I suppose that fits with the standard supply and demand curves.

Might be due to the free food.

Models are almost always incomplete representations of the world, but they still provide a lot of valuable information by helping us to interpret what we observe. All I’m saying is that information you don’t filter through your model can still be useful. That doesn’t mean you should throw away scientific results because they disagree with your prior beliefs!

So Dillow is saying that the long queue at the Auckland City Mission this morning, waiting for food parcels, is partly caused by the existence of the minimum wage?

I guess a survey of the queue would answer the question as to how many are the working poor already earning the minimum wage, or above.

No, I hadn’t read that but it’s interesting, thanks. With the Wren-Lewis quote I was aiming more for the general point that incomplete models are difficult to use well when you need to make a policy decision. I sometimes think practitioners are too quick to cast aside models in favour of slogans, but we need to be equally careful of excluding knowledge that hasn’t been integrated into the model. It’s a tricky balance to strike.

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2012/10/support-the-undeserving-poor.html

I think this is one of the reasons Dillow typically comes down against minimum wage laws – the harms of unemployment are greater than the gains from slightly increased wages.