be evil coercion against private freedom!
The factor imputs and labor belong to the sellers and workers, themselves; Nobody is entitled to them, so no one is impoverished when they are sold to someone else.
In fact, the block-layers will spend their money on something THEY like, which will probably not be pyramids, I’m guessing (not that there’d be anything wrong with them doing so).
(2) Only if you ignorantly define “productivity” as including anti-sovereign consumer valued objects such as state weapons of war and brainwashing institutions for children, and only if you define “increased standards of living” as people getting blown up and brainwashed.
A feature of monopsony is that not only is the demand for labor curve upward sloping for some ranges but the current wage rate is an equilibrium rate – if wage rates were lowered then less people would want to work and all qualified workers who want work for the current wage are employed.
How do supporters of the theory that monopsony holds in the low-paid job market and that a higher minimum wage would be beneficial reconcile that belief with the evident “involuntary” unemployment (defined as people who are qualified and would work at the current wage) that exists in that market?
Most economists believe that the minimum wage reduces employment. I don’t think there is much dispute over that.
There is a dispute over whether the weight of evidence supports this conclusion or not. There are some meta analyses purporting to show that it does, and some purporting to show that it doesn’t. Advocates on one side or the other do have the bad habit of only citing the analyses that agree with them (which is not surprising, but is unfortunant).
“There is a dispute over whether the weight of evidence supports this conclusion or not. ”
That’s because we can’t observe the counter-factual world where minimum wages were not increased, in a world where they were increased.
Keynesianism and interventionism are attempts to solve the problem that does not exist, free market “unemployment”. The funny money, regulations, drug wars, real wars, deficit spending, subsidies etc… all contribute to increasing poverty and all are impediments to free exchange and prosperity. As we try to explain and examine the obvious, Keynesians show up with their hair splitting and subject-changing in order to keep the brain-dead public oblivious to the obvious by claiming that what is simple to understand is too complicated for average people to understand.
http://tinyurl.com/as7xs7b
So there’d be no involuntary unemployment in a Rothbardian world?
“So there’d be no involuntary unemployment in a Rothbardian world?”
Well constructed straw man.
There would be less.
Of course, someone’s right to pursue employment ends at another’s unwillingness to employ them; No one is entitled to a job.
But the standard of living would increase for more people in a Rothbardian world because there would be no limit to the amount of wealth someone could voluntarily trade for, and that is a great incentive to produce.
In a Rothbardian world, there would be no mass unemployment in the mysterious magical Keynesian “macro” sense. That theory is nothing but a baseless hoax.
BTW, Here are two important statistics:
(1) World GDP (2007):
US $65.61 trillion
(2) Global annual value of major financial asset market transactions (2007):
US $900 trillion*
The significance is that global GDP is dwarfed by the value of major financial asset market transactions. ***** Any economic theory that ignores this type of spending and its sector of the economy (i.e., the secondary financial asset markets) is deeply flawed and liable to be missing something fundamental about modern market economies.
http://socialdemocracy21stcentury.blogspot.com/2013/02/world-gdp-versus-total-value-of.html
So, GDP obsessives like LK are wrong?
Minsky’s FIH is all about financial asset markets, as was Keynes’ analysis of money, financial assets, and liquidity preference, so your bizarre implication (Keynesianism is only or mainly interested in GDP) is laughable.
Oh, and:
“Mises never discusses the possibility of systematic speculative error except in the context of his trade cycle theory, in which speculators-investors are misled by improper monetary signals emanating from a fractional reserve banking. Yet if the future cannot be predicted, or as Shackle would say, if the future is created out of the actions of the past, why is it not least conceivably possible for speculative activity to be on net incorrect at least some of the time? Certainly, we have the empirical evidence of speculative bubbles that are endogenous to markets as an example of market instability. One would think that the extent and potential limiting factors that affect such endogenous instabilities would be of great importance for fully understanding market orders, yet it is an issue surprisingly missing in the Austrian literature. Hence, although, we can appreciate the force of Mises’ argument as far as it goes, it seems that a crucial part of the case for the effective functioning of a market economy is missing.”
Vaughn, K. I. 1994. Austrian Economics in America: The Migration of a Tradition, pp. 87–88.
(I read that as: “not [at] least”. Let me know if that’s wrong.)
The answer is that when people are using things of actual value as the money, speculation is limited by the actual resources of individuals.
I can buy a bunch of wood to build a mansion for someone, and then somehow the would-be owner didn’t pay, such that I am stuck with a bunch of wood. But the losses will be limited to me.
LK says:
So what you’re saying is: if a private billionaire built a pyramid that took 70% of GDP (impoverishing the rest of the community) that would be just fine: after all, he’s satisfying his subjective utility preferences.
If the government stepped in and stopped him, that would be an outrageous evil violation of economic freedom!!
That’s just a Keynesian utopian wet dream. Gabriel Kolko showed that the market does not tend towards monopoly and that the elite instead enacted “progressive” legislation to gain monopoly status:
http://tinyurl.com/ahdkjrh
Similarly, the market does not result in mass unemployment which is caused by “progressive”, interventionist and Keynesian policies. Your “cures” are the disease.
What has monopoly to do with some spending decision of a billionaire/millionaire on, say, a pyramid?
“Similarly, the market does not result in mass unemployment which is caused by “progressive”,”
Since there is no Rothbardian society that has ever existed in the real world, you have no empirical evidence for that claim.
And since market systems do not tend to full employment equilibrium, and FR banking and fiduciary media are sufficient to cause ABCs by themselves (by the logic of your own theory), it follows that your claim is absurd\, the fantasy of a committed cultist.
And don’t forget that it is LK’s precious “social democracy” that results in ethnic strife and ethnic slaughter in multi-ethnic societies. Been to Iraq lately?
http://tinyurl.com/bc9o4he
The “cure” is the disease.
Canada, the US, a number of Western European nations, Australia, New Zealand etc, are social democracies with multi-ethnic societies.
Have they collapsed into in ethnic strife and ethnic slaughter?
Oh, wait, empirical evidence doesn’t prove anything for Austrians.
Those countries still have private property and predominant market activities and were predominantly ethnic English/British until recently. Who gets what is still not predominantly determined by government decree. The new immigrant population is still relatively small and is able to somewhat acclimate to the existing culture.
Canada has had significant English/French disputes. Belgium has difficultly even forming a government. Ethnic slaughter is in the cards for Syria and Iraq. South African whites are being slaughtered by the thousands. The African colonies were unnatural conglomerations of ethnic groups when, upon independence, they adopted the democratic socialism they learned at college in the west. Disaster followed.
The Middle East was quite prosperous and liberal while it followed a version of free trade.
http://barelyablog.com/multiculturalism-the-18th-century-levantine-mindset/
These nations are multi-ethnic societies, and none of them has collapsed into ethnic strife and ethnic slaughter, despite your blathering idiocy.
As for South Africa, its problems are legacy of colonialism.
Regarding Africa, these were still mostly tribal societies and some of the instability there actually confirms the thesis of Steven Pinker’s book on the nature of and violence in tribal societies.
For clarification:
These nations [viz., Canada, the US, a number of Western European nations, Australia, New Zealand] are multi-ethnic societies, etc.
The actual thesis of the book on democracy in plural societies is that ethnicity almost immediately becomes the salient electoral issue in a multi-ethnic democracy. The only exceptions are where there are few “public goods” to be awarded by winning the election. Since you can download the book for free (12.6 mb), you are not in a position to critique it without having read it.
http://www.stanford.edu/~rabushka/politics%20in%20plural%20societies.pdf
Oh, and I love your comment over at Krugman-in-Wonderland:
Bob Roddis said…
“Progressives” are the same people who denied that Stalin and Mao were mass murderers. They cheered when the North Vietnamese and Pol Pol conquered Vietnam and Cambodia.
http://krugman-in-wonderland.blogspot.com/2013/02/krugman-and-ny-times-consuming-wealth.html?showComment=1361626929717#c1147838873035581915
lol.. You mean just as Rothbard the idiot praised the Vietnamese and Cambodian communists?:
Murray Rothbard, during the undertaking by the Viet Minh of a grievous blow to American commercial and security interests in South Asia in 1975, praised “the will and determination of the mass of Vietnamese (and Cambodians)” against which “none of America’s superior might and firepower could in the end prevail.” The murders of forty million “counterrevolutionaries” by Stalin, the gruesome anti-intellectual purges of the Khmer Rouge, the barbaric war crimes of the Viet Minh, all pale in comparison to the “bellicose imperialism” of the United States, contends Rothbard
http://www.freerepublic.com/focus/f-news/932116/posts
You’ve shot yourself in the foot there, bob.
I explained my opinion of Rothbard’s statements at Krugman-in-Wonderland. Again, you change the subject and employ ad hominem attacks.
The murders of forty million “counterrevolutionaries” by Stalin, the gruesome anti-intellectual purges of the Khmer Rouge, the barbaric war crimes of the Viet Minh, all pale in comparison to the “bellicose imperialism” of the United States, contends Rothbard
When did Rothbard contend that? That’s the warmonger Free Republicans talking.
Rothbard said:
This brings us finally to Vietnam and Cambodia. With its unfortunate and vicious nationalization of the merchants in the South last year, Vietnam has now taken its place as a typical Stalinist country. But Cambodia (“Democratic Kampuchea”) was something else again. It was undoubtedly the most horrendous regime of this century anywhere in the world. Not only did the Cambodian Communists quickly murder millions after taking power, and forcibly evacuate the cities at one blow; not only was death the penalty for the slightest infraction or disobedience to the regime: the key to its diabolic control was its abolition of all money, abolition it also enforced through murder and terror. Even Stalin, even Mao, retained the use of money; and so long as money exists, there is some sort of price system, and people are able to buy goods of their choice and move from place to place, even if in black markets or in disobedience to government regulations. But if money is abolished, then everyone is helpless, dependent for his very subsistence on the meager rations grudgingly handed to him by the regime in power. From the abolition of money came compulsory rural communalism, including the abolition of private eating, the institution of compulsory marriages, and the eradication of learning, culture, the family, religion, etc. Cambodia was horror incarnate.
The Vietnamese lightning thrust that smashed the Cambodian regime was not solely or even primarily caused by ideological considerations. Undoubtedly uppermost were ancient ethnic hostility between the more prosperous Vietnamese and the more backward Khmers (inhabitants of Cambodia); the desire of the Vietnamese rulers to dominate all of Indochina; anger at long-repeated border incursions by Cambodian troops; and the Vietnamese fear of growing encirclement by the combined forces of the U.S. and China, supporting Cambodia on its southwestern flank. But there is no denying the horror that even the Vietnamese Stalinists felt for the Cambodian monstrosity. When they entered the Cambodian capital of Phnom Penh, the Vietnamese described the desolation of that city, and spoke of the deliberate mass murders, the forced evacuations. A top Vietnamese Communist official, Phan Trong Tue, spoke of the late Cambodian regime as having killed masses of people “with hammers, knives, sticks and hoes, like killing wee insects.”
http://www.lewrockwell.com/rothbard/rothbard229.html
You shot yourself in the kneecap again, LK.
America should have minded its own business, rather than attempt to “make the world safe for democracy”.
The free market wasn’t responsible for the Vietnam War.
All of our wars are Progressive wars;
Made possible by Progressive central planning of the money supply:
War and the Fed | Lew Rockwell
http://www.youtube.com/watch?v=Tl9lS5k7H5M
And it doesn’t help to point at the Republicans, because they advocate the same Progressive policies:
Republican In Name Only – Explained and Exposed (Neoconned Speech)
http://www.youtube.com/watch?v=4vPknxZruPM
War, Ron Paul, and Conservatism
http://www.youtube.com/watch?v=SLUoWhWsOWk
He is is saying that raising the minimum wage will not effect the vast majority of workers because they are productive enough that employers are willing to pay more than the minimum wage. You are saying that raising the minimum wage will increase unemployment among the minority of workers who are not productive enough to earn the minimum wage. There is no contradiction here. Both statements are correct.
Samuel Johnson!!!!