Posts tagged with: labor

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:

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…)

The Washington Examiner has published a chart that clearly lays out the difference between Obamacare versus private sector health care. Using Walmart as an example (despite the employer’s much-disparaged employee benefits), Elliot Smilowitz at the Examiner shows that the private sector is able to offer comparable health care at much less expense than Obamacare. (more…)

The following is a letter written in response to a post from my friend Brad Littlejohn on the topic of the minimum wage

Dear Brad,

Thank you for your thoughtful and substantive engagement on the question of the minimum wage. I don’t think the conversation we had on Twitter earlier did justice to your work here, so I’m offering this response in hopes of furthering the conversation. I hope you find it fruitful. I certainly have. I should also note that I have been assuming the context of policy proposals to increase the minimum wage at the federal level in the United States. There are certainly aspects of what we’re discussing that apply to a greater or lesser extent in other contexts and at other levels of government, but at the level of individual states, for instance, the stakes are somewhat reduced and ameliorated by the realities of federalism.

You write that you “want to reflect a bit more fully on what’s wrong with one of the common conservative arguments against the minimum wage: that the laborer is only worth his productivity.” I have significant concerns with equating someone’s worth with the economic value of their labor in the marketplace. I do not argue that the laborer is only worth his or her productive work. I argue that a worker’s work is only valuable in a market setting insofar as someone is willing to pay for it. I agree that there is a subjective element to work that is in some ways intimately identified with and inseparable from the person doing the working. But I do maintain that the worker and the work can, and indeed must, be distinguished. Perhaps what we disagree about is that you think the wage someone is offered is primarily a signal about how much that person is valued. I think that the wage someone is offered is primarily a signal about how much that person’s work is useful to others.