The editor on the Wall Road Journal lower extra meat than normal from my op/ed on the Nobel Prize winners. This isn’t a criticism. The Journal has its constraints and the editor advised me that the piece wanted to be shortened to suit on the web page. I might somewhat have a brief article than no article.
Nonetheless, I feel many readers may discover what was lower attention-grabbing. So right here, I’ll submit the related paragraphs. Then I’ll submit a criticism of the Card/Krueger examine on the minimal wage that was made on the time however that I forgot. (An economist jogged my memory of it on Fb.) Lastly, I’ll quote from an informative remark made by the reader of the Journal on the Journal‘s web page.
On how politicians use the Card/Krueger minimal wage examine:
Sadly, many politicians use the Card/Krueger findings a few 20-percent improve in New Jersey’s minimal wage to argue for a 107-percent improve within the federal minimal wage (from the present $7.25 an hour to $15.) In a 2015 New York Instances op/ed, although, Krueger wrote that “a $15-an-hour nationwide minimal wage would put us in uncharted waters, and threat undesirable and unintended penalties.”
On David Card’s Mariel Boatlift examine:
One other pure experiment in labor markets was the Mariel Boatlift in 1980, which rapidly expanded the Miami labor drive by 7 %. Card discovered no impact on wage charges or unemployment of unskilled non-Cuban employees within the Miami market, a discovering that bolsters the case for immigration.
On Italy’s pure experiment with unemployment insurance coverage:
Lastly, the Nobel committee’s report cites economist Rafael Lalive’s 2008 examine of an Austrian authorities extension of unemployment insurance coverage advantages from 7 months to 4 years. The profit went solely to employees above age 50. By evaluating these just under age 50 with these simply above, Lalive concluded that the huge improve had triggered folks to be unemployed for an additional 15 weeks.
The criticism I neglected:
Isn’t the largest knock on Card and Krueger that they requested concerning the results of minimal wage will increase on whole employment somewhat than on hours of labor provided and demanded, together with modifications in non-wage worker compensation?
In citing Neumark/Wascher, I implicitly cited that criticism, however ought to have ideally talked about it explicitly.
Lastly, on the WSJ website, commenter Richard Kelly said:
New Jersey quick meals eating places had two years to arrange for the minimal wage improve. They didn’t have to fireplace folks as a result of these two years allowed them to let pure attrition do the job for them. The rise had a most particular unfavourable influence on employment.
I don’t have information on this, however that is fairly believable. If you realize a serious change is coming and you’ve got 2 years to arrange for it, you received’t usually wait 2 years to behave.