On what basis does Efficient Group economist Dawie Roodt claim specialised knowledge of the national minimum wage?
We read with pleasure Eusebius McKaiser’s column Left-leaning economists must stop hiding and challenge peddled misconceptions. The bulk of the article takes a carving knife to the myths peddled by right-wing economists over the proposed national minimum wage.
McKaiser rightly notes that many workers face a structural power imbalance in which their wages are dictated to them by profit-maximising employers and that labour market regulation is essential to ensure some level of fair distribution of economic gains.
He also correctly notes that the country is not characterised by a conflict between the employed and unemployed – a favourite trope of free marketeers – and that in poor families income is shared with all household members.
We agree with McKaiser’s other point that right-wing economists get a disproportionate amount of airtime.
Unfortunately he picked a poor example in the national minimum wage. (We were invited and agreed to participate in his Monday morning show on the topic, but were then not called.)
A Google search reveals that among economists commenting on the national minimum wage the single most prominent voice has been researchers from the National Minimum Wage Research Initiative at the University of the Witwatersrand (which we lead) and the various international experts brought to South Africa by the initiative.
The initiative is run by what McKaiser calls “left-leaning” economists. The evidence – as detailed exhaustively by the initiative – unequivocally supports the introduction of a progressive, carefully designed, national minimum wage.
Unfortunately, right-wing economists speaking (sometimes speculating) on the issue, often without offering a shred of evidence (the recent article in the Daily Maverick by Frans Cronje of the South African Institute of Race Relations comes to mind), still have strength in numbers.
McKaiser’s mistaken impression of the relative weight of coverage of this issue does not undermine his general contention.
We do need to question why left-leaning economists voices are not heard as often as their conservative colleagues. But this is not primarily because they have taken a “vow of silence on crucial political economy debates”, as McKaiser suggests.
The media, as McKaiser acknowledges, bears some responsibility. It has been a pleasure to be interviewed by some superb journalists and presenters, but it’s also clear that some journalists just want a sound bite and they’ll take it from whoever is shouting loudest.
Even when journalists do attempt to present a multiplicity of voices there is not necessarily an interrogation of the credibility with which particular experts speak on a given subject. On what basis does Efficient Group’s economist Dawie Roodt (fingered in McKaiser’s article) claim any specialised knowledge of the national minimum wage?
Like climate change, labour markets are a serious matter on which competing perspectives must be considered. As with climate change, it is problematic (dangerous actually) to look simply for “opposing views” without interrogating their scientific legitimacy.
Greater care should be taken in assessing the rigour of the competing content. It has been frustrating (depressing in fact) – after having researched this issue for two years, produced two reports, six working papers and seven policy briefs, while working with countless international experts – to be quoted alongside the likes of Leon Louw from the Free Market Foundation.
During a debate with us Louw misrepresented the evidence and, when called out on this, referred to studies we cited as “econometric masturbation”. He asked the audience to take his word for the fact that contrary evidence existed without ever producing such. (The video is online.)
This situation is not only the fault of the individual journalist or producer. The media needs to be more economically literate, including understanding the difference between different schools of economic thought and their political implications.
This is difficult to achieve on the job, especially given the tight deadlines and fickle news cycle, and so must be the responsibility of educational institutions. At the same time senior producers and editors should carve out time for their staff to hone such knowledge.
We also need to understand that there really are so few progressive economists around. University economics degrees overwhelmingly drill our students in (frankly problematic) conceptions of the economy that are: individualistic; divorced from political economy considerations of class and power; and strongly biased against the role of the state and regulatory interventions (not to mention trade unions) and towards free-market conclusions.
The training is often methodologically narrow, focusing on mathematical technical skills. These can be put to good use but can also devolve into meaningless exercises in which the relationship between economic variables is measured without any contextual analysis. The combination of these factors can devolve into mathematical modelling that bears no relation to reality.
This is a global problem, and post the financial crisis a worldwide movement of students demanding a more pluralist economics education, as well as calling for broader societal engagement with economic questions, has arisen. This movement has interesting synergies with South African students legitimately demanding more “decolonised” curricula.
We are lucky at Wits to have university leadership who actively support progressive economics research and teaching, as well as colleagues open to pluralist approaches. There are also other centres of excellence at other institutions.
But, on the whole, if we want to have progressive economic voices out there – and our country desperately needs this – then we need to do a better job at prioritising the education of such. We also need to continue to support progressive economic research.
Progressive policy debate in the media requires more journalistic rigour, the opening up of spaces for left-leaning scholars, the willingness of the latter to step up to the plate, and the active broadening of economics education and research.
Gilad Isaacs is the co-ordinator of the National Minimum Wage Research Initiative and Nicolas Pons-Vignon is a senior research at the Corporate Strategy and Industrial Development programme at Wits University’s School of Economics and Business Sciences Development.