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The Minimum Wage Yet Again

David Neumark, J.M. Ian Salas, and William Wascher (NSW) used the same data that both ADR and DLR used. Their paper “Revisiting the Minimum Wage − Employment Debate: Throwing Out the Baby With the Bathwater?” (January, 2013. National Bureau of Economic Research Working Paper 18681). In fact, the title is too kind. ADR and DLR have apparently thrown out the baby and kept (and published) the bathwater. Continue Reading →

The Times Has Discovered That Costs Matter in Obamacare

“The Chapmans acknowledge that they are better off than many people, but they represent a little-understood reality of the Affordable Care Act.” … Perhaps this was “little-understood” by the geniuses who run the New York Times. But many economists, including me, pointed out that costs and prices would inevitably rise given the mandates and rules included in Obamacare. Continue Reading →

Marketplace MegaFail Inflation Edition

Frankly, these statements are incredibly stupid. Inflation means prices and incomes are rising at about the same rate. Any increase in salaries will just keep pace with inflation, leaving the consumer with unchanged purchasing power. The only way people who borrow can pay back with cheaper dollars is if the inflation is a complete surprise. If the inflation is expected, it will be part of the interest rate on the loan. Finally, higher housing prices? Give me a break. Even if housing prices rose, the real net wealth in your house wouldn’t change much because the higher price level would eat up the price increase. Continue Reading →