25 May 2016

Contra Krugman as You’ve Never Heard It Before

Contra Krugman 18 Comments

In front of a live audience! This was from last Saturday’s Mises Circle in Seattle. Good stuff.

18 Responses to “Contra Krugman as You’ve Never Heard It Before”

  1. Daniel Kuehn says:

    Wait a minute! My arguments on this the other day didn’t put an immediate halt to the production of this video?!?!?

    • Andrew_FL says:

      In order for that to have happened, you would have to have had a good point.

    • Aby says:

      Hi Daniel,
      What do you think the min wage in the US would be if you calculated it the way it is done in Denmark? Lower or higher than the official number(s)?

      • Daniel Kuehn says:

        The numbers I’ve seen suggest higher though I’ve seen one guy suggest the commonly reported numbers do the PPP calculation wrong. I haven’t done it myself.

        But higher or lower isn’t the really tricky question here – there’s variability across occupations and industries in Denmark which dramatically complicates whether it’s more or less binding – and that’s the really interesting question.

        • Aby says:

          Sorry, maybe my question was not clear.
          I have looked up what the average minimum wage is Denmark, too.
          What I am asking is: If you calculated the min wage FOR the US the same way it is done in Denmark would that number be higher than the official min wage of the US?

        • Capt. J Parker says:

          A $20 “minimum wage” in denmark is Not binding. I offer the following as proof.
          Here’s data on what a student intern gets in denmark at Novo-Nordisk. https://www.glassdoor.com/Intern-Salary/Novo-Nordisk-Denmark-Internship-Salary-EI_IE3498.0,12_IL.13,20_IN63.htm A low paying job to be sure but one for a Brand Name Multinational Drug company.
          It’s DK8,000/month. or about DK55/hour. Purchasing Power Parity for Denmark was DK8.48 per USD in 2014
          so an intern at Novo Nordisk is making about $6.50 per hour not $20. So, not binding.

          • Tel says:

            I came up with a pretty similar figure last thread, the interns at least get paid in Denmark (which is better than nothing) but yeah those entry level wages are low.

            I would guess that if you take a snapshot of the whole workforce probably only a small percentage are interns. But if you take a longitudinal study of people’s whole working life (as Tom mentions in the talk) you would find a much higher percentage who have been interns at some time or other.

            This is the whole thing about a hard and inflexible minimum wage removing the lower rungs on the ladder (especially when applied at the federal level in a country like the USA), so it gets much harder to start out in life, and for some people once they find themselves locked out, they get onto an endless cycle of handouts, wealth transfer, etc. This feeds the whole socialist envy machine, provides fodder for activism, and kicks off a downward spiral.

          • Daniel Kuehn says:

            I have no idea how the minimum wage applies to interns in Denmark. It’s for specific classes of workers, they may very well not be covered. That doesn’t mean it isn’t binding for covered workers. We’ve already all made peace in the last thread with the fact that the coverage rate isn’t 100% in Denmark (it isn’t here either).

        • Andrew_FL says:

          Here’s a question: If Denmark’s union wages now count as price controls, shouldn’t we calculate the American minimum wage by counting every union contract indexed to the minimum wage?

          We’d probably have the awkward situation of the “average minimum wage” exceeding the actual median wage. Well, awkward for you, anyway.

        • Major.Freedom says:

          Aby, Denmark does not have a minimum wage.

    • Bob Murphy says:

      DK we recorded this before the argument about Denmark, is that what you mean?

      • Daniel Kuehn says:

        I was joking. As in – they should have slapped their heads, realized their error, and never posted it.

        • Bob Murphy says:

          Right, but just to be clear, Tom and I didn’t challenge Krugman about Denmark’s minimum wage. It was only after we recorded this that I saw the comment to a David R. Henderson post at EconLog about it.

          • Daniel Kuehn says:

            Because I like you so much I’m going to be straight with you: I did not listen to the episode 🙂

  2. Tel says:

    Finally you have a reason to buy one of those massive wide screen monitors.Those little red coffee shop chairs would also be a great addition to any modern household.


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