Posts tagged with: Labor economics

300px-GeocentrismGeocentrism was the belief that the sun, the planets, and all the stars revolve around the Earth. The alternative view—heliocentricism—had been around since the 3 BC but was not taken seriously until the 16th century AD. What seems obvious to us now was a matter of heated debated for almost two thousand years.

Economist Don Boudreaux says the minimum-wage debate in economics is rather like the reverse of this debate that took place centuries ago among astronomers.

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Unemployment-0306Series Note: Jobs are one of the most important aspects of a morally functioning economy. They help us serve the needs of our neighbors and lead to human flourishing both for the individual and for communities. Conversely, not having a job can adversely affect spiritual and psychological well-being of individuals and families. Because unemployment is a spiritual problem, Christians in America need to understand and be aware of the monthly data on employment. Each month highlight the latest numbers we need to know (see also: What Christians Should Know About Unemployment).

Positive news is marked with the plus sign (+) while negative employment data is marked with a minus sign (-). No significant change is marked by (NC).
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patricia-arquette-oscars-acceptance-speech-w724During last night’s Oscar ceremony, Best Supporting Actress winner Patricia Arquette used her acceptance speech to rail against unfair pay for women:

To every women who gave birth to every taxpayer and citizen of this nation, we have fought for everybody else’s equal rights. It’s our time … to have wage equality once and for all and equal rights for women in the United States of America.

The wage equality that Arquette is referring to is the gender wage gap—the difference between male and female earnings expressed as a percentage of male earnings. Because she frames the issue as a matter of equal rights, Arquette presumably believes that the problem is caused by intentional discrimination.

The gender wage gap certainly exists, but there is considerable debate about the size of the gap and whether it is caused primary by discrimination or by other factors, such as education and work hours. Much of the confusion is caused by the use of misleading statistics by politically motivated groups. For example, last night the Department of Labor (DOL) posted on their Twitter account:
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_70189222_464_unemployedUnemployment is a spiritual problem. When a person loses their job, they’ve lost a means to provide for their family, an important aspect of their human flourishing, and the primary way they serve their neighbors. With the loss in vocation comes a loss in meaning. Not surprisingly, unemployment can have long-term negative effects on communities, families, and a person’s subjective well-being and self-esteem.

The most disturbing effect of unemployment is the despair that can lead people to take their own lives. One out of every five suicides in the world can be associated with unemployment, according to a new study published in The Lancet Psychiatry. As Business Insider reports,
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UnemploymentSeries Note: Jobs are one of the most important aspects of a morally functioning economy. They help us serve the needs of our neighbors and lead to human flourishing both for the individual and for communities. Conversely, not having a job can adversely affect spiritual and psychological well-being of individuals and families. Because unemployment is a spiritual problem, Christians in America need to understand and be aware of the monthly data on employment. Each month highlight the latest numbers we need to know (see also: What Christians Should Know About Unemployment).

Positive news is marked with the plus sign (+) while negative employment data is marked with a minus sign (-). No significant change is marked by (NC).
(more…)

_70189222_464_unemployedSeries Note: Jobs are one of the most important aspects of a morally functioning economy. They help us serve the needs of our neighbors and lead to human flourishing both for the individual and for communities. Conversely, not having a job can adversely affect spiritual and psychological well-being of individuals and families. Because unemployment is a spiritual problem, Christians in America need to understand and be aware of the monthly data on employment. Each month highlight the latest numbers we need to know (see also: What Christians Should Know About Unemployment).

Positive news is marked with the plus sign (+) while negative employment data is marked with a minus sign (-). No significant change is marked by (NC).
(more…)

coins_ladderOne holdover from 2014 into the new year is the cry for an increase in the minimum wage. President Obama pledged (in a December 2014 speech) to bump the minimum wage up to $9/hour nationally. Many believe that this move will help stimulate the still-sluggish economy.

Michael R. Strain, at  the American Enterprise Institute, isn’t wholly against raising the minimum wage, but he’s not wholeheartedly for it, either. He thinks we are asking the wrong question. Do we need to raise the minimum wage, or do we need to increase employment?

The labor market for young and low-skill workers is in terrible shape. More than 14 percent of workers aged 16–24 are unemployed. The situation is even worse if you look only at teenagers, over 1 in 5 of whom are unemployed. The unemployment rate for high-school dropouts over the age of 24 is 10.8 percent — a two-decade high — and only 4 people out of every 10 in that group have jobs. And there are still a staggering 4.1 million unemployed workers who have been looking for a job for six months or longer, many of whom are young or low-skill. (more…)

Summer-JobsGiving disadvantaged youth a summer job reduces violent crime, according to a new study published to the journal Science.

In a randomized controlled trial among 1,634 high school youth in Chicago, assignment to a summer jobs program decreases violence by 43 percent over 16 months (3.95 fewer violent-crime arrests per 100 youth). The decline occurs largely after the 8-week intervention ends.
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_70189222_464_unemployedSeries Note: Jobs are one of the most important aspects of a morally functioning economy. They help us serve the needs of our neighbors and lead to human flourishing both for the individual and for communities. Conversely, not having a job can adversely affect spiritual and psychological well-being of individuals and families. Because unemployment is a spiritual problem, Christians in America need to understand and be aware of the monthly data on employment. Each month highlight the latest numbers we need to know (see also: What Christians Should Know About Unemployment).

Positive news is marked with the plus sign (+) while negative employment data is marked with a minus sign (-). No change is marked by (NC).
(more…)

gaplogoThe furniture store Ikea has announced they will begin to base their minimum pay on what’s considered to be a “living wage” in each local area, rather than on what competitors are paying. Similarly, the clothing retailer Gap says it will set $9 as the minimum hourly rate for its United States work force this year and then establish a minimum of $10 next year.

This makes good business sense — but will lead to a lot of bad economic reasoning.

A prime example is the latest column by Slate’s business and economic writer, Jordan Weissmann:

Notably, Ikea isn’t raising prices on its furniture to pay for the raise. Instead, the company’s management says it believes the pay hike will help them compete for and keep talent, which is of course good for business. The Gap used a similar justification when it announced it would raise its own minimum to $10 by 2015.

Which I think hints at something about what would likely happen if the U.S. raised the federal minimum. Conservatives who argue that higher pay floors kill jobs tend to assume that businesses are already running at pretty much peak efficiency, and so forcing them to spend more on labor will lead to less hiring. But left-leaning economists see it differently. They tend to argue that increasing wages can lead to savings for business by reducing worker turnover, for instance, and forcing managers to make better use of their staff.

Both the conservatives and the left-leaning economists are largely correct. Higher pay floors do tend to kill jobs and increasing wages can lead to savings for business by reducing worker turnover. But where Weissmann and other liberals go wrong is in assuming that businesses can still prevent worker turnover when the minimum wage is increased.
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