Thursday, October 17, 2013

Things I like better than the minimum wage to help low income workers

- Policies that help them find good job matches including job search assistance and unemployment insurance.

- Investment in education, particularly drop-out prevention and mid-level skills.

- Moving our public training policies closer to providing skills that firms demand. WIA has a good start on this, but efforts like apprenticeship (which don't even have to be public - or they can be private with a small public subsidy) would be good too.

- Macroeconomic policy aimed at full employment (i.e. - not the austerity we've seen since ARRA).

- I would have said job creation tax credits a couple years ago except the results I'm getting for my dissertation chapter on this policy are changing my priors... not sure what I think now. I'll report back a couple years from now.

- Early interventions like Head Start, WIC, food stamps, etc. that ensure that cognitive development of children from low-income families is not hampered by circumstances outside of their control.

- Earned income tax credit and other labor supply policies. Extended time out of the labor market can lead to a lot of human capital depreciation. Even if we think demand-side problems are the biggest problems right now, this is important for that reason.

- Repeal of a lot of stupid licensure requirements.

- Maybe not being so ridiculously lop-sided in treatment of corporate labor (unions) relative to treatment of corporate capital. I was skeptical of unions for a very long time, but Richard Freeman is starting to change my priors on that.

There's certainly others.



    Jeebus, my apologies to Gina Adams for forgetting that one!

  2. What about investing in public infrastructure (i.e., highways, railways, airports and the like), Daniel Kuehn? The last time I checked a few years ago, the United States didn't get a very good report from an engineering study about the quality of her public infrastructure...

    1. I'd say that those reports are BS made to drum up support for more projects and more jobs for engineers.

      In other countries similar institutions write similar things and place their home country close to the bottom of lists for the same purpose.

      The US has very good infrastructure for a country with low population density. It is a stupid idea to compare roads in the US to roads in say Germany or Britain where the population density is much higher.

    2. This response is a bit belated, but...

      I don't deny that interest groups lobby for greater public funding and have twisted and turned things in their reports to further their own aims.

      I do believe that you are correct to say that Britain and Germany have much higher population densities than the United States does (due to the United States being much larger physically).

      But I do think that things in the United States could be better. I don't claim to be an expert on American public infrastructure, but when I used public transportation in some parts of the United States (namely, Amtrak, which I used to visit a friend in New Jersey), I got the feeling that some stuff was really stretching the limit of its use-life, and needed upgrades.

      Would it require as much money as some say? Perhaps yes, perhaps no. But my (admittedly limited) personal observation and experience indicates that these things aren't elaborate efforts in deceitful swindling.

  3. What about annual indexation of payroll taxes to the unemployment rate (the former goes down as the latter goes up)? I saw this idea on Cullen Roche's site, though I'm sure someone has thought of it before.

    Payroll taxes take a big bite out of poor workers' income, and they also constitute a significant burden on employers (relative to the productivity they get from low income employees).

  4. Head Start has no lasting benefits. -Ed

    1. Head Start has been shown to have benefits ( Not only is it important as a child care program but it is important in getting low-income children, and particularly homeless children, up to speed with their peers. Homeless children in particular have significant cognitive and developmental delays compared to their low-income housed peers.

      And Daniel, things I like better than a minimum wage - a living wage.

    2. Kendra: There is a difference between short term and long term benefits (and it is the lasting benefits that Anonymous here is discussing):

    3. If you read the Wikipedia article you cited (and Wikipedia is not really a research source), the evidence is largely mixed. Distal outcomes are much harder to attribute to a specific source than proximal outcomes. As noted in some of the studies other factors can come into play, such as the poor performing schools that Head Start kids often go into.

    4. Well, if the evidence is mixed I don't see why some people have such a strong preference for the program.


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