Claims

Factual · Economics and markets

“Like, you, I believe that a minimum wage would definitely, is a cause of more employments or robots or jobs going to places where the wages are lower.”

Nassim Taleb, interviewee · 10 July 2017 · Nassim Nicholas Taleb on Work, Slavery, the Minority Rule, and Skin in the Game (EconTalk)

Taleb said he believes a minimum wage is definitely a cause of more unemployment, more use of robots, or jobs moving to places with lower wages.

Mostly true True in substance, wrong in a detail.

What would count as true or false

The claim is judged against the economic research literature on minimum wages as of 2017. True: a strong consensus of empirical studies finds that minimum wages cause job losses, automation or relocation of jobs to lower-wage places. Mostly true: the evidence broadly supports these effects but finds them modest, or limited to large or binding minimum wages. Mixed: the literature is genuinely divided, with credible studies finding employment effects and others finding none. Mostly false: the claim stated as a definite cause rests on some studies or on specific cases (for example, large increases), while much of the high-quality evidence finds small or no employment effects; this includes a contested effect stated as established. False: the evidence shows that minimum wages do not cause these effects.

Evidence

1. Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research NBER (Working Paper 12663; authors David Neumark and William Wascher) · 6 November 2006

   “A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects”

2. Raise the Wage? Federal Reserve Bank of Richmond (Econ Focus) · 27 February 2015

   “Neumark is quick to note, however, that "most of the evidence says there are disemployment effects" and that claiming the evidence is all over the map is misleading.”

3. Raise the Wage? Federal Reserve Bank of Richmond (Econ Focus) · 27 February 2015

   “employment effects [of minimum-wage increases] are too modest to have meaningful consequences for public policy in the dynamically changing U.S. labor market," according to the book's website.”

4. People Versus Machines: The Impact of Minimum Wages on Automatable Jobs NBER (Working Paper 23667; authors Grace Lordan and David Neumark) · 14 August 2017

   “Based on CPS data from 1980-2015, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers,”

Reasoning

E1, the Neumark and Wascher review, finds that a sizable majority of studies, and almost all of those it rates most credible, point to negative employment effects of minimum wages. E2 quotes Neumark as saying most of the evidence shows disemployment effects. E3 quotes a book's website as saying the employment effects are too modest to have meaningful consequences for public policy. That is a modest effect rather than no effect, which matches the 'mostly true' criterion of broad support with small effects. E4 points the same way on automation, but it was published in August 2017, a month after the claim, so it carries little weight here.

Cite this claim

Nassim Taleb, “Taleb said he believes a minimum wage is definitely a cause of more unemployment, more use of robots, or jobs moving to places with lower wages.” (said 10 July 2017). Verdict: mostly true. Reliability API, claim c_1b20e2dedde5, method 0.1.0+28da144b. https://epistacklabs.com/claims/c_1b20e2dedde5