"Labor economists William Even and David Macpherson’s study of the impact of state minimum-wage mandates in 2007-09 found that they cost younger blacks more jobs than the Great Recession did.
Edward Millner's blog. It contains links to articles for students taking Principles of Microeconomics and Managerial Economics. It also contains links to articles about politics. The opinions here are mine. No one at VCU reviews or approves what I post.
Saturday, March 27, 2021
Are minimum wages and the Davis-Bacon Act relics of Jim Crow?
Friday, March 26, 2021
What happens when people expect demand to decrease?
Suspension of COVID vaccines => people expect demand for oil to decrease => expect price of oil to decrease in the future => decrease in the demand for oil now => decrease in the price of oil now. (WSJ, March 2021)
Friday, March 19, 2021
Thursday, March 18, 2021
Wednesday, March 17, 2021
What happens when a freeze shuts down plants that make chemicals?
Wednesday, March 10, 2021
Tuesday, March 9, 2021
Evidence for UBI
Several studies of pilot programs show that giving people small amounts of money each month really helps them. (The Best Welfare Reform: Give Poor People Cash - The Atlantic, Do the Poor Waste Transfers on Booze and Cigarettes? No) One concern about giving people money is that they will "waste" it. The studies report little evidence of waste. Instead, recipients tend to make good decisions and the money helps them pay for unexpected expenses, improves their mental health, and gives them time and security to search for and take better jobs.
The Editorial Board of the WSJ thinks that the study in Stockton is flawed and does not contain evidence that the UBI is a success. (WSJ, March 2021)
UBI stands for Universal Basic Income. UBI is the proposal that the government pay everyone a basic income. This basic income would be a guaranteed minimum for everyone and everyone would pay taxes on income greater than the guaranteed minimum.
Milton Friedman advocated for a Negative Income Tax (NIT) in the 1960s. The NIT would also guarantee a guaranteed minimum income.
Most observers agree that UBI or NIT addresses poverty more effectively and efficiently than the minimum wage.
Friday, March 5, 2021
How do producers respond to higher prices?
Farmers are planting more row crops in response to higher prices. (WSJ, March 2020) The reaction illustrates that the quantity supplied increases when price increases, all else constant.
Tuesday, March 2, 2021
Has discrimination created a profitable business opportunity for Shaq?
Shaquille O'Neal is co-founding an ad agency that promises to be "strive for a talent pool that’s 75% “black, brown, women and LGBTQ." (WSJ, March 2021) Perhaps he is has found a competitive advantage. If discriminatory employment practices by other firms make the wages of black, brown, female, and LGBTQ employees less than the wages of white, cis-gendered, straight males, Shaq's firm would have lower costs than its rivals. His statement that most firms struggle to hit a 25% target makes me wonder if discrimination is reducing wages for the employees he seeks. One way to increase the employment of minority workers is to increase the wages paid to them. I also wonder if clever lawyers are preparing to sue the firm for discrimination against white, cis-gendered, straight males.