Science Shopping: Seattle Socialists Commission New Minimum-Wage Study After Dismissing Unfavorable Results of First One

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City officials stopped funding the UW team when they didn’t like the results.

Dan Springer  reports: When a University of Washington study came out this week showing Seattle’s minimum wage has cost 5,000 jobs and is hurting low income workers, city leaders attacked the messenger –- a team of respected economists at Washington’s premiere public university.

The researchers, led by Jacob Vigdor, were hired by the city in 2014 to study the effects of Seattle’s $15 wage experiment. The contract called for five years of research. City officials stopped funding the UW team when they didn’t like the results.

“The moment we saw it was based on flawed methodology and was going to be unreliable, the Vigdor study no longer speaks for City Hall,” said Seattle City Councilwoman Kshama Sawant.

Sawant, a former economics professor at Seattle Central Community College who ran for office as a Socialist, accused the UW team of “ideologically editorializing.” She and Mayor Ed Murray then contacted Michael Reich, an economics professor at the University of California at Berkeley.

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Reich is currently co-chair of the Institute for Research on Labor and Employment. Before earning his PhD in economics from Harvard, Reich was a founding member of the Union for Radical Political Economics (URPE), a group seeking a “human-centered radical alternative to capitalism,” according to its website.

Reich has authored several studies on the effects of raising the minimum wage. They all concluded that increasing the minimum wage only helps low-skilled workers.

As soon as Seattle politicians knew the University of Washington study found raising Seattle’s minimum wage from $11 to $13 an hour led to a 9-percent cut in hours worked and an average of $125 less earned each month, they commissioned Reich to do his own study and then criticized UW’s research.

According to emails obtained by Fox News, Reich was given a deadline by Murray. His work was to be completed just before the University of Washington team announced its results. Vigdor, the director of the study, shared with city council staffers the preliminary results of the research and provided a timeline for when it would be made public. Read the rest of this entry »


Population Declining in States with Relatively High Dependence on Government

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Michael Barone  writes:  The Census Bureau’s holiday treat is its release of annual state population estimates, to be digested slowly in the new year.

The headline from this year’s release is that population growth from July 2012 to July 2013 was 0.72 percent, lower than in the two preceding years and the lowest since the Great Depression 1930s.

This reflects continuing low, below-replacement-rate birth rates and lower immigration than in 1982-2007. Net immigration from Mexico evidently continues to be zero.

The Census Bureau reports that only 4.8 million Americans moved across state lines in 2012 -- about half the percentage that did so in the boom years of the 1990s. (Thinkstock Image)

The Census Bureau reports that only 4.8 million Americans moved across state lines in 2012 — about half the percentage that did so in the boom years of the 1990s. (Thinkstock Image)

The nation’s economy may be growing again, but Americans — and potential Americans — are not acting like it. There’s a parallel here with poll results showing that majorities still believe we are in a recession that the National Bureau of Economic Research says ended in June 2009, nearly five years ago.

Sluggish population growth is matched by sluggish geographic mobility. The Census Bureau reports that only 4.8 million Americans moved across state lines in 2012 — about half the percentage that did so in the boom years of the 1990s.

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Why Texas Is Growing (and Illinois Isn’t)

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Michael Barone writes:   The Census Bureau’s holiday treat is its release of annual state-population estimates, to be digested slowly in the new year.

The headline from this year’s release is that population growth from July 2012 to July 2013 was 0.72 percent, lower than in the two preceding years and the lowest since the Great Depression 1930s. This reflects continuing low, below-replacement-rate birth rates and lower immigration than in 1982–2007. Net immigration from Mexico evidently continues to be zero.

The nation’s economy may be growing again, but Americans — and potential Americans — are not acting like it. There’s a parallel here with poll results showing that majorities still believe we are in a recession that the National Bureau of Economic Research says ended in June 2009, nearly five years ago.

Read the rest of this entry »


Obama’s 2014 War on the Poor

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More unemployment benefits and a higher minimum wage? Couldn’t be worse for struggling Americans

Michael Tanner  writes:  To put it in today’s standard D.C. terms, Democrats sure must hate poor people.

That’s silly, of course. But there’s no doubt that Democrats are preparing to push policies that are likely to hurt struggling low- and middle-income Americans.

Both the Obama administration and the Democratic leadership in Congress have announced that their top priority when Congress returns later this month will be extending unemployment benefits and raising the minimum wage. Both policies are likely to leave more Americans jobless — especially low-income workers with few skills, the very people Democrats claim they want to help most.

Take the extension of unemployment insurance. Labor economists may disagree on the extent to which unemployment benefits increase or extend spells of unemployment, but the fact that they increase the duration of unemployment and/or unemployment levels is not especially controversial. As Martin Feldstein and Daniel Altman have pointed out, “the most obvious and most thoroughly researched effect of the existing UI systems on unemployment is the increase in the duration of the unemployment spells.”

In fact, even Paul Krugman, in the days when he was an actual economist rather than a partisan polemicist, wrote in his economics textbook:

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of “Eurosclerosis,” the persistent high unemployment that affects a number of European countries.

President Obama’s former Treasury secretary Larry Summers estimated in The Concise Encyclopedia of Economics that “the existence of unemployment insurance almost doubles the number of unemployment spells lasting more than three months.”

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