Results for “"minimum wage"” 290 found
Thursday assorted links
Monday assorted links
1. Drone deliveries start in Virginia town.
2. “All the US politicians and pundits and social media virtue signalers who are quick to windbag opine on Hong Kong protests are quiet on Chile and Barcelona this week where brutal rioters are destroying their cities and police are aggressively cracking down.” That is from Sameer Chisty. Not exactly how I would frame it, but a perspective worth hearing.
3. Sweet beverage taxes had no impact in three of the four major American cities studied.
4. Particulate matter has been rising in the U.S. since 2016 and that is bad.
5. New Kleiner and Soltas results on occupational licensing. As a side note, if you think quantity restrictions on labor entry are so bad, are you also committed to thinking the dual of price restrictions — minimum wages — must fail too? If not, what is the exact difference between those two cases?
Matthew Lilley on Saez and Zucman
From an email:
The eye-catching result here is they have consumption taxes being *sharply* regressive, e.g. 12% for the lowest income group. I’m not aware of any US state that has state + average local sales rates tax that high. And lots of goods are exempt from sales tax. So how do they get this? Well, suppose someone earns $1k in labor earnings and gets $9k in transfers, and consumes it all paying a 5% sales tax = $500 in tax. What sales tax rate have they paid (as a % of their income)? The method Treasury uses says 500/(1k+9k) = 5% (this is also what Auten-Splinter do). Saez-Zucman exclude transfers from the denominator, and thus say 500/1k = 50%. This is a matter of definition, so it’s hard to call it right or wrong, but it does seem misleading and yield some rather nonsensical implications. For example, it means that if welfare to the poor is increased, this will be measured as an increased tax rate.
Indeed, Saez-Zucman themselves seem to realise that this definition yields extreme numbers at the very bottom, where consumption tax rates can easily exceed >100%. In their appendix – https://eml.berkeley.edu/~saez/SZ2019Appendix.pdf – they note “People with very low pre-tax income (below half the federal minimum wage) earn transfer income (temporary assistance, SNAP, supplemental security income, veteran benefits, etc.), which is not part of pre-tax income. They pay sales taxes on that transfer income when it is consumed. As a result, they have high (sometimes very high) tax rates as a fraction of their pre-tax income. We avoid that problem by restricting the population to adults with more than half the minimum in pre-tax income.“
This is quite remarkable. If the sensible way of defining tax rates involves excluding transfers from the denominator (as they claim), the fact that it leads to very high rates by construction at the bottom should be because this is a sensible summary of reality. Yet, in their own words, it’s a problem. Rather than switching method, they drop the people at the very bottom which conveniently covers up the problem (but leaves a less severe version of the problem in their remaining lower income sample). Of course, they could have just used the standard definition which includes transfers in the denominator, but doing this destroys the entire headline result.
It also seems noteworthy that in choosing to excluding transfers, they nonetheless retain payroll taxes. It seems pretty egregious to call payroll taxes regressive when social security is implicitly an insurance scheme with a very large degree of aggregate progressivity, but this is a minor point by comparison.
Tuesday assorted links
A test of Marginal Revolution political bias
Here is an email from Daniel Stone at Bowdoin, I am not imposing a double-formatting on it for ease of reading and formatting:
“Dear Tyler (if I may),
I’m a big fan of your work in general, and MR in particular, and think that you do as good a job as anyone at exploring a variety of political perspectives, and sharing related (diverse) research.
Still, you’re human after all J. I’ve always been curious if there are systematic patterns in your writing or links you post.
It occurred to me a couple weeks ago that you sometimes describe research as speculative or imply this by adding a question mark to the end of the link (the example that made me notice this was: “Minimum wage effects and monopsony?”https://marginalrevolution.com/marginalrevolution/2019/07/thursday-assorted-links-215.html). At other times your link simply states the main research finding or directly quotes from the paper or its title.
So, while it might be hard to identify a general bias in your links – even if the majority were, say, “pro-liberal”, this wouldn’t necessarily mean *you* were biased, since the majority of good research out there could be pro-liberal, using the added “?”s provides an identification strategy: if you were more likely to add a ? for research that leans one political direction or the other, that would suggest a bias on your part.
As a fun side project, that I thought might also have some value given the importance of MR and understanding bias more generally, I had my RA (Maggie Hanson, cc’d) grab all your links from Assorted Links posts to social science research this year (as of a few days ago). Together we coded the ‘slant’ of each as L, R or N (neutral) – depending on whether the research supports regulation, indicates market failure, etc (admittedly our process here was not extremely scientific). She also recorded whether your link text is phrased as a question (or notes that the finding is speculative, which you did a couple times and seems similar). In addition, for link text phrased as a question, we also noted whether this text is a direct reference to the research paper’s title, as this means you didn’t actually add the “?”.
We did a bit of very basic analysis, here are results:
The distribution of slant across links is quite balanced, but leans left:
. tab sla
Slant |
(L/N/R) | Freq. Percent Cum.
————+———————————–
L | 35 29.17 29.17
N | 58 48.33 77.50
R | 27 22.50 100.00
————+———————————–
Total | 120 100.00
But you were slightly more likely to phrase your link as a question for “L” links vs for Rs (9/35 for Ls vs 5/27 for Rs):
. tab slant endswith
Slant | Ends with ?
(L/N/R) | n y | Total
———–+———————-+———-
L | 26 9 | 35
N | 48 10 | 58
R | 22 5 | 27
———–+———————-+———-
Total | 96 24 | 120
And you were a bit more likely to do this for links that were not direct quotes of article titles that were questions (7/33 = 0.21 for Ls vs 2/24=0.083 for Rs):
tab slant endswith if linktex==”n”
Slant | Ends with ?
(L/N/R) | n y | Total
———–+———————-+———-
L | 26 7 | 33
N | 48 8 | 56
R | 22 2 | 24
———–+———————-+———-
Total | 96 17 | 113
But the magnitude of this difference is not large (and I bet not statistically significant), and the large majority of both L and R links were presented by you without questions marks.
Bottom line: you do present a quite balanced set of research findings, the general distribution leans left but it is hard to interpret this (without knowing the slants of research in general or the slant of research you post elsewhere, aside from Assorted Links). And there is suggestive evidence of a small tendency for you to be more questioning of research supportive of liberal/leftist policies.
Here’s a link to the data:
https://docs.google.com/spreadsheets/d/1CrPqezV51SCwAwuwjdRqBy4jUlX76Iti0X4P1nKPMpM/edit?usp=sharing
This includes a sheet with all the links that end in ?, that aren’t quotes of article titles, and their slants.
I wanted to share this with you before sharing with others. Please feel free to let me know any questions or comments!
Thanks, and thanks again for all your work. All the best – Dan”
Thursday assorted links
1. Whose advice should you take?
2. Buddhists go to war (NYT): “But Buddhism, whose adherents make up only 7 percent of the global faithful, is the only major religion whose population is not expected to grow in absolute numbers over the next few decades…”
3. Taiwan’s status is a geopolitical absurdity.
4. Minimum wage effects and monopsony?
State and local policy is the real immigration policy
That is the central claim of my latest Bloomberg column, here is one excerpt:
State and local governments are making immigration policy all the time, mostly for the worse, and often Democrats are more restrictionist than Republicans.
Obviously the law can deter potential illegal migrants from entering the U.S. But so can the high cost of living. Even though there are much higher wages in the U.S. than in its neighbors to the South, a lot of those higher wages are eaten up by much higher rents — especially if the immigrant moves to a major city, as is often the case. I once wrote a book based on fieldwork in rural Mexico, and I found that, for those who had migrated temporarily to the U.S., high rent was typically their biggest complaint. It therefore follows that policies which raise rents tend to discourage immigrants, particularly poorer immigrants.
And:
The minimum wage is another tool of anti-immigration policy, at least for less skilled immigrants. Say a city sets a minimum wage of $15 an hour. That means a potential migrant whose work is worth only $12 an hour won’t be able to get a legal job in that city. That will deter migration, both legal and illegal. Furthermore, a worker in, say, Honduras may not find it possible to improve his or her skills to be worth $15 an hour, at least not without arriving in the U.S.
Wednesday assorted links
Wednesday assorted links
1. Scott Sumner on trade war vulnerability.
2. Voynich deciphered, it would seem.
3. Can sexual segregation in sports be justified? And more here.
4. Jeff Clemens on minimum wage research.
5. Should we integrate the worlds of fashion and academia? (NYT)
6. Arnold Kling reviews *Big Business: A Love Letter to an American Anti-Hero*.
Wednesday assorted links
Sunday assorted links
Some implications of monopsony models
More workers ought to be in larger firms, as those firms are afraid to hire more, knowing that bids up wages for everyone. Therefore (ceteris paribus) the large firms in the economy ought to be larger.
Raising the legal minimum wage also reallocates workers into larger firms, and again makes them larger.
Tough stuff if you worry a lot about both monopoly and monopsony at the same time — choose your poison!
I have adapted those points from a recent paper by David Berger, Kyle Herkenhoff, and Simon Mongey, “Labor Market Power.” On the empirics, they conclude: “Our theory implies that this declining labor market concentration increase labor’s share of income by 2.89 percentage points between 1976 and 2014, suggesting that labor market concentration is not the reason for a declining labor share.” So the paper makes no one happy (good!): monopsony is significant, but has been declining in import.
Paying People to Stay Out of Jail
Should we pay people not to commit crime? Could we? Murat Mungan from GMU Law shows that it could pay in principle:
This article considers the possibility of simultaneously reducing crime, prison sentences, and the tax burden of financing the criminal justice system by introducing positive sanctions, which are benefits conferred to individuals who refrain from committing crime. Specifically, it proposes a procedure wherein a part of the imprisonment budget is re-directed towards financing positive sanctions. The feasibility of reducing crime, sentences, and taxes through such reallocations depends on how effectively the marginal imprisonment sentence reduces crime, the crime rate, the effectiveness of positive sanctions, and how accurately the government can direct positive sanctions towards individuals who are most responsive to such policies. The article then highlights an advantage of positive sanctions over imprisonment in deterring criminal behavior: positive sanctions operate by transferring or creating wealth, whereas imprisonment operates by destroying wealth. Thus, the conditions under which positive sanctions are optimal are broader than those under which they can be used to jointly reduce crime, sentences, and taxes. The analysis reveals that when the budget for the criminal justice system is exogenously given, it is optimal to use positive sanctions when the imprisonment elasticity of deterrence is small, which is a condition that is consistent with the empirical literature. When the budget for the criminal justice system is endogenously determined, it is optimal to use positive sanctions as long as the marginal cost of public funds is not high.
It’s harder to implement in practice, however. Increasing the minimum wage and the EITC might be easier or maybe not.
Hat tip: Kevin Lewis.
Tuesday assorted links
1. Minimum wage hikes increase property crime.
2. Your memory influences the rent you end up with.
3. An alert whenever “danger” is nearby, a really bad idea (NYT).
4. “Women with a male twin were 15 percent less likely to graduate from high school than women with a female twin, and those who went to college were 4 percent less likely to finish it. They had a 12 percent lower probability of being married, and a 6 percent lower probability ofhaving children.” Link here (NYT).
5. Peter Thiel and Cornel West speaking at Harvard.
6. The psychology of elite sports.
7. “Armando, the ‘Lewis Hamilton of pigeons’ sells for record €1.25m.“
Wednesday assorted links
2. What a click farm looks like.
3. Alternative universities. One is called “Polymath University.”
4. Quantum seems yet more confusing.