What Effect Did Seattle’s Increased Minimum Wage Have?

À propos of a conversation going on in comments, the City of Seattle commissioned some economists to study the city’s new, higher minimum wage. From the Washington Post:

The average hourly wage for workers affected by the increase jumped from $9.96 to $11.14, but wages likely would have increased some anyway due to Seattle’s overall economy. Meanwhile, although workers were earning more, fewer of them had a job than would have without an increase. Those who did work had fewer hours than they would have without the wage hike.

Accounting for these factors, the average increase in total earnings due to the minimum wage was small, the researchers concluded. Using their preferred method, they calculated that workers’ earnings increased by $5.54 a week on average because of the minimum wage. Using other methods, the researchers found that the minimum wage hike actually caused total weekly earnings to drop — by as much as $5.22 a week.

which is exactly what you’d expect under a conventional microeconomic explanation given elasticity of demand of labor and all other things being equal. I haven’t been able to uncover the actual study. I wonder whether these results are based on empirical results or they’re making assumptions along the lines suggested above.

What with all the other cities and states adopting higher minimum wage laws and, if Hillary Clinton is elected, a likely renewed push for a higher national minimum wage, I suspect we’ll see many, many more such studies.

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Of the United States

I want to put a question on the floor. It’s not a rhetorical question. I genuinely want to see some discussion of it.

Do you think that either Hillary Clinton or Donald Trump is capable of being president of the United States? Or just president of the people who voted for them?

I know what my opinion is. I don’t think either of them has it in them. There’s been lots of happy talk about Hillary Clinton’s ability to “reach across the aisle”, blah, blah, blah but I honestly don’t see how anybody could reasonably believe it. Her negatives have been too high for too long and her speeches continue to be highly divisive. Her supporters don’t seem them that way which confirms the point I’m raising rather than contradicting it.

And I see nothing in Donald Trump’s background that suggests that he has the ability to unify the country. My view on Trump is that he sees everything as a negotiation, floats trial balloons, and generally shoots off his mouth. The whines about him are largely hyperventilating. Besides, there will be plenty of checks on the power of a hypothetical President Trump: the Congress, the federal bureaucracy, the media, the nomenklatura of both political parties.

It has not always been so. I sincerely believe that President Obama could have been the president of the United States rather than president of the Democratic Party. He just wasn’t particularly interested in the job.

At his best George W. Bush was president of the United States—see his actions in the immediate aftermath of 9/11 for examples. He was afflicted with very bad judgment and very bad advice from his advisors—both probably the result of ideological blinders.

I could go on but you get the point. I think we’re more divided now that at any time since the American Civil War and the next four years will be worse than the last eight.

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You and Whose Army?

Mark Pfeifle’s op-ed at Time, a recapitulation of a proposal made by then-Sen. Joe Biden who’s since been frequently lauded for it, is an example of an argument I’ve been having for more than a decade. He wants to divide Iraq:

Joe Biden, it seems, was ahead of his time.

In May 2006, then-Sen. Biden and foreign policy writer Leslie Gelb proposed a plan to divide Iraq into three semi-autonomous regions along sectarian lines. At the time, many dismissed and derided the proposal. Now, a long, deadly decade later, the next American president would be wise to embrace it.

Here are the problems with the proposal. First, other than the Kurds the Iraqis don’t want to divide Iraq. The Kurds are fine with it. The Turks reject a Kurdish state. The Shi’ite Arabs and the Sunni Arabs would be pleased with a division that grants each of them the greater part of Iraq’s oil. Any reasonable division would result in two-landlocked states.

In the absence of Iraqi acceptance of division, how does Mr. Pfeifle propose that the partition be accomplished? If he proposes that we dictate a constitution to the Iraqis that’s more to our liking, why stop there? Why not dictate a constitution that guarantees minority rights while we’re at it? How will that constitution be enforced?

The proposal requires long-time occupation of Iraq, something the American people have never supported. Even in 2003.

I wish Mr. Pfeifle the best of luck with his proposal. I wonder if he knows how to use an M-16? There are some who never tire of war. I can’t help but wonder if it’s because they don’t feel its cost.

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Forum Question: the Republican National Convention

I didn’t watch the coverage of the Republican National Convention on television last week and I listened to as little of the pundit commentary on it as I could. Consequently, I didn’t participate in the Watcher’s Council Forum last week in which Council members offered their reactions to Donald Trump’s acceptance speech. I’m also ignoring the Democratic National Convention to the best of my ability and I believe I’m a happier man for it.

The Watcher’s Council Forum is here.

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An Election Like No Other

The graphic above was sampled from David Brady and Douglas Rivers’s post at the Hoover Institute on why the various predictive models probably won’t be effective in predicting the outcome of this particular and peculiar presidential election. I include it because it highlights a number of important points.

First, if Donald Trump wins Ohio, Pennsylvania, North Carolina, and Florida, he wins the election. Can he do that? Beats me.

Second, will Hillary Clinton’s divide ut regnes strategy be effective in holding the states Barack Obama carried in 2012? The Clinton Campaign certainly seems to think so.

Third, the Clinton Campaign’s strategy requires it to spend enormous amounts of money in some expensive media markets. If she is to continue that strategy, she’ll need the prodigious amounts of money she’s been raising ($350 million) and then some.

Regardless, it will be an election like no other. A man running against a woman. The combined ages of the two candidates is the greatest in American history (particularly when neither is an incumbent). Two candidates with such low approval ratings and high disapproval ratings have never faced off. The Clinton Campaign, at least, is likely to spend more money than any campaign in history.

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The View From the Trenches

In his column at the Washington Post, Robert Samuelson publishes a letter from a reader that pointedly identifies everything that Mr. Samuelson’s column has not:

I am 54. My background includes a Master’s degree in history and a Certificate in Teaching English as a second language (ESL). I have worked as a journalist and was an ESL instructor for five years at a local college before my job was downsized in 2014 due to budget cuts. Since then, I have been unable to find full-time work, even though I have been diligently networking and applying for jobs. I currently write a monthly business column for The Spartanburg Herald-Journal (for free) about employment issues and also write contracts to try to stay solvent.

Although I agree that our economic expectations were raised during the 1990s’ boom, I don’t think it is a false expectation for Americans to want good-paying, full-time jobs. Unfortunately, many of the 14 million jobs created (since the employment low-point), which you mention in your column, are low-wage, part-time service jobs which are not what people need in order to support themselves and their families. In Spartanburg, very few white-collar jobs have been created. Instead, the new jobs are in fast-food restaurants and distribution centers, which are popping up everywhere due to our low cost of land.

Every day, I read articles from national newspapers, and I am continually dismayed and angered by journalists that accept without question the government statistics of glowing successes in job creation. Whatever happened to investigative journalism? Why aren’t reporters looking beyond the statistics to the thousands of real people still suffering from long-term unemployment?

which are that

  1. GDP growth doesn’t reflect the reality of the lives of ordinary people and that will remain true as long as the lion’s share of income growth is captured by, well, the lions.
  2. The decreasing rate of unemployment (to whatever extent it’s real at all) has come through an increase in the number of minimum wage jobs in hospitality and retail rather than an increase in white collar or blue collar jobs that carry decent pay and benefits.

His feeble retort:

It’s hard not to be moved. But it’s also worth remembering that the employment situation has improved.

He still doesn’t get it.

Note the key points of Ms. Lang, the reader’s, letter. Not only does she have a college degree, she has a post-graduate degree. Neither qualify her for any of the jobs being created other than minimum wage jobs or voluntarism. The jobs created? Low wage jobs.

I’ve pointed that out before. When I was in high school and college (and dinosaurs ruled the earth), any student who wanted one could get a part-time job. Nowadays that’s impossible because adults are trying to support themselves and their families doing the jobs that young people used to perform on a part-time basis while still being supported wholly or in part by their parents.

Raising the minimum wage will only solve that problem if the minimum wage doesn’t reflect the demand for minimum wage labor. If it does it will result in fewer minimum wage jobs, a perverse outcome. More education won’t solve the problem if most of the jobs being created pay minimum wage.

What, then, is to be done? I think the solutions are to suspend the importation of workers from other countries, reducing the supply of low wage workers and the competition for jobs that pay higher wages, and to focus less attention on the top .1% of income earners and a lot more on the balance of the top decile of income earners. Many of those earners work in sectors that are highly regulated and their wages are a consequence of rent-seeking. If you can’t raise the bridge, lower the water.

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The Truman Reconstruction

I’m not entirely sure what to make of Michelle Obama’s remarks about waking up every morning in a White House built by slaves. I believe that only the facade of that White House remains, that the White House was completely gutted and rebuilt nearly 70 years ago (not by slaves), and that the present White House was only symbolically built by slaves.

When Harry and Bess Truman moved into the White House following Franklin Roosevelt’s death in office it was in falling down condition and woefully out-of-date to boot. Between that and the remodeling done by Jackie Kennedy in the 1960s it’s materially a different White House. For symbolic effect I’ll take Truman’s gutting and rebuilding the White House which coincided with his integration of the military over waking up in a White House the facade of which was partially built by slaves any day.

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Don’t Confuse Me With the Facts

I’m not going to address the meat of Peter Beinart’s complaints about Bill Clinton’s comments about Muslim immigrants in his piece at Atlantic. I do, howeer, want to remark on this:

The problem with transferring that formulation to Muslims today is that Muslims aren’t asking for benefits from the welfare state.

That’s either wrong on the facts or sophistry. The fact is that more than 90% of recent Muslim immigrants receive federal welfare in some form. In addition the rate of unemployment among the Somali refugees who came here 25 years ago was 50% for decades and is still remarkably high (25% the last I heard).

I suppose you could weasel out of that statement by claiming that they aren’t asking they’re just receiving but the facts remain the same. The Europeans are complaining about the same thing. Why do you think they’re Middle Eastern migrants are trying to get to Sweden and Germany rather than Denmark or Switzerland? They’re venue shopping; Swedish and German welfare benefits are more generous.

The only thing I’ll say about the meat of Mr. Beinart’s comments is that Donald Trump does seem to have moved the Overton Window, doesn’t it?

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The Movement

As France and Germany reel at Islamist terrorist attacks on a daily or near-daily basis, George Friedman points out something that should have been obvious at this point:

The essential problem has been a persistent misunderstanding of radical Islamism. It is a movement, not an organization. Or to be more precise, radical Islamism is a strand of Islam. How large or small it is has become the subject of a fairly pointless debate. Its size is sufficient to send American forces halfway around the world and it is capable of carrying out attacks in Europe and the U.S. Whether it is a small strand or a giant strand doesn’t matter. What matters is that it cannot be suppressed, or at least has not yet been suppressed.

Here in the United States we’ve been fortunate that we haven’t experienced what the Germans and French are experiencing.

Can we expect that to continue? It may be that we can. Our oceans continue to protect us, the demographics of the U. S. Muslim population is different from that of, say, Germany, and we’ve been lucky. However, the fear that it will not continue is what motivates remarks like Donald Trump’s famous demand that we end Muslim immigration “until we know what’s going on”.

I think that goes a step too far but I do think that it would be prudent of us to limit immigration from the Middle East and North Africa to people who’ve been thoroughly vetted which would in turn imply that those immigrants would largely be limited to people who’ve been working with the U. S. military for years in Afghanistan, Iraq, and elsewhere and their families.

I do think that we should abandon our efforts at suppressing the movement. That will remain beyond our ability as long as we eschew the means that would be required to do it which would result in our killing tens or hundreds of millions of innocents.

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Why, Oh Why?

Megan McArdle has a few good if quotidian insights in her most recent piece at Atlantic. For example, she opens:

“If Trump wins (or comes close),” writes my friend Tim Lee, “liberals are going to need a better answer than writing half the electorate off as racist.”

As the Democratic National Convention lurches off to a chaotic start, let me offer one answer: Hillary Clinton is a terrible, terrible candidate.

I feel that quite a few people are losing touch with just how awful a candidate she is and persuading themselves that she’s the best of all possible candidates. In doing so they betray an inability to read a resume and a confusion of jobs held with accomplishments.

I hope that people don’t lose track of the fact that when you vote for the lesser evil, you’re still supporting evil. You’ve just made the assessment that this is as good as it gets.

Or this:

Bill Clinton could have defeated Trump with one hand tied behind his back, a bag over his head, and a debilitating case of laryngitis. His wife is, at this point, struggling to hold even. I still think she’s a favorite to win.

The greatest likelihood is that one of three things will happen after the Democratic National Convention. Either Hillary Clinton will get a big bounce in public opinion, she’ll get a moderate bounce, or she’ll get little if any bounce.

If she gets a big bounce, I think the election is practically over. Barring some cataclysmic revelation, Trump will never recapture the lead. If she gets a moderate bounce, anything could happen—it all depends on a handful of states and we will see what we will see. If she gets little or no bounce, we may well see Donald Trump inaugurated president next January. I still think that Trump has a good chance of carrying all of the states the Mitt Romney did in 2012 while winning Ohio, Pennsylvania, and Florida, something I’ve been warning about for most of the last year.

I agree with this assessment of the state of the political parties.

Decades of “good government” reforms have systematically stripped the power that parties once had: to control money, to control committee assignments, to control how much pork politicians get to brag about to the voters back home.

That’s true as far as it goes. But it’s not true within the Congress. In Congress House Speakers and Senate Majority Leaders still wield enormous power. They control the agenda; they control committee appointments. People who have a Schoolhouse Rock view of the Congress still pooh pooh that.

My intuition is we’re either seeing the death throes of political parties as we’ve known them or a major political realignment. I just can’t tell and everything looks distorted to me right now—politics as seen through a funhouse mirror.

I think that the pillorying that even the most temperate and moderate of Republican candidates, e.g. Mitt Romney, have taken at the hands of the media, the Democrats, and absolutist Republicans has played a role. There’s a sort of Gresham’s Law at work—the bad is driving out the good.

And social media is a major contributing factor to this:

My other working theory is simply that the left committed the cardinal sin known as “reading your own press releases.” The left loved the “demographics is destiny” arguments that seemed to promise them a glorious future of uninterrupted rule.

Will that prediction fail as it has failed every time it’s been made? Or is this time really different?

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