Thomas Piketty’s new book is getting strong approval from the Krugmanites of the left, but the critiques are coming forth as well,
This from Real Clear Markets Diana Furchtgott-Roth, The Systematic Errors In Thomas Piketty’s New Book [1] :
Excerpts:
Piketty states, “From 1980 to 1990, under the presidents Ronald Reagan and George H.W. Bush, the federal minimum wage remained stuck at $3.25, which led to a significant decrease in purchasing power when inflation is factored in. It then rose to $5.25 under Bill Clinton in the 1990s and was frozen at that level under George W. Bush before being increased several times by Barack Obama after 2008.” (page 309).
Wrong, Professor Piketty. The federal hourly minimum wage rose twice in the presidency of George H.W. Bush, from $3.35 to $3.80 in 1990 and then to $4.25 in 1991, a 27 percent total increase. Then, under President Clinton, it rose to $4.75 in 1996 and $5.15 (not $5.25, as Piketty states) in 1997, a 21 percent total increase.
The next increase in the minimum wage, from $5.15 to $7.25 over three years, a 41 percent increase, was signed into law in 2007 by President George W. Bush. The federal minimum rose to $5.85 in 2007, to $6.55 in 2008, and to $7.25 in 2009. President Obama has not yet signed a minimum wage increase into law, despite beginning his first term with the political advantage of a Democratic Congress.
One might overlook one isolated error as sloppiness to which we are all susceptible. But Professor Piketty’s supposed history of changes in the minimum wage is not tarnished by a single error, but by a vast array of systematic errors.
His history is pure revisionist fiction, and revisionist fiction with a political purpose: making Democratic presidents look magnanimous and Republican presidents look uncaring. Yet, over the past quarter century, the period Piketty describes as showing a dramatic increase in inequality, Republican presidents signed into law larger percentage increases in the minimum wage than did Democratic presidents.
Piketty suggests that America copy France, where the minimum wage in 2013 was 9.43 euros ($13 dollars) an hour. But the consequences of the minimum wage can be seen in the differences in youth unemployment rates in the two countries. In 2013, young people aged 15 to 24 had an unemployment rate of 24 percent in France and 16 percent in the United States, according to Organisation for Economic Cooperation and Development statistics. Germany has no minimum wage: its youth unemployment rate was 8 percent last year.
Another reason we might not want to copy France: OECD data [2] also show that in 2012 France’s per person GDP was 70 percent of per person GDP in the United States.
HKO
Like Krugman Piketty is a political hack dressed in economist clothing. Why are we so wont to emulate Europe without studying its outcomes?