State and federal-mandated minimum wages set a floor for what employers can pay their employees. It benefits more than the minimum wage workers because it raises wages up the line. Hence it is should be no surprise that the capitalist class and its supporters hate raises in the mandated minimum wage and try to do everything in their power to keep them from being raised because it lowers their ability to exploit workers and increase their profits. In their mind, the there should be no mandated minimum wage and all wages should be set by the employer and the employee, negotiating freely. Of course they oppose unions as well since those too interfere in the glorious working of the free-market. In this world view, a single employee and a company or massive corporation are equally matched powers and thus the figure they arrive at would reflect the true market value of labor.

Of course this is a fantasy indulged by the capitalist class and has no basis in reality. There is a massive power discrepancy between employer and employee and you need the federal and state governments and unions to at least partially redress that imbalance.

The federal minimum wage is pathetically low ($7.25/hour which works out to only about $15,000 per year for a full time worker doing 40 hours/week) and does not rise with inflation. It is state minimum wages that tend to be more beneficial to workers, though not for all states. California in particular has a relatively high minimum wage ($16.50/hour starting in 2025, second only to Washington DC which pays $17.50/hour) and it is $20/hour for fast food workers, all thanks to voters passing the changes at election time.

Since it is the largest state in the country and tends to set trends, opponents of higher minimum wages have targeted the state with lies about the negative effects of raising the minimum wage, using their usual strategy of ‘research papers’ put out right wing ‘think tanks’ written by ‘academics’ who are only too willing to misuse data in order arrive at conclusions that are acceptable to their paymasters. The ideas it pushes are that raising the minimum wage causes job losses and harms the overall economy. The ‘think tank’ then uses its many contacts in the media to push these supposed ‘research results’ of the negative consequences of raising the minimum wage to the compliant major media and thus create the public mindset that raising minimum wages is a bad thing.

Ka (Jessica) Burbank at Drop Site exposes one set of fake conclusions, that were in papers put out by Lee Ohanian, an economist at UCLA and senior fellow at The Hoover Institution, a right-wing think tank that operates on the Stanford University campus and is headed by Condoleeza Rice.

In September 2023, California passed a law to bring fast food workers’ minimum wage up from $16 to $20 an hour. A flurry of reports predictably followed from the likes of The Wall Street Journal, Employment Policies Institute, and the Hoover Institution claiming that restaurants and other businesses were already laying off workers based on the new law.

The Hoover Institution, a think tank with $879.8 million in total assets, continued to dig in against AB 1228, publishing multiple articles over the past year attempting to pin “lost jobs” on rising wages. At the heart of the research are three major claims made by Lee Ohanian, an economist at UCLA and senior fellow at The Hoover Institution:

1. Government jobs account for 96.5% of job growth in California over 2.5 years,
2. California lost 410,000 jobs from February 2020-February 2024, and
3. California lost 10,000 jobs in the fast food sector since the minimum wage law was signed in September 2023.

All three claims are false, and the Hoover Institution has now had to retract six articles based on faulty research by Ohanian. The claims were first debunked by Invictus, an anonymous poster—using the same publicly available data that Ohanian used as source for his analysis. In reality,

1. Between January 2022 and June 2024, private-sector jobs accounted for the majority of job growth in California, at 77.8%
2. California did not lose any jobs between February 2020 and Feburary 2024; it actually gained 290,000 jobs
3. California’s fast food sector has seen consistent growth, both in terms of jobs and the total number of establishments, outpacing national averages.

…

Long before AB 1228 was introduced, the Hoover Institution regularly published articles insisting minimum wage increases cause job losses. And for years, Ohanian, who is also on the board of America First Policy, has been at the forefront of the narrative insisting minimum wage increases cause job losses in California, dating back to his 2008 article, “The Implications Of a Minimum Wage.” In 2019 he wrote, “Minimum Wage Laws Hurt Those They Claim to Help” and in 2022, “New California Law Will Cripple Its $20 Billion Fast-Food Industry.” While analysis shows that the fast-food industry growth in California has outpaced the rest of the country, Ohanian’s articles over the past year have attempted to argue the opposite, based on mixing apples and oranges of datasets.

Iy is interesting that these bogus claims were first debunked by an anonymous blogger named Invictus using the same data that Ohanian claims to have used.

In its 2024 fiscal year, “total operating expenditures were $113.1 million,” at The Hoover Institution. “Compensation for scholars and staff represents the largest portion of the operating budget, accounting for more than 70 percent of total expenses,” they noted in their annual report.

Drop Site News asked Invictus how much money is behind his operation, “As for my compensation, it has a lot of zeros in it. In fact, every number is a zero. It’s nil.” Invictus, who is known for debunking the claim that over 1 million jobs were added in a month under Reagan, sees himself as a kind of David to the goliath of conservative economic lobbyists. He regularly publishes analysis for The Big Picture, a finance blog run by Wealth Manager Barry Ritholtz, and his work has led to corrections being issued on analysis published by The Washington Post.

“I do it because the truth still matters to me and I believe there’s a tendency–much more on one side than the other–to see what misinformation can be successfully peddled without consequences or accountability,” said Invictus.

Indeed, looking at the repeated mistakes by Ohanian in detail, it appears the Hoover Institution is dedicated to publishing analyses that support its ideological goals, regardless of their integrity. Neither the Hoover Institution nor Ohanian replied to a request for comment.

As Ritholz writes:

Ohanian is either a competent bad actor or an extremely incompetent economist. I’m not sure which.

Either way, there is an echo chamber in the social media world waiting with bated breath for news it can use, truth be damned. That “a lie can travel halfway around the world while the truth is putting on its shoes” has never been more true than it is today. And it’s a massive, massive problem. We see this with low-information voters, people who believe the stock market is not at all-time highs, that the unemployment rate is higher than it is, or that inflation is still high (prices are high, inflation is low). Misinformation is a problem so large it effects national elections.

I expect better from places like the Hoover Institute, and academic centers like Stanford and UCLA. Same about the Rip & Read media that blindly parrots faulty and dumb analysis.

Joan Robinson understood this nearly a century 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.”

Unlike Ritholz, I do not expect better from Hoover and Stanford and UCLA and the mainstream media. They have always fought against the interests of the poor and working class and in favor of the oligarchs. That is what they do and how they get money.