Debunking QSR Minimum Wage BS: A Follow Up


@TBPInvictus here

A few days ago, Barry and I detailed how unscrupulous bad actors had taken Not Seasonally Adjusted data to falsely claim that California’s new $20/hour minimum wage had cost the state almost 10,000 quick-serve restaurant (QSR) jobs.

I wrote:

It appears to me that the Journal got that number from BLS. However, BLS only offers the series without seasonal adjustment; this makes a very meaningful difference.

Barry added:

There are two bad players here: The partisans who know they are abusing the data, and the naive journos being taken advantage of whose editors are too innumerate to understand even basic modeling issues like seasonal adjustments.

Best practices when using data with a high degree of seasonality is to use Year-over-Year basis (NSA) for your comparison. This removes the seasonality factor.

Pulitzer Prize winning LA Times columnist Michael Hiltzik picked up on the issue, and did a masterful job explaining the complexities in layman’s terms. His headline is classic:

The fast-food industry claims the California minimum wage law is costing jobs. Its numbers are fake.

Theheart of the column is the acknowledgment and recantation from one of the key sources of the misinformation, Professor Lee Ohanian. Ohanian wrote to Hiltzik:

Ohanian acknowledged by email that “if the data are not seasonally adjusted, then no conclusions can be drawn from those data regarding AB 1228,” the minimum wage law.

Barry adds:

Two things to add to this discussion:

It’s yet another reminder that investors must always be on guard for nonsensical claims from partisans who have zero concern for your portfolio. They are playing a different game, and you are collateral damage.

And second, always recall what Joan Robinson taught us so long ago:

“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.”



The fast-food industry claims the California minimum wage law is costing jobs. Its numbers are fake.
by Michael Hiltzik
L.A. Times, June 12, 2024

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