Click on WORD or PDF for full content
Robert Samuelson writes on the minimum wage. His short essay explains why there are no simple answers; just simpletons running governments.
… For starters, the minimum wage is a blunt instrument to aid the poor because it covers many workers from families that are well above the federal poverty line. By the administration’s figures, 53 percent of workers who would benefit from a higher minimum come from families with incomes above $35,000, including 22 percent with incomes exceeding $75,000.
Next, economists still disagree on the job effect. In studies — and their review of other studies — economists David Neumark and J.M. Ian Salas of the University of California at Irvine and William Wascher of the Federal Reserve conclude that higher minimums do weaken low-wage employment. Under plausible assumptions, even a small effect (say, a 1 percent job loss for each 10 percent increase in the minimum) implies nearly a million fewer jobs over three years.
But scholarly research, regardless of conclusions, may be beside the point. Businesses don’t consult studies to decide what to do. They respond based on their own economic outlook. They may not react to a higher minimum wage now as they did in the past. Two realities suggest this.
First, the proposed increase is huge. By 2016, it’s almost 40 percent. Similar gains usually have occurred when high inflation advanced all wages rapidly. The minimum mainly kept pace. That’s not true today. Compared to average wages, the proposed hike in the minimum appears to be the largest since the 1960s.
Second, businesses have been reluctant job creators. They curb hiring at the least pretext. They seem obsessed with cost control. The Great Recession and the 2008-09 financial crisis spawned so much fear that they changed, at least temporarily, behavior. Firms are more cautious. …
A column by David Brooks is more illustration of how complex these problems are. It’s why the government efforts always fail.
… If you have a primitive zero-sum mentality then you assume growing affluence for the rich must somehow be causing the immobility of the poor, but, in reality, the two sets of problems are different, and it does no good to lump them together and call them “inequality.”
Second, it leads to ineffective policy responses. If you think the problem is “income inequality,” then the natural response is to increase incomes at the bottom, by raising the minimum wage.
But raising the minimum wage may not be an effective way to help those least well-off. Joseph J. Sabia of San Diego State University and Richard V. Burkhauser of Cornell looked at the effects of increases in the minimum wage between 2003 and 2007. Consistent with some other studies, they find no evidence that such raises had any effect on the poverty rates.
That’s because raises in the minimum wage are not targeted at the right people. Only 11 percent of the workers affected by such an increase come from poor households. Nearly two-thirds of such workers are the second or third earners living in households at twice the poverty line or above. …
The Economist thinks it looks like the president will lose in the Supreme Court over his recess appointments.
TO APPOINT people to certain important posts, the president needs the “advice and consent” of the Senate. The constitution offers a small loophole, however: the president may “fill up all vacancies that may happen during the recess of the Senate, by granting commissions which shall expire at the end of their next session.” Through this loophole successive commanders-in-chief—and especially Barack Obama—have driven an 18-wheel truck.
On January 13th the Supreme Court heard arguments about the scope of the president’s power to make recess appointments. National Labour Relations Board v Noel Canning asks whether Mr Obama’s three appointments on January 4th 2012 to the NLRB, the five-member federal agency that resolves disputes between companies and workers, were constitutional. Mr Obama says that the Senate was in recess that day, so the appointments were legitimate. But under the Senate’s own rules, it was in session.
Noel Canning, a soft-drink bottler in Washington state, claims it was harmed by Mr Obama’s appointments. It lost a pay dispute with the Teamsters union when a three-member panel including two of Mr Obama’s recess appointees ruled against it. The bottler appealed, claiming that the NLRB was improperly constituted.
The court of appeals for the District of Columbiaagreed. It issued a sweeping ruling that invalidated Mr Obama’s appointments and even called into question thousands of recess appointments that dozens of presidents have issued over the centuries. …
John Fund illustrates the way the media ignore the IRS scandal and “flood the zone” with Chris Christie bridgegate coverage.
Yes, liberal bias does play a role in explaining why — as Newsbusters.org reports — the major networks have had 44 times more coverage of Chris Christie’s “Bridgegate” scandal than they have had on anything related to the IRS political-targeting scandal that began last May.
Jonathan Alter, speaking on MSNBC, has dismissed the comparison by saying that “there are not ongoing revelations [in the IRS story]. If there were ongoing revelations in the IRS matter, that would still be a story.” He made his claim only four days after news broke that the Justice Department had chosen a significant Obama donor to head its investigation of the IRS, creating the obvious perception of a conflict of interest.
But it’s also true that a large part of the difference in coverage is owing simply to the laziness of journalists, for whom anything connected to a future presidential election trumps delving deeply into more complicated topics. …
Jennifer Rubin explains why the media types are so biased.
… Beyond political bias, the great shortcomings the mainstream media have are cultural and social biases. College-educated, politically correct, well-heeled and well-spoken, unreligious and pro-choice, these are people who generally don’t look or talk like Christie, nor do they have people in their social circles who do. The only reference they may have is a character out of a Martin Scorsese movie. It’s an extreme mismatch of habits and style, in the same way that virtually none of media can personally identify with an evangelical who prays every day, goes to church weekly and takes the Bible literally. In short, they lack empathy for such people and, therefore, misjudge how others relate to them.
Just as they took George W. Bush — the reader, wartime innovator and now painter — as a rube and not intellectually curious, they take Christie’s public jousting with media and opponents as “bullying.” Do the media consider Obama a bully because he criticizes the media and says mean things about Republicans? Oh no! Not the sophisticated, urbane fellow.
Hillary Clinton can keep a “hit list,” and Obama can reward friends and excoriate enemies, but they will never be “bullies.” They are tough, determined, not “patsies” and many other admirable things, but it is Christie, the media insist, who operates with “fear” and retribution. Evidence is beside the point. Bipartisan achievement is irrelevant. It is simply self-evident to the media elite. Their expectation of a politician is someone who is TV-ready, hair-perfect, voice-modulated and emotionally muted. The bridge story only confirms their stereotype of an ethnic, Northeastern pol — one who outwits and shows up fellow journalists on a daily basis. …
Dilbert creator, Scott Adams, posts on success stigma. Our colleges are turning out economic ignoramuses.
The other day I asked aloud in this blog if there might be some sort of anti-success trend emerging in society. I think I found it.
Some folks emailed me directly (dilbertcartoonist@gmail.com) to say they believe it is a waste of time to pursue success because it is a zero-sum game. In other words, they believe they can only be successful by making someone else less successful, on the theory that there isn’t enough success in the universe for everyone to get a meaningful slice. They tell me it would be “wrong” on some level to pick the pockets of strangers for self-enrichment.
And there it is.
I doubt that sort of thinking would have existed before the massive media campaign against the “top 1%.” The power of the top 1% story is in the false impression that rich people stole the money from the poor and middle class, and therefore it would only be fair to give most of it back.
Clearly some of the financial titans are doing little more than picking pockets. But those are the exceptions. Most one-percenters are growing the economy and creating jobs. That’s obvious to people who were born in the “rising tide lifts all boats” era. And it’s obvious to anyone with a bit of economics education.
But if you are in your twenties, with no deep understanding of economics, wouldn’t you believe success is evil? That’s the dominant story of their generation. …