The minimum wage debate

Jeannette Wicks-Lim does the math:

Each time a minimum wage hike is put on the table, the political debate spins on the question of whether such a move would cause business costs to increase so much that jobs are lost. To progress past this perennial debate, one key fact has to be pounded into the American psyche: Average minimum wage hikes impose small cost increases on businesses—so small that businesses can typically adjust by means other than closing their doors or laying off workers. Recent proposals to raise the $7.25 federal minimum present a welcome opportunity to take another whack at this.

Read her piece here.

The economics of the minimum wage

Arin Dube reviews recent research to answer some basic questions:

While we can set a wage floor using policy, should we? Or should we leave it to the market and deal with any adverse consequences, like poverty and inequality, using other policies, like tax credits and transfers? These longstanding questions take on a particular urgency as wage inequality continues to grow, and as we consider specific proposals to raise the federal minimum wage — currently near a record low — and to index future increases to the cost of living.

Read his piece in the New York Times here.

Trade deficit or budget deficit: which should worry us?

We hear a lot these days about the U.S. government’s budget deficit. But what we ought to be talking about is the country’s trade deficit, write Jared Bernstein and Dean Baker:

Running a trade deficit means that income generated in the United States is being spent elsewhere. In that situation, labor demand — jobs to produce imported goods — shifts from here to there.

 

Read their op-ed piece here.

Stirrings of the new economy

A new economy is emerging as the old economy falters, writes Econ4’s Juliet Schor in the New York Times:

[W]hile they are no panacea, the emergent trends of community fabrication, self-provisioning and the sharing economy collectively suggest a future for work in wealthy countries that involves more making, sharing and self-organizing. There may be fewer formal jobs — but a more entrepreneurial approach to making money, one that emphasizes smaller-scale companies and collectively owned enterprises, more sharing, and less spending. As painful as the years since the crash have been, a more resilient, satisfying and sustainable way to work and live could be one beneficial consequence.

Read her op-ed piece here.

Economy malfunction

Nobel laureate Joe Stiglitz doesn’t mince words:

Let us be clear: our economy is not working the way a well working economy should. We have vast unmet needs, but idle workers and machines. We have bridges that need repair, roads and schools that need to be built. We have students that need a twenty-first century education, but we are laying off teachers. We have empty homes and homeless people. We have rich banks that are not lending to our small businesses, but are instead using their wealth and ingenuity to manipulate markets, and exploit working people with predatory lending.

Read excerpts from his speech at the AFL-CIO here.

Blame the unemployed?

Think about it: if labor supply exceeds labor demand – in other words, there are people who want to work but can’t find jobs – is the solution to expand labor supply? How could that help if there’s already excess labor supply?? Yet some politicians think that people aren’t working because unemployment benefits are too generous. Their solution: cut benefits, then the lazy bums will get out of their hammocks and look for work. And then we’ll get …  hmm … more people looking for work and not finding it.

Paul Krugman breaks it down in his New York Times column:

The war on the unemployed isn’t motivated solely by cruelty; rather, it’s a case of meanspiritedness converging with bad economic analysis.

 

Read his piece here.

Family values?

Stephanie Coontz writes in the Times on family-unfriendly work-life policies:

We must stop seeing work-family policy as a women’s issue and start seeing it as a human rights issue.

Read more here.

Good jobs first

Tracking state subsidies to corporations. Check out their latest report:

Read it here.

The student debt trap and inequality in America

Nobel laureate Joe Stiglitz writes:

In 2010, student debt, now $1 trillion, exceeded credit-card debt for the first time.

Student debt can almost never be wiped out, even in bankruptcy. A parent who co-signs a loan can’t necessarily have the debt discharged even if his child dies. The debt can’t be discharged even if the school — operated for profit and owned by exploitative financiers — provided an inadequate education, enticed the student with misleading promises, and failed to get her a decent job.

Instead of pouring money into the banks, we could have tried rebuilding the economy from the bottom up…. We could have recognized that when young people are jobless, their skills atrophy. We could have made sure that every young person was either in school, in a training program or on a job. Instead, we let youth unemployment rise to twice the national average. The children of the rich can stay in college or attend graduate school, without accumulating enormous debt, or take unpaid internships to beef up their résumés. Not so for those in the middle and bottom. We are sowing the seeds of ever more inequality in the coming years.

Read his dissection of how economic and political inequality are poisoning opportunity in America here.

Economics denial

The New York Times reports today on attempts to suppress a Congressional Research Service report showing that tax cuts for the rich don’t create jobs:

“The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie,” the report said. “However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”

Read the Times piece here.

Read the suppressed report here.