So Barack Obama wants to raise the federal minimum wage to $9.00 an hour from its current $7.25 level. Is this a good idea? Many bloggers and economists will argue that lower wages mean more jobs and that this relationship is mathematically fixed and a basic fact of economics. They will seek to paint a picture in which all serious or reasonable people agree that higher wages will hurt business or stifle growth. I intend to show their line of reasoning to be overly simplistic and to question this consensus.
Tag: GDP
Contraction Reaction
The United States has just now posted the worst quarterly growth figures since 2009. The United Kingdom, the country in which I study, is also experiencing economic contraction again, in what may be the start of a triple dip recession in that country. What’s going on? Let’s have a look.
Rising Sun: Japan Leads the Way
Only a few weeks ago, Shinzo Abe, leader of Japan’s centre-right Liberal Democratic Party and a noted nationalist, became prime minister for the second time. Abe has a reputation for militarism and for a revisionist attitude toward Japan’s conduct during World War II. Yet, despite those shortcomings, I am here to praise Abe today, to provide one of those rare posts about something genuinely positive that is happening right now in the world in Japan. Abe has decided to do what so many countries in the west are afraid to do–he has decided to embark upon a policy of stimulus. I’d like to look at precisely what Abe has proposed, what it can be expected to do for Japan, and what sort of lessons it has the potential to teach the rest of us.
The Fiscal Cliff: Stepping Back From the Abyss
A couple days later than perhaps would have made a decent show, Congress managed to slap together a stop-gap and avert the economic catastrophe that the CBO projected would have resulted from the fiscal cliff. So let’s get to business–what does the cliff deal do, and where does this leave us going forward?
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Stagflation: What Really Happened in the 70’s
If you argue long enough about economics, you are bound to run into the stagflation argument. The stagflation argument claims that the big state and stimulus caused high inflation, high unemployment, and poor growth during the seventies. Usually this argument is not fully argued by those who believe in it–it is merely asserted, and the rest of us are expected to accept that it is simply the case that the seventies happened that way. Today I’d like to endeavour to illustrate what actually happened in the seventies, what the real causes of stagflation were, and what sort of lessons might be pulled from it.
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Benjamin Studebaker 