Friday , December 6 2019
Home / Tag Archives: Labor market

Tag Archives: Labor market

Cowen and Cochrane are confused about price controls

Tyler Cowen and John Cochrane think that the minimum wage traces out a labor demand curve.  It does not.  There are many ways that a competitive labor market can comply with the minimum wage, and cutting employment is only one of them.  E.g., change the composition of compensation, change the work schedule, change the location of employment, etc. So labor demand could be wage-elastic but a socially costly minimum wage have no effect (or even a positive effect) on employment in a...

Read More »

“No One in Ohio Cares About Burma”: The Washington Bubble

Less than 600 Federal employees are directly accountable to the voters.  Almost a half million Federal employees live in the DC metro area and are accountable to someone who lives in the DC metro area.  Naturally, Federal agencies are sensitive to media coverage, and journalists and think tanks covering Federal matters also disproportionately live in the DC metro area. This results in groupthink, a.k.a., the Washington bubble.  Groupthink results in unnecessary errors, of which being...

Read More »

Initial Unemployment Claims in ND

Rather than simply looking at conventional measures like the unemployment rate in North Dakota, I thought it time to look at other measures to forecast, such an initial unemployment claims. There are some manipulating needed to the series but here is a look at the raw data. There clearly is a degree of seasonality and some other cyclical issues to tackle, though by and large the series is fairly stable and pretty low in terms of the level and the rate for unemployment claims....

Read More »

Does Policy Uncertainty Matter?

The Atlanta Fed along w/Bloom (Stanford) and Davis (Chicago) survey business operators and finds it does! From David Altig, Nick Bloom, Steve Davis, Brent Meyer and Nick Parker, “Tariff Worries and U.S. Business Investment, Take Two” (February): We estimate that tariff hikes and trade policy tensions lowered gross investment in 2018 by 1.2 percent in the U.S. private sector and by 4.2 percent in the manufacturing sector. A key table: This estimate takes on heightened impact given today’s...

Read More »

Measuring unemployment and labor-force participation

The underlying data from which the U.S. unemployment rate and labor-force participation rate are calculated contain numerous inconsistencies– if one of the numbers economists use is correct, another must be wrong. I’ve recently completed a research paper with Hie Joo Ahn that summarizes these inconsistencies and proposes a reconciliation. The data that everyone uses are based on a survey of selected addresses. An attempt is made to classify each adult living at that address as employed E,...

Read More »

Remembering Alan Krueger

Sadly Princeton Professor and former CEA chair Alan Krueger passed away this weekend.  Many younger economists were inspired by his insistence that economics is an empirical subject: no matter how good a theory sounds, it is not valuable unless it is confirmed with data.  He was 100% correct about that. Another of his many contributions was his editorship of Journal of Economic Perspectives which, unlike most academic journals, publishes accessible economic analyses of important topics,...

Read More »

Did Minnesota’s Minimum Wage Hikes Hit the Fast Food Sector Hard?

I don’t think so. But you be the judge: First, look at how the minimum wage and employment in limited-service restaurants have evolved over time. Figure 1: Minnesota employment in limited service restaurants, 000’s, s.a. (blue, left scale), and Minnesota minimum wage, $/hour (red, right scale). NBER defined recession dates shaded gray. Source: BLS, NBER.Figure 1 provides a cautionary note about trending variables. How about Minnesota versus Wisconsin (where there’s been no action on the...

Read More »

Wisconsin Employment Declines, Previous Revised Down

Figures released by DWD suggest a slowdown in Wisconsin. Figure 1: Wisconsin nonfarm payroll employment, from August release (green), September release (red), and October release (blue). BLS and DWD. In addition, Minnesota has (again) essentially caught up with Wisconsin in employment. Figure 2: Minnesota nonfarm payroll employment (blue) and Wisconsin (red). BLS and DWD, DEED. And if you are curious, Wisconsin is 2800 jobs down from the 250,000 new jobs promised by January 2015 (and the...

Read More »

Arkansas and Missouri Minimum Wage Increases Contextualized

Arkansas and Missouri voted to raise minimum wages. Time to worry? Here’s a graphical depiction of CPI-deflated minimum wage up to September, and into 2021. Figure 1: Minimum wage for Arkansas (blue), Missouri (red) and Minnesota (green), all in 2017$, calculated using CPI-U. Observations for 2018M10- use CPI forecasts from CBO, cubic interpolation from quarterly to monthly. Source: Github, BLS via FRED, CBO, Budget and Economic Outlook, August 2018, and author’s calculations. Notice while...

Read More »

Fragile Inferences on Minnesota Minimum Wage Effects

An informal assessment of the impact of the minimum wage change suggests a large negative impact. Appearances can be deceiving. From a forthcoming working paper by me and Louis Johnston, a graph of the log ratio of MN employment in limited service eating establishments to Wisconsin (blue, left scale), and log ratio MN/WI minimum wage (red, right scale). Figure 2: Log ratio of MN employment in limited service eating establishments to Wisconsin (blue, left scale), and log ratio MN/WI minimum...

Read More »