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I was not at all surprised last week when the Congressional Budget Office issued a report claiming that increasing the minimum wage would cost jobs. They did not do the work themselves so much as rely on work that had been done by others. The finding is in line with standard economic thinking. Think supply and demand. When the price goes up demand goes down. So when the price of labor goes up one would expect that the demand for labor to go down. That translates into lost jobs.
So is there a problem with the CBO report? Should we be concerned with the job loss estimate? Sometimes it helps to jump a bit outside of the box. So cost for labor goes up and jobs go down. But this logic applies regardless of the wage level. Would we be arguing that we should not give the middle class a pay increase because it would cost them jobs? Would we be arguing that we should not give the CEOs a pay increase because it would cost some of them their jobs? I don’t think so. If not them why are some arguing not to increase the minimum wage because it well cost jobs?
Then the models that the CBO used just may not be quite right. A business has other options on how to recoup the extra cost of the labor due to an increase in the minimum wage. They can opt for a price increase. They can choose not to give other higher paid workers a pay increase. They can look to automation and cut jobs at all levels. They can decide to move some jobs off shore where wages are lower. Some of these results in a job loss in the United States in ways the CBO may not have considered.
Interestingly Politico reported that some Republicans suggested that instead of increasing the minimum wage we expand the earned income tax credit. This sounds like a tax increase to me. Also doesn’t that amount to the taxpayers subsidizing the companies that pay the minimum wage?
Remember also that a lower minimum wage allows me to buy a cheaper hamburger at McDonald’s. Are my hamburgers being subsidized at the expense of those who cannot make a living wage?
I am just thinking some random thoughts. I am just asking some random questions that should be considered in the debate.
This past Friday the Washington Post published an opinion piece by Charles Krauthammer titled “The myth of ‘settle science.'” In it Krauthammer takes the position the he is neither a global warming believer nor a global warming denier. But then he spend almost the entire piece attacking claims of global warming. Perhaps he feels that by taking the high ground of neutrality that someone will actually believe he has an unbiased position.
His undoing comes in the third sentence of the piece where he says:
I’ve long believed that it cannot be good for humanity to be spewing tons of carbon dioxide into the atmosphere.
He has made that statement in previous pieces. But if he believes it is so bad to spew carbon dioxide into the atmosphere then why is not proposing that we do something about the problem? His problem – doing something plays into the hands of those who believe in global warming. But again why should he care it that happens if all that carbon dioxide is a problem. Thing is he does not say why he thinks it is a problem and he does not propose a solution to the problem he agrees exists.
The rest of the opinion piece goes on with bad science and poor logic to say the least. He talks about a “pause” in global temperature rise over the last 15 years. Do a simple search on “up the down staircase” and you will see that any increase comes in fits and starts. When temperatures have be rising for 100 year looking at any 15 year period is ill advised. That is Statistics 101.
Krauthammer take joy in claiming that when any storm hits, think tropical storm Sandy, or any tornado hits that climate change enthusiasts blame global warming. I don’t know what papers he reads by what I see most times is the media asking the question and the climate change researches repeating again and again and again that no one event can be specifically be linked to global warming.
But even worst he turns around and uses the same logic he criticizes when he points out that only one hurricane hit the US in 2012, and that in 2013 the Atlantic saw the fewest hurricanes in 30 years. At the very least he should avoid using the types of arguments that he so dislikes others using.
As part of the course on energy and climate change that I’m working through on Coursera we were referred to a site listing a summary of natural disasters. Knowing the number, type and frequency of various types of natural disasters is very useful information especially when thinking about what impact climate change may have on their frequency. So making the data readily available is a good thing.
We were referred to a site called PreventionWeb that summarizes data from The International Disaster Database. My issues are not so much with the underlying database but with rather with how PerventionWeb presents their summaries of the data. Those summaries can be found from their Disaster Data & Statistics webpage.
I looked at the disaster profile for Australia. But all the profiles seem to follow the same format. The profile pages provide a series of tables and graphics that force the user to make comparisons between the various types of disasters that simply should not be made.
The underlying problem is in how a particular disaster makes it to the the underlying database. The criteria for inclusion are rather simple. The disaster makes the list if ten or more people are killed, 100 or more people are affected, a state of emergency is declared, or a call for international assistance is made. There is no economic criterion for making the list.
Clearly the last two criterion will vary in their application by country so comparisons between countries are somewhat problematic. It also creates issues when creating summaries for the world as a whole or for regions of the world.
But the bigger problem comes in comparing types of disasters. Just about any drought will affect more than 100 people. A storm usually will not until it reaches a certain severity. I’m not sure what the cutoff is for the extreme temperature disaster but suspect that once that temperature criterion is met then it must make the list. These problems mean that the table comparing the number, cost, and impact of the various types of disasters are mostly meaningless.
As if that were not enough there are clear problems in data collection and comparability. In Australia there were two Earthquake events. They had an average economic impact of a nice round 500,000.00 – I believe this is in US dollars although the table is not labeled as such. But there were 20 wildfire with an economic impact of a very precise 124,642.20. Does anyone believe that the average is known to the nearest ten cents? This is clearly false precision. I only ask that they round the numbers to the accuracy they know they have in the data. Here we can surely say that he estimate the two earthquake events was not very precise. So how can I compare that number to what appears to be a much more precise number for wildfires?
I walk away with the feeling that this is data not very well presented.