Benjamin Studebaker

Yet Another Attempt to Make the World a Better Place by Writing Things

Tag: Minimum Wage

The Case for Raising the Minimum Wage to Address Labor Shortages

As we saw in the years following the 2008 recession, lots of business owners are frustrated by labor shortages. They argue that these shortages are caused by a lack of incentive to work, and propose to generate that incentive by making life more difficult for the unemployed. In this case, they argue for restoring work requirements for unemployment and eliminating the federal unemployment supplement enacted in the waning days of Trump administration. This is a highly punitive way of generating incentive, and those who support these measures often accuse our unemployed citizens of laziness. They could instead generate incentive by raising wages. A recent study from the Federal Reserve indicates that the vast majority of workers aren’t being discouraged. As long as workers anticipate that their unemployment benefits may eventually come to an end, they will accept work even when the work pays less than the benefits do. Only the workers at the very bottom of the wage distribution face an incentive problem. Today I want to discuss how the study works and what it means for the minimum wage debate.

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Why Corporate Responsibility is a Myth

People get mad at individual corporations a lot. The other week, a famous shoe company started running ads with a controversial football player in them, and that made some people very happy with the shoe company and other people very angry with it. These people wrote about the shoe company a lot, and by writing about the shoe company they gave it $43 million in free advertising. See, it didn’t matter to the shoe company which stance it took on the controversial football player–by taking any stance, it could induce the media to give it free attention, and that free attention translated into sales for the company. People thought the shoe company was taking a stand because of some kind of commitment to social responsibility–but this is a shoe company which has happily, for years, employed child labourers in sweat shops, stolen their wages, and verbally and physically abused them. But this isn’t because the shoe company is especially immoral–it’s because all companies are subject to a set of structural incentives which, by design, prevent them from taking moral considerations into account independently of their ability to contribute to revenue.

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How to Use Minimum Wage Laws to Improve Local Schools

In American towns, school systems are the backbone. Strong schools attract affluent residents. Affluent residents boost land values and median incomes. Higher land values and median incomes means higher tax revenue. Higher tax revenue means more money for schools. More money for schools means strong schools, and that means more affluent residents. It’s a virtuous circle:

What kills American towns are low income residents. Low income residents lower the amount of tax revenue local schools have per student, damaging school performance. As the schools decline, the affluent residents dry up, and that hits land values and median income, eroding tax revenue and further damaging the schools. Towns get into death spirals, where declining schools and collapsing prosperity feed off each other. Today I want to talk about how towns get thrown off this cycle, and how higher local minimum wage laws can keep them on track.

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Arguments Against Minimum Wage Increases are Weaker Than Many People Think

Today I’d like to talk about the recent University of Washington study on the effects of the minimum wage increase in Seattle.  The study claims to show that the increase in the wage from $11 an hour to $13 resulted in lower wages and job losses for workers at the bottom of the wage distribution. But this study–and the arguments surrounding it–kinda miss the point.

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Don’t Vote for the Tories: Their Manifesto Can’t Compete With Labour’s

British Prime Minister Theresa May has announced plans for a snap election on 8 June. She’s ahead in the polls (although not as far ahead as she was when I started this series), and the Conservatives may win–they may win by a lot. But they shouldn’t. So I’m continuing a blog series called “Don’t Vote for the Tories.” Each post gives you a new reason to reject the Tories at the polls this June, grounded in research and data. Previously, we’ve looked at some of issues the Conservatives have mishandled, and at the alternative on offer in Labour’s manifesto. Today we’ll be looking at the Conservative manifesto and running their promises directly against Labour’s.

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