PhD-level thinking in economics
“Fed researchers: $15 minimum wage in Minneapolis and St. Paul boosted pay — but cost jobs” (MinnPost.com):
The push to raise the minimum wage to $15 an hour in both Minneapolis and St. Paul has successfully boosted the average worker’s hourly pay in both cities, but it has also led to sharp drops in the numbers of available jobs and hours worked, new research from the Federal Reserve Bank of Minneapolis has found.
Note that this is consistent with what I learned from fast food restaurant owners in Maskachusetts. Workers aren’t stupid so they cut their hours to retain eligibility for free housing, free health care, free food, and free smartphone. (See Fast-food economics in Massachusetts: Higher minimum wage leads to a shorter work week, not fewer people on welfare)
Here’s my favorite part of the article:
“Somebody who loses their job because of a minimum wage increase is going to find another job,” said UC Berkeley economist Michael Reich. “Probably not right away, they’re going to work fewer weeks per year — but they’re not going to be permanently unemployed.”
Professor Dr. Jill Biden, PhD’s colleague Professor Dr. Reich, PhD posits the existence of someone who wasn’t worth $15/hr to Employer A. In the superstar academic’s opinion, this person will be, after a period of unemployment spent playing Xbox, drinking beer, and watching TV, worth more than $15/hr to Employer B. (The worker has to produce at least some amount over $15/hr in order to be worth hiring at $15/hr.) A combination of unemployment and increased age will make the worker more valuable.
These are the technocrats pulling the levers of the U.S. economy…