Posts tagged with: labor

America could have saved more jobs if, prior to the Industrial Revolution, politicians had banned the use of tractors. But that would have made everyone (especially those of us living in 2014) much worse off. Many Americans understand this point and yet still believe that when workers lose their jobs, we automatically become worse off.

Economist Bryan Caplan explains the problem with this ‘make-work’ bias, and why we are better off because of 19th century workers who lost their farm jobs.

mcdonalds“Clean up your own mess. Your mother doesn’t work here.”

That was a sign, printed on dot matrix printer paper, which hung in the breakroom of the McDonald’s where I worked. While that was nearly thirty years ago, I suspect that same sign is still there (though probably reprinted on a laser printer). But the idea behind it has changed. Your mother may not work at McDonalds, but the company—and others that hire low-skilled employees—are increasingly taking on the role of in loco parentis.

Lessons in basic life skills that were once taught by parents—such as punctuality, self-direction, basic personal hygiene—are increasingly being provided by the shift manager at the local fast food restaurant. That is why it’s absurd to claim that companies that are willing to hire people who are unqualified for the labor force are somehow getting over on the American taxpayer.

As Reihan Salam,
(more…)

Seattle-mystWhen I was growing up I had a buddy—let’s call him “Bob”—who was constantly asking, “What happens if we do . . . ?” Bob’s curiosity, however, only led him to wonder about foolish actions. He never pondered, for example, what would happen if we all volunteered at the senior citizens center. Instead, his thinking ran more along the lines of what would happen if we jumped off the senior citizens center.

The reaction of me and the rest of my friends was always, “Let’s find out!” But we were more prudent than Bob (or maybe just more cowardly) so we’d encourage him to try whatever reckless idea he had in mind so we could learn from his experience. We learned, for instance, that if jump off the 3-story senior citizens center, a stack of cardboard boxes will not be enough to sufficiently break your fall.

Bob’s shenanigans would daily provide for us what social scientists would call a “natural experiment.” A natural experiment is a study of the effect of an independent variable, which has not been planned or manipulated by the researchers, on a dependent variable. (The word ‘natural’ in the term natural experiment therefore refers to an event that is not planned by the researchers.)

The city of Seattle is about to pull a Bob, by foolishly raising the minimum wage to $15 per hour. The effect on the citizens of Seattle will be almost entirely harmful. But it will provide a natural experiment on the effect of raising the minimum wage laws that the rest of American can learn from. Anyone who isn’t already convinced that increasing the minimum wage has a detrimental impact on employment and harm minority workers will, in a few years, have solid proof. We will all be able to look to Seattle to see the difference between good, albeit naive, intentions and sound economic policy.

Here are some of the effects I predict the policy will have in the next three years:
(more…)

hobbylobby1The Supreme Court recently heard oral arguments in the Hobby Lobby contraception case. But which arguments will have the most influence on the justices? Michael McConnel, a respected Religion Clauses scholar from Standford, explains which four arguments are most likely to be important:

Cutting through the politicized hype about the Hobby Lobby and Conestoga case (“Corporations have no rights!” “War on Women!”) the Justices during oral argument focused on four serious legal questions, which deserve a serious answer:

(1)  Could Hobby Lobby avoid a substantial burden on its religious exercise by dropping health insurance and paying fines of $2,000 per employee?

(2)  Does the government have a compelling interest in protecting the statutory rights of Hobby Lobby’s employees?

(3)  Would a ruling in favor of Hobby Lobby give rise to a slippery slope of exemptions from vaccines, minimum wage laws, anti-discrimination laws, and the like?

(4)  Has the government satisfied the least restrictive means test?

I think the answer to all four questions is “no.” I offer brief thoughts on each below.

Read more . . .

minwage11Acton’s Director of Research, Samuel Gregg, recently  wrote about the effects of raising the minimum wage at the National Review Online. The latest CBO report estimates that increasing the minimum wage to over $10/hour in 2016 will not greatly affect the poorest in society; it is estimated that this increase will only help 2% of those living in poverty. The benefit of the increase will go to people “already comfortably above the poverty line.” Gregg discusses this phenomenon:

Is that just?

Given the minimal (pardon the pun) effects of mandated minimum wages upon poverty, one must ask why some people invest so much intellectual energy and political capital in a policy that tends to benefit, for example, teenagers and young people from comfortable backgrounds who won’t be staying in minimum-wage jobs for very long.

In part it’s the top-down approach at work. Legislating minimum wages gives us the illusion that legislators and governments can flip a switch and make things better. Legislated minimum wages, however, aren’t immune from the workings of supply and demand. (more…)

A recent report from the CBO contains an appendix detailing updated estimates of the labor market effects of the Affordable Care Act (ACA). Pundits for and against the ACA have wasted no time in putting their own particular spin on the projections. Republicans and some other opponents have seemingly celebrated the idea that these estimates may show that the ACA is “a job-killing, economy-crushing villain,” while Democrats and some other supporters have claimed that in times of high unemployment, it’s “an economic benefit” that some will be voluntarily reducing hours or dropping out of the labor force because that means greater demand for labor — those currently unemployed would therefore have more options.

So who’s right? These are mutually contradictory claims, or so it appears. The report is ultimately limited and mixed, but nevertheless raises some serious concerns, caused, in part, by the polarization of Congress both when the law was passed and up to the present. (more…)

Watch as employees at a small Pennsylvania business learn about their new benefits under the Affordable Care Act.

Ladies: are you upset that women make only 77 cents on the dollar as compared to men? Are you sure that’s even accurate? It’s time for some straight talk about the so-called “wage gap.”

Video courtesy of the Independent Women’s Forum.

minimum wagaeFast food workers have been calling for a raise in the minimum wage, and politicians are touting it. There’s even a website devoted to it (“Rebuilding an economy that works for all of us.”) But would raising the minimum wage really help the working poor?

Economist David R. Henderson says no, it won’t. In a piece for the National Center for Policy Analysis, Henderson says there are two myths here. (more…)

Senator Jeff Sessions (R. – Ala.) is frustrated with the latest job report, saying more people are leaving the workforce than joining it:

Today’s jobs report underscores a deeper problem facing our economy: a large and growing block of people who are chronically jobless and completely outside the workforce. In December, the economy added only 74,000 jobs – not nearly enough to keep up with population growth –and 347,000 left the workforce. That means for every one job added, nearly 5 people left the workforce entirely. There are now nearly 92 million Americans outside the workforce, resulting in the lowest participation rate in 36 years.

This chart illustrates the December report, and includes figures on those who are unemployed yet still looking for work, and those who’ve given up searching. (more…)