HispanicPundit + minimum-wage   215

Daron Acemoglu on Shared Prosperity and Good Jobs - Econlib
MIT economist gives the progressive defense of wage stagnation and the possible solutions. Minimum wage at the ~58min mark.
wages  Inequality  econtalk  Acemoglu  minimum-wage 
5 weeks ago by HispanicPundit
Democrats Are More Anti-Immigrant Than Republicans - Bloomberg
There are striking parallels between the philosophies of Trump and NIMBY urbanists. Trump asserts that America is “full” and so wants to restrict the flow of immigrants. The urbanists, who tend to be Democratic and highly educated, assert that their cities are too crowded and so want to restrict the supply of housing. The cultural valence of the two views is quite different, but the practical implications have a lot in common — namely, a harder set of conditions for potential low-skilled migrants to the U.S.

Note that most cities in “Red America,” especially those in Texas, have fewer building restrictions than San Francisco or Los Angeles. These red cities and counties, and by extension states, are relatively pro-immigration in this regard.
Immigration  minimum-wage  rent-control  Democrats  Republicans  Cowen 
june 2019 by HispanicPundit
Bloggingheads.tv - Father and Son - Loury vs Loury
Covering the basics. Basically the son is a typical leftwing socialist who sees religion as racist.
gay-marriage  Socialism  minimum-wage  Race  loury  bloggingheads 
february 2019 by HispanicPundit
Pass-through of minimum wages into U.S. retail prices - Marginal REVOLUTION
We study the impact of increases in local minimum wages on the dynamics of prices in local grocery stores in the US during the 2001-2012 period. We find a signifi cant impact of increasing minimum wages on prices in grocery stores. Our baseline estimate of the minimum wage elasticity of grocery prices is 0.02. This magnitude is consistent with a full pass-through of cost increases into prices. We show that price adjustments occur mostly in the months following the passage of minimum wage legislation rather than at the actual implementation of higher minimum wages. This forward-looking pattern of price adjustments is qualitatively consistent with pricing models that feature nominal rigidities. We fi nd no differential price effect for products consumed by poorer and richer households, and no evidence for demand effects. Our results suggest that consumers rather than firms bear the cost of minimum wage increases. Moreover, poor households are most negatively affected by the price response. Price increases in grocery stores alone offset at least 10% of the nominal income gains of the poorest households.
minimum-wage  cowen  NBER 
december 2017 by HispanicPundit
Gentry Liberalism in San Francisco - The American Interest
While a restaurant’s Yelp rating doesn’t correlate directly with its price range, this differential effect suggests that it’s easier for rich people to ignore the deleterious effects of minimum wage hikes. Virtually all of the most expensive restaurants in San Francisco have four or more stars; the city’s business and professional elite are unlikely to see many of their favorite high-end destinations pushed out of the city. Poor or middle-income workers are less likely to have the luxury of only frequenting top-rated establishments, not to mention that they are more likely to work at the restaurants that the hikes put out of business.
minimum-wage  AmericanInterest 
april 2017 by HispanicPundit
CONVERSABLE ECONOMIST: Characteristics of US Minimum Wage Workers
On the characteristics of those who make up the minimum wage: 2.7% of the population, mostly young, and mostly in restaurant/service industry (where tips are also part of the picture).
minimum-wage  timtaylor 
april 2017 by HispanicPundit
Deirdre McCloskey on the Unsavory History of the Minimum Wage - Cafe Hayek
 These early advocates of the minimum wage correctly understood not only that the minimum wage destroys jobs for some low-skilled workers, but also that the low-skilled workers most likely to suffer the consequent job losses are those who are held in lowest esteem by their fellow human beings.
minimum-wage  history  racism  video  boudreaux 
march 2017 by HispanicPundit
The Humanity of McDonald's, David Henderson | EconLog | Library of Economics and Liberty
McDonald's. And according to my landlady "McDonald's saved him." Why? Oh, they're unbelievable, she said. They are very used to dealing with people like my son. They have all kinds of systems for helping people who lack good work habits become productive. For instance, they start calling you hours before your morning shift to ensure that you are awake and getting ready for work. My son really needed that, she said. In McDonalds he learned that work guidelines have a purpose and he acquired confidence. He is no longer passive now. He has a much better job, a fiancee, and a future.
mcdonalds  minimum-wage  henderson 
january 2017 by HispanicPundit
Some Evidence on Competition in Labor Markets - Cafe Hayek
China has over a billion workers, tremendous poverty and no trade unions, so if there’s one place on this planet you’d expect workers to earn minimum-wage it’s China.

Yet we had to pay 40% over minimum wage to attract even the lowest unskilled workers, such is the demand for labor.
unions  China  minimum-wage  wages  labor  boudreaux 
january 2017 by HispanicPundit
Orange Rocks and the Minimum Wage, Bryan Caplan | EconLog | Library of Economics and Liberty
And so it is with minimum-wage legislation.  The strong political and ideological interests on the pro-minimum-wage side keep alive the debate over whether or not raising employers' costs of employing low-skilled workers causes employers to further economize on the amounts of low-skilled labor that they hire.  There is no furious empirical debate among scholars over whether or not, say, raising an excise tax on oranges would, ceteris paribus, cause fewer oranges to be bought and sold.  There is no furious empirical debate among scholars over whether or not, say, an increase in the tuition charged to attend college would, ceteris paribus, discourage some people from enrolling in college.  There is no furious empirical debate among scholars over whether or not, say, imposing a poll tax would, ceteris paribus, discourage some people from voting.
minimum-wage  boudreaux  caplan 
december 2016 by HispanicPundit
Some Additional Questions for Proponents of Minimum-Wage Legislation - Cafe Hayek
That is, the unemployment rate of black teenagers in 1948 was comparable to that of white teenagers, and about 2.5 times higher than the overall unemployment rate of 3.8%.  Today, the unemployment rate for black teenagers is much higher than that for white teenagers, and nearly 5 times higher than the overall unemployment rate of 7.3%.  (In 2006, the year before the current recession began, the unemployment rate for black teenagers was 6.3 times higher than the overall unemployment rate of 4.6%.)

How do you explain these data?  Are American employers more prejudiced in 2013 than in 1948 against teenagers?  More importantly, are Americans more racist in 2013 than they were in 1948?
minimum-wage  blacks  history  racism  boudreaux  williams 
december 2016 by HispanicPundit
Low-skilled labor markets are not about bargaining power - Marginal REVOLUTION
More generally, he finds that “…the employment and wage rates of low experience, low education individuals deteriorated more dramatically during the Great Recession than is widely recognized.”  There are many points of interest in this paper, one of my favorite of this year.  Here is the home page of Jeffrey Clemens.
minimum-wage  jobs  cowen 
november 2016 by HispanicPundit
Why Dining Out Has Gotten So Expensive - The American Interest
The results of these costs are not happy ones for restauranteurs or for consumers. As the Times notes, the number of restaurants shrank in New York in 2015, and more and more of people’s dining out dollars are spent at deeper-pocketed chains. It’s very difficult to weather business cycles and adapt to changing tastes as an independent restaurateur. For consumers, the challenging environment means fewer and more expensive options.
minimum-wage  labor  AmericanInterest 
october 2016 by HispanicPundit
How much monopsony power is there? - Marginal REVOLUTION
…if big firms are bargaining down wages then why do labor economists consistently find a large firm wage premium? To take one example from many, one recent study on retailers found that after controlling for individual and store characteristics, firms with at least 1,000 employees pay 9% to 11% more than those employing 10 or fewer.

Third, if firms’ bargaining power over their employees is growing, then why are they increasingly contracting out for work? Lawrence Katz and Alan Krueger argue that from 2005 to 2015, the share of workers hired out through contract companies grew from 0.6% to 3.1%. A company with labor market power wouldn’t want to contract out work to another company. They’d want to hire workers directly to take advantage of that power.
minimum-wage  cowen 
october 2016 by HispanicPundit
The Cruelty of the Minimum Wage - Cafe Hayek
Great videos on the principles behind the minimum wage.
minimum-wage  videos 
october 2016 by HispanicPundit
Out of Prison, Out of Work - Bloomberg View
A single variable -- having a criminal record -- is a key missing piece in explaining why work rates and LFPRs [labor-force participation rates] have collapsed much more dramatically in America than other affluent Western societies over the past two generations. This single variable also helps explain why the collapse has been so much greater for American men than women and why it has been so much more dramatic for African American men and men with low educational attainment than for other prime-age men in the United States.
labor  prison  bloomberg  minimum-wage 
october 2016 by HispanicPundit
Another Question for Minimum-Wage Proponents Who Deny that this Policy Destroys Jobs - Cafe Hayek
These two arguments – monopsony and ‘efficiency wage’ – are the only two economic arguments in support of the claim that minimum wages destroy no jobs that are even remotely theoretically possible.  Every other seemingly ‘economic’ argument offered (almost always by non-economists) for minimum wages – such as, higher minimum wages increase aggregate demand so much that minimum wages pay for themselves – is so at odds with economic theory that virtually no economists, not even pro-minimum-wage economists, take such arguments seriously.
minimum-wage  boudreaux 
september 2016 by HispanicPundit
A Note On Minimum Wages and Output Prices - Cafe Hayek
Put differently, the reason firms’ output prices rise after the minimum wage is raised is that only after the minimum wage is raised do all of these firms have higher costs of production.  It’s this minimum-wage-induced rise in the production costs of all firms that employ minimum-wage workers that is responsible for the rise in output prices.
august 2016 by HispanicPundit
Will a higher minimum wage *reduce* automation? - Marginal REVOLUTION
Recent research emphasizes the pressure technological change exerts on middle-wage occupations by automating routine tasks. I argue that technology only partially automates these tasks, which often still require labor. Rather, technology reduces task complexity enabling a less skilled worker to do the same job. The costs of automation, then, are not only the costs of the technology itself but also of low-wage workers to use it. By raising the cost of low-wage labor, the minimum wage reduces the profitability of adopting automating technologies. I test this prediction with state variation in the minimum wage and industry variation in complementarity between low-wage workers and technology. I show that accounting for state price differences induces new and useful minimum wage variation, derive new measures of complementarity from the Dictionary of Occupational Titles and the CPS Computer Use Supplement, and build a measure of technology based on IT employment, the largest component of IT spending. My results imply a $1 decrease in the minimum wage raises the average industry’s technology use by 30% and decreases the routine share of the wage bill by 1 percentage point (3.3%), both relative to a counterfactual without complementarity. Routine-intensive industries often exhibit high complementarity, making the minimum wage an important policy lever to influence the pace of routine-biased technical change.
minimum-wage  technology  cowen 
august 2016 by HispanicPundit
The Immigration/Labor Demand Elasticity Puzzle, Bryan Caplan | EconLog | Library of Economics and Liberty
3. Native and foreign labor are distinct goods, so an increase in the supply of immigrant labor barely increases supply in the labor markets where most natives actually work.  In fact, native and foreign labor are generally complementary goods, so when the supply of immigration goes up, so does the demand for most native workers.  Implausible?  Check out the weighty evidence in its favor.
labor  minimum-wage  Immigration  caplan 
august 2016 by HispanicPundit
Labor Demand Elasticity: Boredom is Thoughtless, Bryan Caplan | EconLog | Library of Economics and Liberty
But if people actually cared about the effects of labor market regulation on worker and human well-being, labor demand elasticity would fascinate them.  An elasticity of -.25 implies that raising wages 4% permanently depresses employment by 1%.  Considering the misery of involuntary unemployment and our hedonic adaptation to mere money, how can any thoughtful person yawn?
minimum-wage  labor  caplan 
august 2016 by HispanicPundit
Uber Takes the Next Step - The American Interest
If you want to understand a big part of why Uber is pushing autonomous vehicles so aggressively, look no further than the effect they will have on labor costs. It will be harder to complain that the company isn’t paying health benefits for its drivers when Uber cars aren’t driven by anyone. No doubt, Uber CEO Travis Kalanick is looking forward to not having to worry about all the labor advocates trying to unionize his drivers.
labor  minimum-wage  technology  uber  AmericanInterest 
august 2016 by HispanicPundit
Obama's Overtime Rule Defies Econ 101 - Bloomberg View
We can almost certainly expect overtime to push base wages down. This is because companies will try to adjust base wages lower so that employees’ total compensation stays about the same. Of course, this isn't always possible -- wages are “sticky,” meaning that it’s easier to give people raises than pay cuts. But it will mean that employers will restrain base wages from growing as much as they otherwise would. Employees will be more willing to accept this than they otherwise would, since they know that they’ll get extra money from the overtime hours. In the long run, this means lower hourly earnings for workers, though weekly earnings won’t change as much, and could even increase.
overtime  minimum-wage  smith 
june 2016 by HispanicPundit
The Evidence Is Piling Up That Higher Minimum Wages Kill Jobs - Marginal REVOLUTION
Another recent study by Shanshan Liu and Thomas Hyclak of Lehigh University, and Krishna Regmi of Georgia College & State University most directly mimics the Dube et al. approach. But crucially it only uses as control areas parts of states that are classified by the Bureau of Economic Analysis as subject to the same economic shocks as the areas where minimum wages have increased. The resulting estimates point to job loss for the least-skilled workers studied, as do a number of other recent studies that address the Dube et al. criticisms. - See more at: http://marginalrevolution.com/marginalrevolution/2016/05/the-evidence-is-piling-up-that-higher-minimum-wages-kill-jobs.html#sthash.ISkfcdQo.dpuf
minimum-wage  minorities 
may 2016 by HispanicPundit
The Devastating $15 Minimum Wage: Don't "Experiment" on Non-Volunteers, David Henderson | EconLog | Library of Economics and Liberty
Playing with the March CPS [Current Population Survey], I find that a whopping 11% of young high school dropouts in California have a full time job. 85% of all high school dropouts in California are paid $15 an hour or less. Among young (under 30) high school dropouts, that number is 96%. Among *all* black and Hispanic respondents under 30 (irrespective of education), 90% are paid $15/hr or less.
minimum-wage  minorities 
april 2016 by HispanicPundit
The Cruelty of the Minimum Wage
The minimum wage yields unfair advantages to families, such as mine, with teenagers who hail from middle- and high-income households, who are well-educated, whose parents and other relatives have social and business connections, and who have their own personal means of transportation. These advantages come at the expense – cruelly so – of minority and inner-city teens, of low-skilled immigrants, and of other workers who are poorly advantaged yet who, in most cases, need employment more than do those advantaged workers who manage to find jobs at the higher, minimum wage.
minimum-wage  minorities  video  boudreaux 
january 2016 by HispanicPundit
St. Louis's mayor wants a $15 minimum wage. That’s probably way too high. - Vox
If you're interested in credible, economically rigorous work that's favorable to a higher minimum wage, you want to turn to Arindrajit Dube of the University of Massachusetts. And his conclusion is that the right spot for a minimum wage is at around half the median wage, about where it was in the US in the 1960s and around the current international average for developed countries.
minimum-wage  yglesias 
june 2015 by HispanicPundit
Krugman, Labor Unions, and Employment
This graph (which you can click on to enlarge) is from this recent blog post by Adam Ozimek. (HT Tyler Cowen) (See also this earlier, related post by Adam.) While not proof positive – few such proofs are available in any science whose subject matter is empirical reality – these data are strong evidence in support of the standard economics conclusion that artificially raising firms’ costs of employing some kinds of workers causes firms over time to employ fewer such workers than they would otherwise have employed.
unions  jobs  minimum-wage  krugman  graphs  boudreaux 
april 2015 by HispanicPundit
How effective is the minimum wage at supporting the poor?
This study investigated the antipoverty efficacy of minimum wage policies. Proponents of these policies contend that employment impacts are negligible and suggest that consumers pay for higher labor costs through imperceptible increases in goods prices. Adopting this empirical scenario, the analysis demonstrates that an increase in the national minimum wage produces a value-added tax effect on consumer prices that is more regressive than a typical state sales tax and allocates benefits as higher earnings nearly evenly across the income distribution. These income-transfer outcomes sharply contradict portraying an increase in the minimum wage as an antipoverty initiative. - See more at: http://marginalrevolution.com/marginalrevolution/2015/03/how-effective-is-the-minimum-wage-at-supporting-the-poor.html#sthash.VaqZEsc6.dpuf
minimum-wage  poverty  tabarrok 
april 2015 by HispanicPundit
The minimum wage and youth unemployment across the European Union | Utopia - you are standing in it!
European nations with the highest minimum wages have unemployment rates that are twice as high, on average, as those with no minimum wages. Especially hard hit by minimum wages is youth employment, which averages more than 25% in these countries. Compare this to those countries in Europe with no federally mandated minimum wages. Most instead have wages that are privately negotiated between workers, unions, and employers. It's an infinitely better system than a one-size-fits-all federal minimum wage. Wages are determined by workers and companies, raised when both parties agree, applied to specific jobs, and do not apply to the whole country. In other words, they are market wages.
minimum-wage  Europe 
april 2015 by HispanicPundit
Making Low-Skilled Workers Illegal
It’s actually quite cowardly of you to avoid acting in meaningful ways with your own skin in the game while you instead advocate legislation that you admit will result in the involuntary unemployment of multitudes of the lowest-skilled workers if your assumption of monopsony power is wrong. Minimum-wage advocates such as yourself play, at no cost to yourselves, with the livelihoods of countless strangers, most of whom can ill-afford being guinea pigs for your untenable academic rationalizations of a policy whose history reveals that its true purpose is indeed to price certain employees out of jobs.
minimum-wage  boudreaux 
december 2014 by HispanicPundit
CONVERSABLE ECONOMIST: International Minimum Wage Comparisons
However, I will note for US readers that the international comparisons here can give aid and comfort to both sides of the minimum wage argument in this country. Those who would like the minimum wage raised higher can point to the fact that the U.S. level remains relatively low compared to other countries. Those who would prefer not to raise the minimum wage higher can take comfort in the fact that, even after the minimum wage increased signed into law by President Bush in May 2007 and then phased in through 2009, the U.S. minimum wage relative to average or median wages remains comparatively low.
minimum-wage  world  timtaylor 
august 2014 by HispanicPundit
CONVERSABLE ECONOMIST: Characteristics of U.S. Minimum Wage Workers
What's the breakdown of those being paid the minimum wage by age? In particular, how many are teenagers or in their early 20s? Of the 3.3 million minimum-wage workers in 2013, about one-quarter were between the ages of 16-19, another one-quarter were between the ages of 20-24, and half were over the age of 25. What's the breakdown of those being paid the minimum wage by full-time and part-time work status? Of the 3.3 million minimum-wage workers in 2013, 1.2 million were full-time, and 2.1 million were part-time--that is, roughly two-thirds of minimum-wage workers are part-time.
minimum-wage  timtaylor 
august 2014 by HispanicPundit
TheMoneyIllusion » A few thoughts on Seattle
Perhaps low wage firms move across the border to the suburbs. Seattle itself has only 634,000 people in a metro area of 3.5 million. Perhaps low wage workers move out with the jobs, as the city itself gentrifies. For remaining low wage jobs in Seattle, unskilled Hispanic workers are replaced with college-educated millennials. The Hispanics move elsewhere.
minimum-wage  jobs  sumner 
june 2014 by HispanicPundit
Seattle raising its minimum wage to $15: It's history in the making.
Internationally, no country has an official minimum above the $11 mark once you adjust for purchasing power, according to the Organization for Economic Co-operation and Development.** It’s often reported that fast food workers in Denmark can earn $20 per hour thanks to their strong labor unions. But take into account the nation’s eye-popping cost of living, and their wages are closer to $13.*
minimum-wage  yglesias  world  europe 
june 2014 by HispanicPundit
Are the minimum wage and EITC complements? And if so, when?
Even if you accept every premise of this argument, I am not sure how it is supposed to apply today, at least within a Keynesian framework. For the Keynesians, the employment problem today is almost purely one of demand, not labor supply. To spur more hiring, we therefore should wish the employers to capture more of the surplus. A belief in hysteresis makes it all the more compelling simply to get potential workers into a job as soon as possible. So a higher minimum wage and wage subsidies might be complements at some time period, but they should not be effective complements today. Furthermore, if demand problems are going to be with us for a long time (not my view), a higher minimum wage and wage subsidies might not be complements anytime soon.
minimum-wage  EITC  cowen 
march 2014 by HispanicPundit
The Minimum Wage vs. Welfare: Band-Aid or Salt?, Bryan Caplan | EconLog | Library of Economics and Liberty
The lesson: When the minimum wage causes involuntary unemployment, raising welfare can serve as a band-aid for the labor market. Workers deprived of the right to provide for themselves can subsist on government money. Yet when welfare convinces people to abandon honest toil, raising the minimum wage is no band-aid. Instead, raising the minimum wage salts the wounds. The reason, to repeat: While a higher minimum wage does indeed make workers more eager to work, it also automatically makes employers less eager to hire.
minimum-wage  welfare  wages  labor  caplan 
march 2014 by HispanicPundit
Are recessions a good time to boost the minimum wage?
Now let’s say the economy is in a demand-driven downturn, which creates a surplus in the labor market. Now, to get more workers, the monopsonist firm does not have to raise the wage and it can get more workers at the prevailing wage. But employers just don’t want more workers, because of demand-side constraints. So employers could in fact hire more workers without pushing up wage rates at all, once again that is for all units of labor of a particular quality. Yes there is still monopsony, but the potential wage effects of hiring more labor are muted by the labor surplus. And that means boosting the minimum wage won’t create the beneficial hiring effects which operate in the more traditional monopsony scenario, explained in the paragraph directly above. In other words, if you think we are now seeing a slow labor market for demand-side reasons, you should be skeptical of the monopsony argument for minimum wage hikes, at least for the time being.
minimum-wage  cowen 
january 2014 by HispanicPundit
Neumark and Wascher on minimum wages and youth unemployment
The average minimum wage effects we estimate using this sample are consistent with the view that minimum wages cause employment losses among youths. However, the evidence also suggests that the employment effects of minimum wages vary considerably across countries. In particular, disemployment effects of minimum wages appear to be smaller in countries that have subminimum wage provisions for youths. Regarding other labor market policies and institutions, we find that more restrictive labor standards and higher union coverage strengthen the disemployment effects of minimum wages, while employment protection laws and active labor market policies designed to bring unemployed individuals into the work force help to offset these effects. Overall, the disemployment effects of minimum wages are strongest in the countries with the least regulated labor markets.
minimum-wage  neumark  labor 
january 2014 by HispanicPundit
Minimum Wage Increase Will Reduce Poverty Even Less than I Thought, David Henderson | EconLog | Library of Economics and Liberty
The minimum wage takes from the (mostly) relatively poor people who buy a lot of fast food and gives to the (mostly) relatively poor people who serve it. When I go into McDonald's in the morning, most of the customers strike me as less well off than the nice lady who serves me my Egg McMuffin.
minimum-wage  henderson 
january 2014 by HispanicPundit
Teen employment and the minimum wage: sixty years of experience
Kevin concludes: “Is there any other issue where the data conforms so strongly to basic economic intuition, and yet is widely written off as a coincidence?”
minimum-wage  cowen  graphs 
january 2014 by HispanicPundit
ECONJEFF: Economists for a higher minimum wage
Even more oddly, the research summary fails to distinguish between employment effects in the short-run, which can be estimated using compelling partial equilibrium identification strategies, and employment effects in the long-run, which generally cannot. Unfortunately, the compelling evidence we have about low short-run employment effects is largely irrelevant to policy, which should concern itself with long-run effects. My favorite minimum wage paper shows that small short-run effects are quite consistent with large long-run effects.
minimum-wage  jeffsmith 
january 2014 by HispanicPundit
The Mythology of the Minimum Wage | Douglas Holtz-Eakin
Who exactly does the minimum wage help? Those who need help the least. According to Current Population Survey data, 80 percent of minimum wage earners are not in poverty. In addition, teens and young adults make up 46.3 percent of all minimum wage earners. Unfortunately, for those who still live with their parents (more than one-third of all minimum wage earners), their average family incomes are over $100,000. It's hard to see how increasing the minimum wage would combat income inequality when close to half of the beneficiaries are in the top 20 percent of earners.
minimum-wage  Holtz-Eakin 
december 2013 by HispanicPundit
The Minimum Wage Ain't What It Used to Be - NYTimes.com
So suggesting that federal policy addressing low-wage work and low-income families has somehow failed because the minimum wage has not kept pace with inflation ignores the fact that we have moved away from a focus on the minimum wage — a policy with many flaws — and toward the earned-income tax credit. We shouldn’t be asking simply how much the real minimum wage has changed, but rather how much the combined income floor generated by the two policies has changed.
minimum-wage  EITC  neumark  economix 
december 2013 by HispanicPundit
A Bit of Nuance on the Minimum Wage | Jared Bernstein | On the Economy
But what do I mean by “moderate?” This is Holzer’s other concern: he worries that some of the recent proposals are “immoderate,” i.e., high enough to trigger unintended consequences that could change the favorable benefit/cost equation of the increases we’ve implemented thus far. He may have a point. Historically, increases in the minimum have affected less than 10% of the workforce and that has led me to define “moderate” as raises that have a sweep of this magnitude or less. But some recent proposals have come in above this historically safe benchmark, and Harry is correct to raise an eyebrow.
minimum-wage  bernstein  EITC 
december 2013 by HispanicPundit
Who makes minimum wage? | Pew Research Center
People at or below the federal minimum are: Disproportionately young: 50.6% are ages 16 to 24; 24% are teenagers (ages 16 to 19). Mostly (78%) white; fully half are white women. Largely part-time workers (64% of the total).
minimum-wage  labor 
december 2013 by HispanicPundit
Some Questions for Minimum-Wage Proponents
- Suppose (not unreasonably) that poor people are disproportionately likely, compared to wealthier people, to own high-mileage used cars produced, say, between 1989 and 1995. And assume that the average price at which poor people sell each of these cars (when, say, they want to buy newer cars, or when they choose to rely more heavily upon public transportation) is $3,000. Do you support minimum-used-car-price legislation that prohibits the sale of any car at a price of less than $5,000? Do you believe that such legislation would make poor people richer? Would your answer change if the legislated minimum price for cars is $3,250 rather than $5,000? (I proposed a similar thought experiment back in June 2006.)
minimum-wage  fundamentals  boudreaux 
december 2013 by HispanicPundit
Do-It-Yourself vs. the Minimum Wage, Bryan Caplan | EconLog | Library of Economics and Liberty
There is indeed one reason to expect labor demand to be more elastic for manufacturing than services. However, there is another equally compelling reason to expect the opposite: do-it-yourself. In a modern economy, higher manufacturing costs rarely lead consumers to make their own electronics, clothes, or furniture. The fall in quality would be too steep. But higher service costs frequently lead consumers to cook their own meals, mow their own grass, or clean their own homes. The quality's lower, but still quite tolerable.
minimum-wage  manufacturing  unz  caplan 
december 2013 by HispanicPundit
Greg Mankiw's Blog: Minimum Wage Redux
"new evidence based on methods that let the data identify the appropriate control groups leads to stronger evidence of disemployment effects, with teen employment elasticities near −0.3. We conclude that the evidence still shows that minimum wages pose a tradeoff of higher wages for some against job losses for others, and that policymakers need to bear this tradeoff in mind when making decisions about increasing the minimum wage."
minimum-wage  mankiw  neumark 
december 2013 by HispanicPundit
Phase-In: A Demagogic Theory of the Minimum Wage, Bryan Caplan | EconLog | Library of Economics and Liberty
If the minimum wage unexpectedly jumped to $12 today, the effect on employment, though relatively small, would be blatant. Employers would wake up with a bunch of unprofitable workers on their hands. Over the next month or two, we would blame virtually all low-skilled lay-offs on the minimum wage hike - and we'd probably be right to do so. If everyone knew the minimum wage was going to be $12 in 2015, however, even a large effect on employment could be virtually invisible. Employers wouldn't need to lay any workers off. They could get to their new optimum via reduced hiring and attrition. When the law finally kicked in, you might find zero extra layoffs, because employers saw the writing on the wall and quietly downsize their workforce in advance.
minimum-wage  caplan 
december 2013 by HispanicPundit
A Note on Bargaining Power
In addition to the fact that low-skilled workers have few specific job skills, another great – perhaps the single greatest – source of their bargaining power is price. If they can offer to work at whatever wages make them attractive to employers, they have bargaining power. The worker who is denied by government the right to offer to work at a lower wage than the one that politicians have divined is minimally acceptable loses bargaining power. That worker literally has no power to bargain on the wage margin. That worker is prevented by government from offering to employers “If you employ me, I’ll work for $7.00 per hour.” The absence of this bargaining power is caused directly by government regulation – and the fact that that regulation might today be well-intented does nothing to alter this awful reality for those workers who are prevented by the state from bargaining for employment by offering to work at hourly wages below the legislated minimum.
minimum-wage  labor  boudreaux 
november 2013 by HispanicPundit
Scott Sumner Has Some Data on Minimum-Wage Legislation
There are nine countries with no minimum wage (Iceland, Norway, Sweden, Finland, Denmark, Austria, Germany, Italy, Switzerland.) Five of the nine have a lower unemployment rate than Luxembourg, the best of the other group. The median country is Iceland, with a 5.5% unemployment rate. The biggest country in Europe is Germany. No minimum wage and 5.2% unemployment.
minimum-wage  germany  europe  sumner  boudreaux 
november 2013 by HispanicPundit
Walter Williams and Thomas Sowell on the Minimum Wage as Maximum Folly
The minimum-wage law has been, and continues to be, one of the most effective tools in the arsenal of racists everywhere around the world.
sowell  minimum-wage  williams  video 
october 2013 by HispanicPundit
The Grumpy Economist: McDonalds and the minimum wage
The cost is just as easy to forecast. McDonalds cuts hours, and uses its most experienced and efficient workers more, and fewer people like my hapless server. And they don't get the oh-so-needed on-the-job training. The biggest impact of minimum wages is not so much on existing workers, but on new workers entering the labor force. (See a nice new NBER working paper by Jonathan Meer and Jeremy West.) The effects fall heaviest on low-skill teenagers, especially minorities. Tom Sowell is eloquent on this point, for example in a recent New York Post OpEd. I was unaware until reading it that minimum wage laws were initially backed in part as conscious efforts to discriminate against minorities and preserve jobs for white people. Sometimes, I guess, policies do have their intended effects.
sowell  minimum-wage  cochrane  minorities 
september 2013 by HispanicPundit
Unemployment and the Minimum Wage
In sum, while the UK evidence is thinner due to statistical problems, the research overall points to the minimum wage reducing employment as conventional economic theory predicts. In other words, the minimum wage undermines employment for the least productive whilst raising wages for others. The research also suggests that the workers who benefit are the better-off: where there is high unemployment there is heightened competition for jobs, with the better connected workers rather than the poor finding them. Thus, Ahn et al.’s (2011) research shows that, as the minimum wage increases, there is a shift in employment towards teenagers in families with highly educated heads and away from poorer groups.
boudreaux  minimum-wage  England 
september 2013 by HispanicPundit
Fast-Food Strike Made Minimum Sense - Bloomberg
Correcting the misinformation on the minimum wage 'studies'.
mcardle  minimum-wage  bloomberg  sidebar 
august 2013 by HispanicPundit
Facts about the minimum wage
…the minimum wage is very much a bottom latter rung for the labor market, which you can see in Meer and West’s evidence that workers frequently transition out of the minimum wage. In their data 59% of workers who earn the minimum wage in one year earn more than it in the next year if they remain employed (5.8% are unemployed and 16.8% have left the labor force). The median wage increase they get is $0.90 per hour, which is a 23% raise. The 75th percentile raise is $2.45 per hour.
cowen  minimum-wage  sidebar 
august 2013 by HispanicPundit
ECONJEFF: Minimum wages in the short run and the long
With minimum wages, I think most of the story is about the substitution of capital for labor as in my favorite paper about the minimum wage.
mcardle  minimum-wage  sidebar  jeffsmith 
august 2013 by HispanicPundit
National Low Income Housing Coalition report shows lack of affordable rental housing (MAP).
At any rate, I wouldn't get too bogged down in the details here, but one broad pattern that emerges is a fairly damning portrait of liberal state governance in action. More liberal states typically have higher minimum wages, but it's not generally the case that liberal states have a better housing affordability picture for low-wage workers. The least-affordable states—New York, New Jersey, Maryland, D.C., California, Massachusetts, Delaware, Virginia, Connecticut, New Hampshire—are a very disproportionately blue bunch. And the problem is that the impact of high regulatory minimum wages in many of these states is swamped by the impact of excessive restrictions on housing supply.
standardofliving  minimum-wage  regulations  yglesias  sidebar  real-estate  wages 
march 2013 by HispanicPundit
Greg Mankiw's Blog: Caplan on Card
Caplan notes that these results are hard to reconcile: The former suggests that labor demand is highly inelastic, whereas the latter suggests it is highly elastic. That is a very good point. While I was well aware of Card's famous research on these topics, I had not put them together and recognized the tension between them.
caplan  minimum-wage  immigration  card  sidebar  mankiw 
march 2013 by HispanicPundit
Romer on Minimum Wages at Steven Landsburg | The Big Questions: Tackling the Problems of Philosophy with Ideas from Mathematics, Economics, and Physics
Romer’s other mistake comes when she compares the redistributive effects of the two policies — and ignores much more than half the story. She worries about who gets the benefits from each policy without pausing to ask who pays the costs — which is where the really big differences lie. The cost of the minimum wage falls, in the short run, on the owners of businesses that employ unskilled labor, and in the long run on the customers of those businesses. The costs of the EITC fall on taxpayers generally. Minimum wage supporters often talk about why it’s desirable to help the poor, but they rarely explain why it’s desirable to make big transfers away from the sort of people who eat at McDonald’s in order to spare the sort of people who eat at Per Se.
landsburg  romer  newyorktimes  minimum-wage  sidebar 
march 2013 by HispanicPundit
Krugman and a Critic on the Minimum Wage, David Henderson | EconLog | Library of Economics and Liberty
So how did Krugman handle the economics of the minimum wage? By talking about the politics of the minimum wage. Krugman tries to establish that the Republicans are shedding crocodile tears because they don't really care about the workers who might lose their jobs if the minimum wage were increased. I wondered if any of his commenters on his web page would catch Krugman changing the subject. So I started reading through the comments, something I don't generally recommend because most of the commenters are sycophants. But one commenter, Capt. J Parker, nailed it, writing...
minimum-wage  krugman  henderson  sidebar 
march 2013 by HispanicPundit
Questions that are rarely asked
Another consistency question: can you simultaneously believe that minimum wages have small disemployment effects (implying inelastic demand for labor) and that higher immigration has small negative wage effects (implying elastic demand for labor). Sign me up for relatively elastic demand for labor (in the long run) – that’s why I support immigration and am skeptical about min wage!
cowen  minimum-wage  immigration  sidebar 
february 2013 by HispanicPundit
Questions about the minimum wage
Is there any other issue where any economists insist that price floors benefit the lowest added-value suppliers? Not that I know of...This is one reason, by the way, why I do not find the monopsony explanations of minimum wage benefits convincing. Monopsony should not be particularly strong across labor, if anything the contrary (more employers hire labor than say aluminum).
cowen  minimum-wage  sidebar 
february 2013 by HispanicPundit
Minimum-Wage as a Tax
Had I addressed this analytically deeper point in my earlier post my hypothetical tax would not have been a lump-sum tax but, rather, would have been a tax the amount of which would be, for each different quantity of labor hired, the difference between the supply curve of labor and the desired minimum-wage. This dollar amount of this tax would fall the higher is the wage paid to unskilled workers; the tax would become $0.00 at the desired minimum-wage. The effect of this tax, from the perspective of employers, would be identical to that of a minimum-wage: this tax would effectively flatten out – make perfectly elastic – the supply-curve of unskilled labor. Voila! An adjustable tax on the employment of unskilled workers would increase the employment options of unskilled workers.
boudreaux  minimum-wage  sidebar 
february 2013 by HispanicPundit
Waging War Against the Minimum Wage
The percentage of empirical studies that can be interpreted as showing that a forced increase in the cost of hiring workers does not reduce the quantity demanded of such workers (or, more generally, does not prompt employers to adjust in ways that diminish the employment options of low-skilled workers) is hardly high enough to compel economists to say, “Yes indeed. Low-skilled human labor does indeed appear, at least over some range of costs, to be exempt from the law of demand.” And yet economists who support raising the minimum wage – knowing full well that if the law of demand is never suspended for low-skilled labor that a higher minimum wage will indeed harm such workers generally – nevertheless rush on the basis of relatively flimsy evidence to support a policy that threatens harm to low-skilled workers.
boudreaux  minimum-wage  sidebar 
february 2013 by HispanicPundit
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