Post in question

Just to preface this, I largely agree with the sentiment of Noah's overall post, but the evidence he uses to back up his claims isn't sufficient enough to match his claims imo.

To start, he begins with a photo showing that the percent of economists who say that they agree with the statement "Do min wages substantially decrease employment" (paraphrased) has been decreasing over the years. To be clear, this is not the same as saying that they disagree with the statement either. In fact, the 2015 IGM poll has a scale and a confidence weighting for that exact reason. It *is the case that economists are more likely to favor minimum wage increases, but $15 is a dramatic increase and in fact, in the latest poll about the $15 minimum wage, a whopping 15 of the 37 who responded indicated that they were completely uncertain about the sign of the effects and even more were uncertain of the actual magnitude of the effects.

I don't think the evidence supports the bold prediction that employment will be substantially lower. Not impossible, but no strong evidence. ~ Autor

Low levels of minimum wage do not have significant negative employment effects, but the effects likely increase for higher levels. ~ Acemoglu

The total increase is so big that I'm not sure previous studies tell us very much. ~ Maskin

Our elasticity estimates provide only local information about labor demand functions, giving little insight into such a large increase. ~ Samuelson

Lower, yes. "Substantially"? Not clear. For small changes in min wage, there are small changes in employment. But this is a big change ~ Udry

The next piece of bad evidence is his handwaving away of Dube's suggestion of 58% of the median wage as a local minimum wage. Here is his excerpt

Fortunately, there’s reason to think that small towns won’t be so screwed by a too-high minimum wage. The reason is that these small towns also tend to have fewer employers, and therefore more monopsony power. And as we saw above, more monopsony power means that minimum wage is less dangerous, and can even raise employment sometimes.

A recent study by Azar et al. confirms this simple theoretical intuition. They find that in markets with fewer employers — where you’d expect employers’ market power to be stronger — minimum wage has a more benign or beneficial effect on jobs

Looking at the paper, this is not sufficient evidence that a $15 minimum wage will have a small or zero disemployment effect on small or poorer localities. For one, using bains data and pop weighted data there are a significant number of localities where 50% of the median wage is quite lower than $10. That is 33% less than a $15 mw. The Azar paper finds that minwage earning elasticities much smaller than this and to back Noah's theory, it'd have to be the case that labor market concentration pushes down wages in such a massive way. Beyond that, the Azar paper warns not make the exact external validity claim that Noah is making!

One possible area of concern for an omitted variable bias arises from the fact that HHIs tend to be higher in more rural areas (Azar et al., 2018) while rural areas are plausibly less productive. Independent of labor market concentration measures, then, this productivity difference might affect employment responses to the minimum wage. Our expectation, however, would be that the minimum wage depresses employment more in less productive areas because in-creases in the minimum wage above the federal level are more likely to result in local minimum wages above workers’ marginal productivity. This kind of bias goes against our finding that the minimum wage tends to increase employment in the most concentrated areas.

There are attempts to control for it using population density, but the fact remains that the argument about disemployment that Noah is making simply might not apply for such a large change in the federal minimum wage in smaller localities.

Noah ends with this quote:

When the evidence is clear, true scientists follow the evidence.

That's probably a little too overzealous when applied to this specific situation. While the evidence is clear about the pervasiveness of monopsony, it's definitely not clear that 1) economists are well on board with a $15 mw, and 2) that it will have a small/negligible effect on low wage communities.

Edit: It looks like Noah does still believe that a $15 MW would have disemployment effects on rural communities, but that it will be lessened by his concentration argument. I was clearly not the only one who felt his language did not match that claim so I'll leave it as a point that still stands.