Archive for December, 2009

Quote Of The Day

Monday, December 28th, 2009

“My procedural complaints are somewhat more obscure.  The biggest one is that I am beginning to believe that in order to get this bill passed, the Democrats basically gutted the CBO.  Not because they were working with the CBO to get estimates–that’s the CBO’s job, to provide Congress with a cost.  But rather, because this bill was something novel in the history of legislation.  Previous Congresses wrote bills, and then trimmed them to get a better CBO score:  witness the Bush tax cut sunsets.  But the Congressional Democrats started out with a CBO score they wanted, and worked backward to the bill.  They’ve been pretty explicit about the fact that no one wants this actual bill; rather, the plan is to pass basically anything, and then go and totally rewrite it when the budget spotlight is off.  I’m not aware of any other piece of legislation that was passed this way.” — Megan McArdle on the shady methods Democrats used to pass the healthcare bill

How The Minimum Wage Harms Minorities The Most

Monday, December 14th, 2009

A while back I explained this in a post titled, “The Minority Case Against The Minimum Wage“, see here. Economist Steven Horwitz makes the same argument with less verbiage:

During his campaign for the presidency, Barack Obama promised that, in contrast to his predecessor, his presidency would be a “science presidency.” In his first year, Obama may well have taken some science more seriously than his predecessor, but one set of settled scientific research he has chosen to ignore has been the economics of the minimum wage. The result has been a nightmare for young workers, especially young workers of color.

Economic theory predicts that raising the minimum wage will cause those employees who are least productive to lose their jobs. If we raise the minimum wage from, say, $6 to $7, it’s the same thing as saying “any worker who cannot produce $7 worth of value each hour is not worth hiring.” Younger workers are, of course, among the least skilled in the economy. In addition, thanks to poor schools and historical discrimination, young workers of color are over-represented in this category. Higher minimum wages should disproportionately affect young workers and especially ones of color.

The empirical evidence to support this theoretical claim is abundant. Hundreds of studies of this relationship have been done by economists and they are nearly unanimous that higher minimum wages are associated with some level of increased unemployment among lower-skilled workers. Whatever consensus there might be among climate scientists about global warming, that among economists about minimum wage laws is at least as great. Despite what the science says, the Obama Administration supported a minimum wage increase last July.

The results are as theory predicts: unemployment among whites age 16-19 is at by far the highest rate in 10 years: 25.3% in October, up 28% from 6 months earlier and 36% from a year ago. Among African-Americans of the same age group, the unemployment rate is an intolerable 41.3%, up 19% from April and up 25% from a year earlier. The Hispanic or Latino youth unemployment rates are 35.6% (October), 26.5% (April), and 28.3% (October 2008).

The full article can be found here.

Quote Of The Day

Tuesday, December 8th, 2009

“One way to quickly improve any university would be to eliminate the bottom 25 percent of teachers and replace them with online instruction from outside the university. Maybe online instructors cannot compete with high-quality in-person professors, but they can certainly replace the worst.” — Arnold Kling