It’s a slam-dunk case that doubling the federal minimum wage — it’s been $7.25 since 2009 — would lead to significant declines in employment opportunities for workers with few skills or little experience. According to data from the Bureau of Labor Statistics for 2019 (before the pandemic), in 47 states, at least one-quarter of all workers earn less than $15 per hour. In 20 states, half of all workers earn less than $18 per hour, and in 30 states, the median hourly wage is less than $19.
These statistics show that $15 is a very high wage floor. For employers to keep all their workers would require raising the wages of a huge share of the national workforce. But the number of workers affected would be so large that this wouldn’t happen. Instead, the number of jobs in the low-wage workforce would shrink.
The nonpartisan Congressional Budget Office confirms this basic intuition, estimating that joblessness would increase by 1.3 million if the national hourly wage floor were hiked to $15 [TC: and that is pre-pandemic]. The CBO also concluded that this policy would reduce business income, raise consumer prices and reduce gross domestic product.
That is from Michael Strain at Bloomberg. I would add this. No matter what you think about the recent literature on the minimum wage, all economic theories imply that minimum wages should be decided at the state and local level, given the economic heterogeneity of the United States. That is the message that you as an economist should be carrying forward.
Do you think Puerto Rico should be a state? Should they have a $15 minimum wage too? Come on. Yes, it is easy enough to make an exception for them, and by the way the median manufacturing wage in Mississippi is below $15 as well. Rinse and repeat.
I am sorry to speak in such terms, but the reality is that an allied cabal of activists and left-wing economists have combined on social media to insist on a particular approach to minimum wage economics and to bully those who disagree.
Ask yourself a simple question: were any of them calling for a temporary two-year cut in the minimum wage for restaurants and small businesses during a devastating pandemic? If not, are they really carrying forward the banner of science?
By July it will all be over. The only question is how many people have to die between now and then?
Youyang Gu, whose projections have been among the most accurate, projects that the United States will have reached herd immunity by July, with about half of the immunity coming from vaccinations and half from infections. Long before we reach herd immunity, however, the infection and death rates will fall. Gu is projecting that by March infections will be half what they are now and by May about one-tenth the current rate. The drop will catch people by surprise just like the increase. We are not good at exponentials. The economy will boom in Q2 as infections decline.
If that sounds good bear in mind that 400,000 people are dead already and the CDC expects another 100,000 dead by February. We have a very limited window in the United States to make a big push on vaccines and we are failing. We are failing phenomenally badly.
To understand how bad we are failing compare with flu vaccinations. Every year the US gives out about 150 million flu vaccinations within the space of about 3 months or 1.6 million shots a day. Thus, we vaccinate for flu at more than twice the speed we are vaccinating for COVID! Yes, COVID vaccination has its own difficulties but this is an emergency with tens of thousands of lives at stake.
I would love it if we mobilized serious resources and vaccinated at Israel’s rate–30% of the population in a month. But if we simply vaccinated for COVID at the same rate as we do for flu we would save thousands of lives and hundreds of billions of dollars in GDP. The comparison with flu vaccinations also reminds us that we don’t necessarily need the National Guard or mass clinics in stadiums. Use the HMOs and the pharmacies!
And let’s make it easier for the pharmacies. It’s beyond ridiculous that we are allowing counties to set their own guidelines for who should be vaccinated first. We need one, or at most 50, set of guidelines and lets not worry so much at people jumping the queue. (The ones jumping the queue are probably the ones who want to get back to the bars and social life the most so vaccinating them first has some side benefits.)
Of course, the faster we vaccinate the more vaccine quantities will become the binding constraint which is why we also need to approve more vaccines, move to First Doses First (delay second doses like the British), and use Moderna half-doses. Fire on all cylinders!
Time is of the essence.
Hat tip: Kevin Bryan and Witold Wiecek.
The U.S. also experienced its most violent year in decades with an unprecedented rise in homicides. The Gun Violence Archive reported that more than 19,000 people died in shootings or firearm-related incidents in 2020, the highest figure in over two decades.
New Orleans-based crime analyst Jeff Asher took a closer look at the number of murders in 57 major American cities and he found that the number of offenses grew in 51 of them. He only focused on agencies where data was available and most of them had figures through November or December of 2020. Growth in violent crime varied by city with Seattle seeing a 74 percent spike in homicides between 2019 and 2020 while Chicago and Boston saw their offenses grow 55.5 percent and 54 percent, respectively. Elsewhere, Washington D.C. and Las Vegas saw growth in their murder offences, albeit at a slower pace of less than 20 percent.
New York’s homicide count went up by nearly 40 percent with Mayor Bill de Blasio stating that the figures should worry all New Yorkers and it has to stop.
Here is the full link. Via Noah.
I’m an advisor to a number of firms, including several in the crypto space such as Elrond (eGLD coin). When I signed on as an advisor more than two years ago, Elrond was almost completely unknown, which wasn’t surprising as they were based in Romania. I thought the Romanian base was a positive, however, because it meant that Elrond could hire extremely well-educated computer scientists, mathematicians and software engineers at below Silicon Valley prices. Moreover, the blockchain world, true to its foundations, is decentralized. Like a modern day Erdos, Vitalik Buterin operates out of his suitcase. The Silicon Valley of the blockchain is the internet. Why the blockchain world has evolved differently than Silicon Valley is an interesting question (with implications for whether SV could loses its centrality) but because it is decentralized I thought location was less important than the quality of the team. And the team, led by hard-charging founder Beniamin Mincu, is excellent. In the last two years the Elrond team has built a completely modern blockchain from the ground up using secure proof of stake and sharding to achieve a potential throughput of upwards of 16 thousand transactions per second with 6s latency and $.001 transaction cost and a toolkit for developers. I was also impressed by the commitment Elrond had to security, including formal verification methods, and especially to making Elrond accessible to the masses. Today Elrond/eGLD is on a tear and by market cap it is one of the top 50 projects in the space with a strong upward trend.
Will Elrond take over the world? I hope so! But, of course, it is unclear. Aside from ranking Elrond versus other projects the space itself still doesn’t have a killer app for the masses. In 2017 near the peak of the market at that time, Vitalik Buterin tweeted:
So total cryptocoin market cap just hit $0.5T today. But have we *earned* it?
How many unbanked people have we banked?
How much censorship-resistant commerce for the common people have we enabled?
How much value is stored in smart contracts that actually do anything interesting?…
The total market cap is now close to a trillion, about twice the level when Vitalik tweeted, and these are still good questions. Bitcoin has established itself as a new asset class that is rapidly supplanting gold as a store of value (gold is lame) but not as a payments platform. Ethereum, Elrond and competitors like Algorand were built for smart contracts, including things like stable coins which will be used for payments, but smart contracts are capable of doing much more. In theory, smart contracts let people cooperate in new ways, potentially unlocking trillions in value. But we aren’t there yet.
Decentralized finance or DeFi is one suggestive hint of where things are going. Already many billions of dollars are “lent” and “saved” using DeFi. The lending and saving, however, is almost entirely done in one cryptocurrency for another. In essence, the DeFi system is leveraging off of crypto speculation and trading.
Nevertheless, something interesting is happening in DeFi. The DeX’s or decentralized exchanges have shown that automated market makers can perform the services of market order books used by the traditional exchanges like the NYSE at lower cost while being easily accessible from anywhere in the world and operating 24/7/365. Thus, every exchange in the world is vulnerable to a DeX.
Also, although DeFi is a place where you can easily lose all your money to mistakes, scams, and bugs (not to mention changes in asset values), DeFi is rapidly developing state-of-the-art security. Only the paranoid survive on the blockchain which means that the systems that do survive are robust. Balaji Srinivasan recently tweeted that Bitcoin is the most powerful algorithm in the world and few algorithms have been as battle-tested as Bitcoin. In a similar way, DeFi will be secure or die and security in a blockchain world will be more secure than anywhere else.
Combining security with accessibility is what’s hard. It’s telling that Coinbase is one of the most successful firms in the crypto space despite performing services which are in some tension with the philosophical foundations of crypto. Satoshi Nakamoto would probably be a little disappointed to learn that people were depositing their Bitcoins in a bank! I can understand the impulse, however. It’s almost magical how you can move money on a blockchain without input or permission from any authority. But when you click the button and your money disappears it’s terrifying as you pray for the invisible hand of the miners to restore your money in another account. Elrond’s soon to be released Maiar app, a wallet that interacts with the Elrond blockchain using only a phone number, will be an interesting test of whether a blockchain platform can duplicate the ease of use of something like PayPal or Zelle.
The other interesting development in the space are zero knowledge proofs. Zero knowledge proofs let someone prove that they know a piece of information or the results of a computation without revealing the information. ZK proofs started in the academic literature but research in their uses and applications has exploded as computer scientists like Silvio Micali start blockchains and blockchains like ZCash hire computer scientists who advance the scientific literature (to give just one example). Truly anonymous digital cash is one application but more generally zero knowledge proofs let people buy and sell information in a way which has always been difficult and seemed impossible (how can you sell a piece of information without showing it to someone first but then having seen the information why would they buy it?).
Bottom line is that crypto is still waiting for the killer app which will make it 21st century infrastructure but there has been tremendous scientific progress in blockchains since the ur-date, 1/3/2009. Modern platforms like Elrond are faster, more robust, and more powerful than past platforms and the potential is there for transformative growth.
Are couples with daughters more likely to divorce than couples with sons? Using Dutch registry and U.S. survey data, we show that couples with daughters face higher risks of divorce, but only when daughters are 13 to 18 years old. These age-specific results run counter to explanations involving overarching, time-invariant preferences for sons and sex-selection into live birth. We propose another explanation that involves relationship strains in families with teenage daughters. In subsample analyses, we find larger child-gender differences in divorce risks for parents whose attitudes towards gender-roles are likely to differ from those of their daughters and partners. We also find survey evidence of relationship strains in families with teenage daughters.
As many of you will expect, I am fine with their decision. Furthermore I think they made it at exactly the right moment.
Questions for those who think that Twitter made the wrong decision:
1. Can you state your margin? That is, what would Trump have to do for you to think that Twitter should suspend his account?
2. Robert Nozick called for an archipelago of polities, each autonomously setting their own rules. Isn’t Twitter’s action quite consistent with this vision? Is the optimal libertarian equilibrium really one that adds centralized government regulation of tech platform speech codes? If so, does that induce you to reject libertarian doctrines more generally?
3. If you favor regulation to avoid this deplatforming, which many are calling for, is the optimal libertarian equilibrium really one that adds centralized government regulation of tech platform speech codes? Where else do you think technology companies should be more regulated when it comes to speech issues?
4. Do you think that the US is the only government that should regulate the speech codes of technology companies or are you in favor of the evolution that would actually occur, i.e. dozens of different countries regulating platform speech in heterogeneous fashion? If you don’t favor the latter, shouldn’t you be stridently on the side of tech platform independence here? Do you think that the modal government has more or less Millian liberal tendencies than say Jack Dorsey or Mark Zuckerberg?
Questions for those who think that Twitter made the right decision:
5. Why not ban the CCP or Ayatollah Khomenei or many of the other odious and even genocidal characters who populate Twitter today? This tweet still stands: https://twitter.com/khamenei_ir/status/1263551872872386562. (My view would be to ban the violence-promoting Ayatollahs and leave the CCP, albeit with labeling that it is state propaganda.)
6. This summer, Slate and many other media organizations condoned violence in explicit terms. Murders are in fact up a great deal this year. Given that incitement to violence is manifestly acceptable to Twitter in many cases, can you articulate the relevant standard in more detail?
The government this week proposed an emergency law that would allow it to lock down large parts of society; the first recommended use of face masks came into force; and the authorities gave schools the option to close for pupils older than 13 — all changes to its strategy to combat the pandemic.
“I don’t think Sweden stands out [from the rest of the world] very much right now,” said Jonas Ludvigsson, professor of clinical epidemiology at Karolinska Institutet in Stockholm. “Most of the things that made Sweden different have changed — either in Sweden or elsewhere.”
…Sweden has reported more than 2,000 Covid-19 deaths in a month and 535 in the past eight days alone. This compares with 465 for the pandemic as a whole in neighbouring Norway, which has half the population. As Sweden’s King Carl XVI Gustaf said just before Christmas: “We have failed.”
Here is more from the FT. U.S. Covid deaths per day have now exceeded 4,000 for some days, and they are running at about 50% of the normal number for total daily deaths. And no, it is not that the payments to classify these as Covid deaths have increased, rather the virus and the deaths have increased. So the “no big deal” question we now can consider settled? The new and more contagious strains haven’t even started playing a major role yet in the United States.
It isn’t clear to me who in the United States is legally entitled to make this decision. An FDA EUA is required before a vaccine can be used in the U.S. But once an EUA has been issued, is “off-label use” permitted? The CDC’s Advisory Committee on Immunization Practices recommends how scarce vaccine doses should be prioritized, but “states” (governors?) are free to make contrary prioritization decisions. Can states also decide to give half-doses or lengthen the interval between first and second doses? Can a hospital, a nursing home, or an individual doctor make such a decision? (If so, can it also deviate from its state prioritizations?) Can HHS or the President specify how these decisions must be made, or alternatively can they explicitly free lower-level decision-makers to use their own judgment?
You’re not a specialist in pharmaceutical law, I realize. But I doubt you’ll let that stop you! When you recommend a less risk-averse approach to COVID-19 vaccination, to whom are you addressing the recommendation? Who has a right to implement it?
That is from MR reader Peter Sandman. Can any MR reader inform us on this?
Neal Katyal has argued 43 cases before the Supreme Court. Until the coronavirus pandemic hit, he hadn’t once enlisted his son as an assistant.
Now, Mr. Katyal and other lawyers appearing in the nation’s highest court have to argue their cases remotely, which often means from home. In November, as Mr. Katyal prepared in his home office to represent the city of Philadelphia in a case about religious objections to same-sex parents, he worried about the street noise.
So he gave his 19-year-old son $100 and instructed him to go outside and dole out cash to quiet down any noisemakers. Sure enough, minutes before the hearing began, a truck rolled up, idling loudly.
“Oh my God, the justices are going to be so mad at me,” Mr. Katyal, who served as acting solicitor general in the Obama administration, recalled thinking. Fortunately, the truck drove away without his son having to intercede.
Here is the full WSJ article.
The British approved the Pfizer vaccine, they approved the AstraZeneca vaccine, they moved to first doses first and now they are allowing (not yet encouraging they are running a trial) mix and match. Under the present circumstances, the British focus on doing what it takes to save lives is smart, admirable, and impressive.
As I wrote on Dec. 10, in Herd Immunity is Herd Immunity:
Mix and matching has two potentially good properties. First, mix and matching could make the immune system response stronger than either vaccine alone because different vaccines stimulate the immune system in different ways. Second, it could help with distribution. It’s going to be easier to scale up the AZ vaccine than the mRNA vaccines, so if we can use both widely we can get more bang for our shot.
Addendum: The CDC is projecting 80,000 COVID deaths in the United States over the next three weeks.
On December 12 I wrote:
We should vaccinate 6 million people with first dose NOW. It is deadly cautious to hold second dose in *reserve*. Supply chain will be ok and the exact timing of the second dose is not magical and likely not critical.
Modelling by a group at the University of Toronto confirmed.
Ashleigh Tuite, an epidemiologist at U of T’s Dalla Lana School of Public Health….said she and her colleagues projected that frontloading vaccine doses would avert between 34 and 42 per cent more symptomatic coronavirus infections, compared with a strategy of keeping half the shipments in reserve.
“It makes much more sense to just get as many people their first doses as soon as possible,” Dr. Tuite said.
…everyone should get the second dose on schedule, but if supply issues delay that injection by a week or two, it shouldn’t hamper how well the vaccines work.
According to Abigail Bimman at Global News, Ontario will now switch to getting as many first doses out as possible:
NEW: Ontario is changing its vaccine policy and no longer reserving second doses, but getting all of the initial 90k out the door- they expect to finish them in the “next several days” – Health Minister’s office tell @globalnew. Change due to confidence in supply chain.
It’s not all the way to first doses first but it’s a minimally risky, smart move. Indeed, Nova Scotia, Saskatchewan and British Columbia already have said that they won’t hold back first doses.
The United States should listen to the wise Canadians.
Britain will start a human challenge trial in January.
The Sun: Imperial College said its joint human challenge study involves volunteers aged 18 to 30, with the project starting in January – and results expected in May.
Initially, 90 volunteers will be given a dose of an experimental nasal vaccine.
They’ll then be deliberately infected with Covid-19.
But this is really just the first part of an excessively cautious study designed to “discover the smallest amount of virus it takes to cause a person to develop Covid-19 infection.” Moreover:
… it’s taken a few months to come to fruition, as before any research could begin the study had to be approved by ethics committees and regulators.
The omission-commission error is deadly. Notice that giving less than one hundred volunteers the virus (commission) is ethically fraught and takes months of debate before one can get approval. But running a large randomized controlled trial in which tens of thousands of people are exposed to the virus is A-ok even though more people may be infected in the latter case than the former and even though faster clinical trials could save many lives. Ethical madness.
Chinese regulators said Thursday they have launched an antitrust investigation into Chinese e-commerce giant Alibaba Group Holding Ltd. BABA 0.14% and separately said they would summon affiliate Ant Group for discussions on competition and consumer rights.
Taken together, the two actions mark the strongest enforcement action by Beijing against the country’s biggest technology giant and Jack Ma, its billionaire founder.
The Alibaba investigation was revealed Thursday by China’s antimonopoly regulator, the State Administration for Market Regulation, which said in a brief statement that it was acting on reports that Alibaba was pressuring merchants who sell goods on its platforms to commit to not selling on its competitors. Alibaba’s e-commerce platforms, Taobao and Tmall, compete with domestic rivals JD.com Inc. and Pinduoduo Inc.
The coronavirus-relief bill racing through Congress contains a fair amount of economic relief as well as a wide array of unrelated measures that were thrown into the bill with little or no public debate. Included in the latter category is something shocking: a huge package of energy reforms that will result in major greenhouse-gas reductions.
How big a deal are the climate provisions? The World Resources Institute has called the bill “one of the most significant pieces of climate legislation that Congress has passed in its history.” Grant Carlisle, a senior policy adviser at the Natural Resources Defense Council, says, “This is perhaps the most significant climate legislation Congress has ever passed.”
To be sure, the “most significant climate legislation Congress has ever passed” designation is a little bit misleading. Congress hasn’t passed much climate legislation. The climate provisions in the coronavirus-relief bill might add up to more than President Obama’s 2009 stimulus bill, which included $90 billion in green-energy subsidies and helped seed the boom in wind, solar, batteries, and other tech over the past decade. They likely won’t be as significant as the 1970 Clean Air Act, which created the regulatory authority that does most of the heavy lifting in reducing carbon pollution.
But the amount of good climate policy in this bill is shocking, especially given the fact that it is about to be signed by Donald J. Trump. The major provisions include: a $35 billion investment in new zero-emission energy technology (including solar, wind, nuclear, and carbon-capture storage); an extension of tax credits for wind and solar energy, which were set to expire; and, most significantly, a plan for phasing out hydrofluorocarbons, a small but extremely potent greenhouse gas used as a coolant.
If I had to describe 2019 so far, I would characterize it as The Year Political Polarization Started to Erode. I know that sounds counterintuitive — aren’t partisans at each other’s throats on social media all the time? — but bear with me.
There is some data to support my point. A recent poll about regulating the tech industry, an issue which could prove to be one of the most important of our time, asked: “Do you agree or disagree that tech companies have too much power and should be more regulated?” Some 16 percent of Republicans said they “strongly agree,” while 13 percent of Democrats did. And combining those who “strongly agree” and “somewhat agree” gives an identical figure for both parties — 46 percent. This is the near-opposite of polarization.
More generally, both parties also seem to have converged in thinking that fiscal deficits are fine and more government spending is a good thing.