Let’s pretend that supply and demand graphs actually do show that minimum wage is bad for the worker. (which they actually don’t, since labor graphs are a thing, and there are microecon supply and demand models that show minimum wage does not increase unemployment).
Even so, that doesn’t mean shit, because IT’S BASED ON A MODEL WITH FAULTY PREMISES. Economists KNOW the models are faulty, they’re trying to guess what’s going on in markets. The whole point of econ, is you use a bunch of models, each of which sacrifices accuracy in order to try to understand something about how markets and capitalism and shit works. You can’t just take a model, and say “this model shows that the minimum wage increases unemployment” and say that it’s a global fact, cause it’s not. That’s literally not how econ works. It’s the OPPOSITE of how econ works.
I like the argument that Mike Konczal makes here, that the order in which economics has been taught since the 14th edition of the standard introductory textbook, Paul Samuelson’s Economics, came out in 1992, is one of the reasons people think like this. Recognizing the triumph of capitalism over communism in the Cold War, they moved all the microeconomic stories of individual actors in markets that always clear and have perfect competition to the beginning, and add in various types of market failure, eventually moving on to macroeconomics and trying to build a picture of the whole economy from the pieces.
Teaching things in this order encourages thinking about the micro effects, the supply and demand curves and all that, as being more fundamental than the macro effects, and heaven forbid we start to ponder the basic fairness of the underlying system of capitalism in which this all occurs. Way back when, they used to call it the study of political economy because it was taught with a mind to exploring these questions. Putting macro first, or perhaps even putting an explanation of different theories of economic justice first, would lessen the effect of having the people think that the economy is simply a collection of individual textbook examples multiplied like several billion times.
It’s like trying to learn forest management by looking at isolated trees. Potted, isolated trees kept in the greenhouse and well-maintained. and then there’s a fucking forest fire that people used to know how to prevent and fight, but that lesson is covered briefly at the end of year two, and all our forest managers sound more like a goddam Rush song mouthing ridiculous Randian platitudes than anyone who knows about forest fires.
As for what I’d really like to see, I think it would be along the lines of what Peter C. over at Heteconomist lays out here. Follow Michał Kalecki (long-time followers of this blog probably saw that coming) in starting from basic accounting identities (which are true by definition) of the economy as a whole, and derive useful macroeconomic formulas from there, noting carefully what simplifying assumptions you’re making along the way. I think that’s a fundamentally superior approach to actually getting students to think usefully about economic policy questions.
Because the way it is right now, you get all sorts of people who complain along the lines of: “if you had taken Economics 101 you’d know why it’s a bad idea to raise the minimum wage.” Because all the reasons that the theory doesn’t necessarily describe the real world are all in Economics 102. So do them the other way.