Daniel J. Smith
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More on Recent Evidence on the Effects of Minimum Wages in the United States — by David Neumark, J.M. Ian Salas, William Wascher feedlyPosted: October 27, 2014
A central issue in estimating the employment effects of minimum wages is the appropriate comparison group for states (or other regions) that adopt or increase the minimum wage. In recent research, Dube et al. (2010) and Allegretto et al. (2011) argue that past U.S. research is flawed because it does not restrict comparison areas to those that are geographically proximate and fails to control for changes in low-skill labor markets that are correlated with minimum wage increases. They argue that using “local controls” establishes that higher minimum wages do not reduce employment of less-skilled workers. In Neumark et al. (2014), we present evidence that their methods fail to isolate more reliable identifying information and lead to incorrect conclusions. Moreover, for subsets of treatment groups where the identifying variation they use is supported by the data, the evidence is consistent with past findings of disemployment effects. Allegretto et al. (2013) have challenged our conclusions, continuing the debate regarding some key issues regarding choosing comparison groups for estimating minimum wage effects. We explain these issues and evaluate the evidence. In general, we find little basis for their analyses and conclusions, and argue that the best evidence still points to job loss from minimum wages for very low-skilled workers – in particular, for teens.
In this video for Prager University, EconLog’s David Henderson does a splendid job explaining that minimum-wage legislation harms the very people its well-meaning proponents mean to help.
Of course, not all of its proponents are well-meaning. As David explains in a section of his 2002 book, The Joy of Freedom, some minimum-age proponents are rent-seekers who profit unjustly when government prevents competitors from under-pricing them.
“The Hard-Won Beauty of Entrepreneurship” was originally released on October 23, 2014. The original write-up is below:
Starting a business involves massive emotional and financial risks. Why do it?
“It’s all about writing your own script, controlling your destiny,” says Chris Viligante, owner and founder of Vigilante Coffee, a roasting house and wholesale bean business based in Maryland. Reason TV reached out to Chris and a few other local millenial-aged entrepeneurs to figure out what motivates them.
The answer we got was different from those offered in popular politics. For these entrepeneurs, their job is a vital source of spiritual satisfaction. They’ve aligned what they love doing with what the world is willing to pay for. And they’re authoring their own lives. As Nick Wiseman, owner of DGS Delicatessen, puts it: “This is my opportunity to actually make an imprint and do something that’s my own.”
Watch the full video above, or click below for downloadable versions. And subscribe to Reason TV’s YouTube channel for daily content like this.
Run time: About 4 minutes.
Directed and hosted by Rob Montz. Camera by Todd Krainin.