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The 2016 Democratic presidential agenda, no matter the candidate, will likely feature a call for a higher minimum wage, universal preschool, and more infrastructure spending. Maybe also free college for all, according to the Daily Beast:
Democrats lost in 2014 because they failed to have a big, bold economic message that tangibly impacts people’s lives,” said Adam Green, co-founder of the Progressive Change Campaign Committee. “People didn’t wake up on Election Day with a reason to vote.” To remedy that, Green and the PCCC are launching a new initiative designed to grab the agenda and drag the party leftward in the run-up to the 2016 election. On Wednesday morning, the group is announcing a plan to solicit what it is calling its “Big Ideas Project” with a new website, ThinkBig.Us, that will invite elected officials, policy experts, and the general public to submit and vote on the ideas they want to see the Democratic Party take control of next.
Thirty members of Congress, including Senate Democratic Leader Harry Reid and Sen. Chuck Schumer of New York, have agreed to review the proposals once they are complete. “The losses of 2014 were Democratic losses, they weren’t progressive losses.” “There is a hunger for big ideas,” said Green. “The last election, hundreds of millions of dollars were spent saying, ‘Vote against Republicans because they will do something bad,’ as opposed to offering any governing vision on what we do.” Among the ideas that Green proposed is free college education for all, something he said would motivate young people and their parents to vote in 2016.
This is exactly the kind of proposal which should make people skeptical of government. That’s right, make no demands on the higher education industry to improve affordability and value. Just open the spigot of taxpayer money to full blast. And when that happens, tuition will go up even more. Among other studies, work by Stephanie Riegg Cellini of George Washington University and Claudia Goldin of Harvard find that that aid-eligible institutions “charge much higher tuition … across all states, samples, and specifications” which suggests “institutions may indeed raise tuition to capture the maximum grant aid available.” As AEI’s Andrew Biggs has put it, “Much of federal student aid is corporate welfare for colleges.” Economist and college president Howard Bowen has described the inflationary dynamic this way: Colleges raise and then spend all the money can. And why not? Students are at an information disadvantage. They equate higher prices with higher quality and are unable to accurately gauge the value of specific institutions or programs.
Higher ed needs reform. Last month, Ramesh Ponnuru and Yuval Levin in the WaPo offered some ideas to deal with higher ed’s “higher costs, lower value, growing debt and lack of better alternatives”:
1.) To improve incentives in the student loan system, conservative reformers should place limits on currently unlimited PLUS loans for parents and graduate students, and, as the American Enterprise Institute’s Andrew Kelly has argued, require colleges to pay back a percentage of any loans on which their graduates default — giving schools more of a stake in their students’ futures. They should also create the legal space for new student-aid arrangements, including income-share agreements, by which private institutions or individuals fund a student’s education in return for a fixed share of his or her income for some period following graduation.
2.) To ease the entry of new competitors into higher education, conservatives should allow states to experiment with approaches to accreditation that look beyond the standard brick-and-mortar campus and allow credit hours to be pursued more flexibly. Sens. Mike Lee (R-Utah) and Marco Rubio (R-Fla.) have each offered promising approaches to this problem, allowing students (including those with federal loans) to accumulate credits in new and cheaper ways, using competition to put downward pressure on the cost of higher education more generally.
3.) Conservatives should also clear the way for professional certificates, apprenticeships and other paths to gaining skills for well-paid employment that do not require a college degree.4.) And finally, conservatives should help make the data the federal government possesses about the value of different degrees more available to students and parents. A federal law barring the merging of student loan records with wage and employment information should be repealed, and families should have access at least to graduation and expected-earnings data broken down by degree program. Rubio and Sen. Ron Wyden (D-Ore.) have proposed legislation along these lines
Indeed, “free college for all”, as I have written before, could adversely affect reform. Reducing costs and increasing value will require more cost-benefit transparency for students, as well as “unbundling” what colleges do. We need to rethink the delivery of knowledge and credentials, explains AEI’s Daniel K. Lautzenheiser, with reforms such as massive open online courses and competency-based education. And these disruptive innovations are best generated by outside competitors who might be crowded by a public option. More on high ed, reform check out Andrew Kelly’s essay in “Room to Grow.”
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Why aren’t things better, asks science journalist Michael Hanlon? Twitter, yes. Flying cars, no. From Aeon:
Yet there once was an age when speculation matched reality. It spluttered to a halt more than 40 years ago. Most of what has happened since has been merely incremental improvements upon what came before. That true age of innovation – I’ll call it the Golden Quarter – ran from approximately 1945 to 1971. Just about everything that defines the modern world either came about, or had its seeds sown, during this time. … The Golden Quarter was a unique period of less than a single human generation, a time when innovation appeared to be running on a mix of dragster fuel and dilithium crystals.
Hanlon’s thesis echoes one of themes of the film Interstellar where astronaut-turned-farmer Cooper wonders why mankind has stopped striving:
We used to look up at the sky and wonder at our place in the stars, now we just look down and worry about our place in the dirt. We’ve always defined ourselves by the ability to overcome the impossible. And we count these moments. These moments when we dare to aim higher, to break barriers, to reach for the stars, to make the unknown known. We count these moments as our proudest achievements. But we lost all that. Or perhaps we’ve just forgotten that we are still pioneers. And we’ve barely begun. And that our greatest accomplishments cannot be behind us, because our destiny lies above us.
To put those observations in economic terms, you are talking about a period when economic growth was about 40% faster annually than what came after. When economists talk about this growth slowdown, they usually point to how productivity growth averaged nearly 3% during the period 1947-1973 and then decelerated, as seen in this chart:
Lots of theories about why this happened. Maybe all the low-hanging fruit of innovation had been picked. Maybe all the benefits from revolutionary technologies like electricity generation and the combustion engine were played out. Maybe too much government regulation. Or maybe the problem is cultural:
Could it be that the missing part of the jigsaw is our attitude towards risk? Nothing ventured, nothing gained, as the saying goes. … . In the 1960s, new medicines were rushed to market. Not all of them worked and a few (thalidomide) had disastrous consequences. But the overall result was a medical boom that brought huge benefits to millions. Today, this is impossible. … In 1992, the Swiss genetic engineer Ingo Potrykus developed a variety of rice in which the grain, rather than the leaves, contain a large concentration of Vitamin A. Deficiency in this vitamin causes blindness and death among hundreds of thousands every year in the developing world. And yet, thanks to a well-funded fear-mongering campaign by anti-GM fundamentalists, the world has not seen the benefits of this invention.
In the energy sector, civilian nuclear technology was hobbled by a series of mega-profile ‘disasters’, including Three Mile Island (which killed no one) and Chernobyl (which killed only dozens). These incidents caused a global hiatus into research that could, by now, have given us safe, cheap and low-carbon energy. … Apollo almost certainly couldn’t happen today. That’s not because people aren’t interested in going to the Moon any more, but because the risk – calculated at a couple-of-per-cent chance of astronauts dying – would be unacceptable … Scientists and technologists were generally celebrated 50 years ago, when people remembered what the world was like before penicillin, vaccination, modern dentistry, affordable cars and TV. Now, we are distrustful and suspicious – we have forgotten just how dreadful the world was pre-Golden Quarter.
Data also show how we are starting businesses at lower rates and less likely to job hop. Demographics might be playing a role if we are indeed growing more cautious. We are a decade older, on average, today than in 1970 and perhaps more risk averse for that reason. Younger societies tend to be more dynamic, creative, and entrepreneurial, as Nobel laureate economist Gary Becker has written. And economist Robert Gordon cites demographics as one big reason when he thinks the era of fast US economic growth is over.
But there is reason for optimism, too. Maybe the “great stagnation” is really just a pause rather than a new normal (and maybe things are better than we think but our industrial-age economic stats don’t capture it). For instance: The digital revolution might really be in its early stages with its greatest impacts on our lives yet to come, as Erik Brynjolfsson and Andrew McAfee argue. They make a comparison to how it took awhile, a generation, for electric motors to boost productivity when they began to replace steam engines. Factory managers still had to figure out the best way to use this powerful new tools. Nor should we play down more recent achievements. As Hanlon concedes, “Sci-fi visions of the future often had improbable spacecraft and flying cars but, even in Blade Runner’s Los Angeles of 2019, Rick Deckard had to use a payphone to call Rachael.”
But to circle back to Hanlon’s thesis, if we are becoming less risk tolerant can we change that? Maybe. We could make it easier for entrepreneurs to start and grow innovative new businesses by removing tax and regulatory barriers and ending government favoritism for incumbents. We could change how we compensate business executives to encourage longer-term thinking. We could spend more on basic research for the blue-sky projects that business is unlikely to pursue. I also like this from Nobel laureate Edmund Phelps, who spoke last week at a Cato conference on economic growth:
Nations have to shed their corporatism and materialism and short-termism. How can that be accomplished? It’s necessary for families and schools to bring up children and educate children to appreciate a life of adventure, of exploration, of exercising curiosity, exercising imagination, exercising creativity. … The humanists have been raising a hue and cry about the need to get the classics back into the schoolroom. And I think that fits very well with the need to have that kind of education if we’re going to get spirited, intrepid innovators.
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Oil prices are now at five-year lows. From a morning note by Goldman Sachs on America’s energy windfall:
– Before the November OPEC meeting, we estimated that lower gasoline prices would be equivalent to a roughly $75bn tax cut for US households. With oil prices continuing to drop sharply, the size of the tax cut now looks likely to be $100 – $125bn.
— Based on our estimates, higher consumer spending should boost real GDP by four- to five-tenths of a percentage point over the coming year, although lower US energy production will partly offset this benefit.
— Within consumer spending, we would expect to see the largest positive effect on auto sales and (real) gasoline sales, with smaller proportional effects in other areas of spending. History suggests that higher gasoline consumption should show up quickly, while the boost to other categories of spending may take a bit longer to materialize. We see some very tentative evidence that incoming data are consistent with a positive effect from lower gasoline prices.
— Households at all income levels devote a sizable share of their budget to gasoline each year. Middle-class households devote the largest share of expenditures to gasoline. Historically, real spending on gasoline among the lowest income households has been most sensitive to changes in gasoline prices, while spending on autos has been most sensitive among upper middle- to higher-income households.
Especially good news for middle-class America, it would seem. And not just for the short term. A new CBO report looks at the long-term economic impact of the shale revolution:
On net, CBO estimates that real (inflation-adjusted) GDP will be about two-thirds of 1 percent higher in 2020 and about 1 percent higher in 2040 than it would have been without the development of shale resources. The actual effect on GDP could be higher or lower than that estimate, depending on the uncertain factors noted above—the abundance of shale resources, the fraction of those resources that will be recoverable, and the cost of developing that fraction—as well as on other considerations.
In other words, the GDP gain is about the same as the big tax reform plan that House Ways and Means Chairman Dave Camp put together this year.
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Every state would like to have its own Silicon Valley or be a destination of smart, young techies. But it’s not so simple. As economist Enrico Moretti has put it, innovation hubs “often get developed because of idiosyncratic factors like a local firm succeeds and it starts attracting more firms like that. And this creates a cluster that then becomes stronger and stronger, and that feeds on itself.” Example: Bill Gates and Paul Allen moving Microsoft from Albuquerque to their hometown of Seattle.
But states continue to try the top-down approach. And they’ve have some modest success. As Moretti notes in a new paper for the San Francisco Fed:
Financial incentives from state governments are part of a growing trend of policies designed to spur innovation clusters in specific regions. Biotechnology industry clusters in particular have benefited from these subsidies, which have boosted the number of star biotech scientists in those states by roughly 15%. Likewise, the number of biotech jobs overall has grown in states that offered incentives, although they have had little impact on salaries. Incentives have also spilled over to generate sizable effects in local service sectors.
Yet there are costs involved, so a caveat:
In terms of policy implications, it is important to keep in mind that our finding that biotech subsidies are successful at attracting star scientists and at raising local biotech employment do not necessarily imply that the subsidies are economically justified. The economic benefits to a state of providing these incentives must be weighed against their fiscal costs—for instance, the loss of tax revenues and resulting loss of public services. Our research suggests that state incentives are successful at increasing the number of jobs inside the state. Nevertheless, our results do not suggest that the social benefit—either for that state or for the nation as a whole—is larger than the cost to taxpayers, nor that incentives for innovation are the most effective way to increase jobs in a state.
There are also risks to relying too heavily on recruiting brainy millennials as opposed to developing home-grown talent. Geographer Jim Russell:
For the South, the problem boils down to education. Sun Belt cities rely too heavily on importing highly skilled labor, which undermines the upward mobility of more tenured residents. In effect, the education expenditures in the Rust Belt subsidize the low taxes in the South. Communities that rely on talent imports skimp on investing in schools, capping the upward mobility of native residents.
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One overlooked bit from the strong November jobs report was the gap between the 0.4% monthly rise in hourly earnings for all private, nonfarm workers and the 0.2% rise for private-sector production and nonsupervisory workers. The first group got a nice raise, and the second barely did better than inflation. To economist Robert Brusca, the difference between the two figures is a sign that “income distribution problems continue to plague this economy.”
Indeed, that result is what you might expect from an economy where high- and low-skills jobs are growing, but not those in the middle thanks mostly to automation. The data points — limited as they are — neatly fit with the “average is over” scenario of economist Tyler Cowen where only tech-savvy workers and managers see steadily higher wages.
Of course, there are two ways to increase your living standards. One, have more income coming in. Two, have less going out. In his recent New York Times column, Cowen focuses on how technology could reduce future income inequality, particularly by making key services more affordable. For example: health care diagnosis might be performed by online artificial intelligence, while online course could reduce education costs.
Technology also allows all those minds in emerging economies to more easily contribute to civilization’s common pool of knowledge and invention. And there is good reason to think some of those innovative new products and services will help the American middle-class and poor. Cowen:
Perhaps we are living in a temporary intermediate period when America and many other developed nations bear a lot of the costs of Chinese economic development without yet getting many of the potential benefits. For instance, China and other emerging nations are already rich enough to bid up commodity prices and large enough to drive down the wages of a lot of American middle-class workers, especially in manufacturing. Yet while these emerging economies are keeping down the costs of manufactured goods for American consumers, they are not yet innovative enough to send us many fantastic new products, the way that the United States sends a stream of new products to British or French consumers, to their benefit.
That state of affairs will probably end. Over the next few decades, we can expect China, India and other emerging nations to supply more innovations to the global economy, including to the United States. This shouldn’t be a cause for alarm. It will lead to many good things. Since the emerging economies are relatively poor, many of these innovations may benefit relatively low-income Americans. India has already pioneered techniques for cheap, high-quality heart surgery and other medical procedures, and over time such techniques may achieve a foothold in the United States. Imagine a future China producing cheaper and safer cars, a cure for some kinds of cancer, and workable battery storage for solar energy. Ordinary Americans could be much better off, and without having to work for those gains.
America should hardly be concerned that China and India are growing and advancing. Nor does it matter so much (national defense concerns aside, perhaps) where innovation comes from as long as an economy is open to using new technology and techniques. Economist Amar Bhide:
The United States is not locked into a “winner take all” race for scientific and technological leadership, and the growth of research capabilities in China and India—and thus their share of cutting-edge research—does not reduce U.S. prosperity. Indeed my analysis suggests that advances abroad will improve living standards in the U.S. Moreover, the benefits I identify are different from the conventional economist’s account whereby prosperity abroad increases opportunities for U.S. exporters. Instead, I show that cutting-edge research developed abroad benefits domestic production and consumption in the service sector.
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I have written before about the work on high-impact entrepreneurship by Magnus Henrekson and Tino Sanandaji. They find the US generates more billionaire entrepreneurs per million residents — a possibly proxy for national innovativeness — than all other advanced economies other than Hong Kong and Israel. They find that countries “with higher incomes, higher trust, lower taxes, more venture capital investment and lower regulatory burdens have higher entrepreneurship rates but less self-employment.”
In new paper that looks at why Europe generates fewer high-impact startups, the researchers make an interesting point about the difference between entrepreneurship and self-employment — and why more of the former means less of the latter — and that’s OK:
The Walmart story illustrates the impact that creative entrepreneurship can have on self-employment rates. Its growth was accompanied by, and indeed required, the replacement of thousands of smaller mom-and pop retail operations (Jia 2008). Between 1963 and 2002, when the U.S. population increased by more than 50 percent, the number of single-store retailers in the U.S. declined by over half (Basker 2007). …
It is natural that entrepreneurship reduces the small-business share of employment because each successful entrepreneurial venture results in an increase in the number of large firms. In the process of bringing new innovations to the market, entrepreneurs typically (according to some, by definition) create entirely new organisations with thousands of new high paying jobs, some of which are filled by people who otherwise would work for themselves. The effect is even stronger if the entrepreneurial firm directly competes with small businesses and reduces their share of the product market. …
Entrepreneurship is one channel through which firms based on valuable innovations or firms better organised than their competitors can increase their share of the economy. When these superior firms expand, formerly self-employed or small-business owners are replaced and absorbed into salaried employment in more efficient firms. The result is both a more prosperous economy and a lower rate of self-employment.
While I am concerned about the decline in the US startup rate, the extent to which it is explained by a decline in mom-and-pop retailers makes me slightly less worried. As analyzed by Henrekson and Sanandaji, high rates of self employment are a sign of economic weakness since taxes and regulation are impeding the ability of startups to become large, successful companies and produce both new innovations and fresh competition for large incumbents. Look at the two charts below. Taken together, they show that the nations with the highest self-employment rates (in red) also generally have among the lowest high-impact entrepreneurship rates (and the reverse):
Of course, we like all entrepreneurs. Making it easier to start a business with whatever long-term growth goals is a huge plus for America. As Ashwin Parameswaran has put it ” … we should empower the low and medium wage earners of today to become the capitalists of tomorrow whilst protecting them with a safety net that protects them as individuals rather than protecting the firms and unions that they are members of.” (Occupation licensing regulations are a particular hindrance here.) But policymakers should also consider whether tax and regulations are suppressing the rate of high-impact entrepreneurship. The more of that kind of risk taking, the better.
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One big difference between America’s K-12 education system and that of other nations is where our teachers come from. McKinsey has found that top-performing nations recruit their teachers from the top third of college students. As one report notes, school systems in Singapore, Finland, and South Korea “recruit 100% of their teacher corps from the top third” of the academic class vs. just 23% in the US.
But do students really benefit from having teachers with high academic achievement? Although the answer might seem intuitive, Eric Hanushek, Marc Piopiunik, and Simon Wiederhold make the connection in “The Value of Smarter Teachers: International Evidence on Teacher Cognitive Skills and Student Performance“:
Using student-level test score data, we find that teacher cognitive skills are an important determinant of international differences in student performance. ,,, Our results suggest that the benefits of better cognitive skills of teachers mainly accrue to students with low socioeconomic background, while parental skills are more important for students with high socioeconomic background. These results offer new insights into measures of teacher effectiveness that have previously been unavailable. … By considering international differences in student performance, the analysis here is able to identify an important role for better cognitive skill of teachers as an ingredient into teacher effectiveness. Simply put: Smarter teachers produce smarter students.
And how to get smarter teachers? McKinsey suggests improving working conditions — both physical and professional — and boosting pay:
… our market research suggests that raising the share of top-third+ new hires in high-needs schools from 14% to 68% would mean paying new teachers around $65,000 with a maximum career compensation of $150,000 per year. At current student-teacher ratios, and applied to all current teachers as well, this would cost roughly $100-290 million for the large urban district and $630 million for the average state. It would be considerably less expensive to focus such an effort on “turnaround” schools.
Along the same lines, AEI’s Rick Hess recently noted:
We spend a lot of money on a lot of teachers in the U.S. Nationally, average salaries are in the low $50,000s, which is enough to produce candidates for our 3.5 million teaching jobs — but far too low to make teaching a financially attractive option compared with other professions.
Indeed, Hess points to the impressive results of The Equity Project, a New York City middle-school charter where teachers are selectively hired and paid $125,000, not counting a 7 to 12% performance bonus. Hess: “TEP suggests that the quality of teachers might matter more for students than does the number of adults collecting a paycheck.” None of this means education reform shouldn’t also address how kids are taught, but the person doing the teaching is awfully important.
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A new OECD study on how income inequality affects economic growth would seem to support what some concerned observers — particularly on the left — have been saying, that inequality hurts growth. From the report: “New OECD research shows that when income inequality rises, economic growth falls.” Seems straightforward enough.
Here’s the problem, though: the typical left-liberal narrative is that the 1% are gobbling up all the income gains, leaving little for everyone else. And since the 99% don’t have as much to spend — the rich save too much — growth slows. But that is not what report finds: “While the overall increase in income inequality is also driven by the very rich 1% pulling away, what matters most for growth are families with lower incomes slipping behind.” And this: “In contrast, no evidence is found that those with high incomes pulling away from the rest of the population harms growth.” Don’t be surprised if this finding — which syncs with previous literature — tends to get overlooked.
Anyway, the problem seems to be with the bottom 40% of income earners having less educational opportunity, or as the OECD puts it (in a strangely passive wording), ” … people from disadvantaged social backgrounds underinvest in their education.” Now this is an international study. So maybe in some countries there is too little education funding for the poor and working class. (Then there is this oddity: the report finds inequality hurting economic growth more in such reputed egalitarian paradises as Finland, Sweden, and Norway than in the US. Indeed, Finland particularly is known for its high international test scores.}
The United States, however, spends $600 billion a year on K-12 education. And American high-school test scores have stagnated since 1970 despite a doubling of public school spending. Also, middle-class Americans who want to invest in higher education are confronted by a quadrupling in real terms of of published tuition and fees at public four-year colleges. In the US at least, how effectively we deliver education would seem to be as critical an issue as how much we spend on education. The OECD report makes a stronger case for reform rather than redistribution — and maybe less concern about what’s happening with the 1%.
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More evidence the economic impact from raising the minimum wage is hardly as benign as supporters contend. Far from it, in fact.
A new NBER working paper from Jeffrey Clemens and Michael Wither of the University of California, San Diego, suggests that the 30% increase in the average effective minimum wage over the late 2000s “reduced the national employment-to-population ratio — the share of adults with any kind of job — by 0.7 percentage point” between December 2006 and December 2012.
That works out to 14% of the total working-age decline during that period. Clemens and Wither basically looked at what happened to workers in states that were affected by federal minimum wage hikes versus what happened in states that weren’t. They also adjusted for the differing state-level impact of the Great Recession.
Now what’s particularly interesting in what Clemens and Wither found is that the minimum wage hikes made it harder for low-income workers to climb the ladder. From “The Minimum Wage and the Great Recession: Evidence of Effects on the Employment and Income Trajectories of Low-Skilled Workers“:
… we find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers. Lost income reflects contributions from employment declines, increased probabilities of working without pay (i.e., an “internship” effect), and lost wage growth associated with reductions in experience accumulation….
We also present evidence of the minimum wage’s effects on low-skilled workers’ economic mobility. We find that binding minimum wage increases significantly reduced the likelihood that low-skilled workers rose to what we characterize as lower middle class earnings. This curtailment of transitions into lower middle class earnings began to emerge roughly one year following initial declines in low wage employment. Reductions in upward mobility thus appear to follow reductions in access to opportunities for accumulating work experience.
Of course it’s strangely settled science on the left that raising the minimum wage is an unquestioned win-win all around. As Hillary Clinton said at a rally back in October, “And don’t let anybody tell you that raising the minimum wage will kill jobs. They always say that. I’ve been through this. My husband gave working families a raise in the 1990s. I voted to raise the minimum wage and guess what? Millions of jobs were created or paid better and more families were more secure.”
But this paper is one of several recently that have outlined the negative employment effect of minimum wage hikes. In “More on Recent Evidence on the Effects of Minimum Wages in the United States,” researchers David Neumark, J.M. Ian Salas, William Wascher conclude “the best evidence still points to job loss from minimum wages for very low-skilled workers – in particular, for teens.”
And the nonpartisan Congressional Budget Office find that a $10.10 federal minimum wage option would reduce total employment by about 500,000 workers, or 0.3 percent” in 2016. And although increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, according to CBO, just 19% of the $31 billion would go to families with earnings below the poverty threshold.
But, good news, there just might be a better way. Clemens and Wither on the Earned Income Tax Credit:
By contrast, analyses of the EITC have found it to increase both the employment of low-skilled adults and the incomes available to their families (Eissa and Liebman, 1996; Meyer and Rosenbaum, 2001; Eissa and Hoynes, 2006). The EITC has also been found to significantly reduce both inequality (Liebman, 1998) and tax-inclusive poverty metrics, in particular for children (Hoynes, Page, and Stevens, 2006). Evidence on outcomes with long-run implications further suggest that the EITC has tended to have its intended effects. Dahl and Lochner (2012), for example, find that influxes of EITC dollars improve the academic performance of recipient households’ children. This too contrasts with our evidence on the minimum wage’s effects on medium-run economic mobility.
Or as AEI’s Michael Strain has put it, “The EITC channels social resources to meet a social goal. And it does so a helluva lot better than the minimum wage.”
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