Tuesday Highlights

And so it goes (as they say … whomever constitutes “they” is not something I understand).

  1. So, you want to commit horrible crimes?
  2. Playdough law.
  3. Cui bono. I’m still confused on who benefits from this law.
  4. Re-design .. the axle?
  5. Say it ain’t so Joe, err, James. (but note … new blog)
  6. The hair makes the man, holds for other species.
  7. Snerk.
  8. A wordy math proof.
  9. Oh, joy.
  10. Gosh, I haven’t heard the President using the bully pulpit to denounce this. I’m thinking I didn’t miss it.
  11. That’s really cool.
  12. This may be a little offensive (which is kinda the point) but it does make good point about PC speech.
  13. Going off the deep end (in two ways) … the writer finds someone who went off the rails … and the does so himself. Seriously, when you write “is now how quickly adults are willing to shoot teenagers” … re-read that. Then … count the number of adults in this country. Count how many of those adults actually “quickly shoot teenagers”.  How many is that? Then make your decision, write stupid things or shut up. Alas …..
  14. Putting the IRS in its place.
  15. How the beltway will doom us all with its good intentions.

7 Responses to Tuesday Highlights

  1. Cui bono. I’m still confused on who benefits from this law.

    Missing seems to be the other side, the CBO estimate was 500K lost jobs (which was mid-range of a very wide estimate) and 1M lifted above the poverty line.

    Would the opposite trade seem like a good deal? Push 1 million people below the poverty line BUT increase jobs by half a million? I wouldn’t take that deal, which implies taking the report’s numbers at face value the min. wage increase is actually a good idea.

  2. Also Mankiw’s presentation leaves something to be desired here. He is essentially saying 71% of the benefits of raising the min. wage would accrue to families making 3 times the poverty level or less. Looking at http://kff.org/other/state-indicator/distribution-by-fpl/ 3 times the poverty level and below is the lower 67% of the population. That’s essentially the working poor and the middle class. The 29% of benefits that go to those making more than 3 times the poverty level are probably heavily weighted towards the slightly above average to upper middle class. The so called 1% by definition could not capture even 1% of the min wage increase unless everyone in the 1% held down 1 full time min. wage job.

  3. Boonton,
    The prior argument made (I think by “Marginal …” and others) is that this law hitting between 11% and 19% of those who need it is a particularly blunt tool. It was reported that a lot of this wage increase hits second dependent wage earners (kids in middle to upper class households). So you’re killing 500k jobs (by an admin that says “I think about employment every day” … apparently not in any useful substantial manner, but I digress) which primarily helps high school kids earn more in the summer and on their after hours jobs. The people arguing against min wage note that there are far more effective financial tools to target assistance to those who need without either the jobs impact or putting most of your aid where it is not needed.

    I’m unclear on your reversal as proof. A good deal benefits everyone. “Reversing” those who benefit with those who are harmed and thinking that “is bad” ergo the other side is good is flawed. “I get a bullet in the leg and you get $10″ is the deal on the table. Reverse it, still not very good. This doesn’t prove that the unreversed situation is optimal.

  4. The prior argument made (I think by “Marginal …” and others) is that this law hitting between 11% and 19% of those who need it is a particularly blunt tool.

    More like 70% of those ‘who need it’. You seem to think just because someone makes above the poverty line they are on easy street. The poverty line is set very low. Of the portion who make 4 times or more the poverty level:

    1. I suspect most of those people would be clustered closer to the ’4 X Poverty’ than far away from it (i.e. “500 X Povery”). For example, the top 1% of earners at most could only take 1% of the benefit of a min. wage hike….they could only pull that off if everyone in the top 1% was also working a min. wage job 40 hours a week or so. While I’m sure you’ll find cases of very well off families with a kid doing a min. wage job for spending money, it’s only going to be a fraction of them and even then it’s unlikely to be much since most of those cases will entail part-time min. wage work.

    2. If you’re really concerned about this, you could couple a min. wage increase with a hike in the top tax bracket that is offset by a cut in the lower tax brackets. While that would be revenue neutral, it would likely offset a good portion of ‘benefit’ you think those at the top would unfairly get from a min. wage increase.

    3. If this is the metric we are going by, then fine. First I would expect every GOP Congressman who voted for the Bush tax cuts to resign. Then we’ll go from there.

    So you’re killing 500k jobs (by an admin that says “I think about employment every day” … apparently not in any useful substantial manner, but I digress) which primarily helps high school kids earn more in the summer and on their after hours jobs.

    Except the same report says 1 million will be lifted out of poverty. So it’s not really easy to see how 500K jobs killed will hurt the poor at the expense of well off families who have high school kids working summer jobs for fun money….unless those families are just below the poverty line and the summer jobs for teens is what brings them just over.

    I’m unclear on your reversal as proof. A good deal benefits everyone.

    Suppose it was 1 million lifted out of poverty at a cost of just a single job? Even you would probably have to admit that the benefit of lifting a million out of poverty outweighs the harm of a single lost job. Just to drive the point home, you could in theory say each of the million people lifted out of poverty could donate a single dime and that would provide $100K to the person who lost the min. wage job.

    So clearly a ‘good deal’ doesn’t always benefit everyone. There are lots of deals that benefit some people greatly or benefit a lot of people a bit but harm a small number of people…sometimes very much (for example, the Iraq war supposedly benefitted us all by a very small reduction in ‘danger’ but those killed and maimed by the war got harmed hugely).

    So with that in mind let’s look at this ‘deal’. 1M lifted out of poverty, but 1/2M fewer jobs.

    OK we say the harm of losing 1/2M jobs is greater than having 1M less in poverty. By that logic the reverse should hold. If we could ‘buy’ 500K more jobs a the ‘price’ of 1M below the poverty line, then that should be a good deal.

    To see why suppose we did the increase and the CBO turns out to be dead right. 1M people come above the poverty line but there’s 500K lost jobs. By your logic then we should take repeal the increase. But if we did that would be the same as taking the ‘reverse deal’. Gaining 1/2M jobs but pushing 1M under the poverty line.

  5. Boonton,
    “4X poverty” isn’t that bad. A single person living alone making $45k doesn’t need help. A family of four making $82k isn’t “in poverty”.

    So with that in mind let’s look at this ‘deal’. 1M lifted out of poverty, but 1/2M fewer jobs.

    Ok. Let’s. So 1M lifted out of poverty (of 5-10 million affected). 500k fewer jobs … those lost jobs mainly of people formerly making minimum wage mind you. So 1 million helped. 500k completely screwed, had a job … barely above poverty, now jobless. Good deal this is not.

    But you still haven’t answered my question. Who is really benefiting? This is an attempt to aid those making min wage who are close to the poverty line. You enact a policy which affects many and of 11% to 19% (depending on the study) of those who you are targeting. Batting 100 to 200 is bad even in baseball. Since the policy *mostly* effects those who are not targeted, I suggested that the policy is actually being proposed because of those it mainly affects not the few whom it is putative meant to assist. Is this just indulgences for poverty to garner votes? Or is it benefiting a group you don’t suspect (this will for example spur the automation industry … are they the real backers, sponsors, and benefactors?). The point being those making min wage are not the primary benefactors. Who is?

  6. Ok. Let’s. So 1M lifted out of poverty (of 5-10 million affected). 500k fewer jobs … those lost jobs mainly of people formerly making minimum wage mind you. So 1 million helped. 500k completely screwed, had a job … barely above poverty, now jobless. Good deal this is not.

    That clearly can’t be, the 1M pulled above poverty is a net figure. Clearly most or all of those 500K either had other sources of income or lived in households with other sources of income. If the 500K had the min. wage job as their sole source of income then they would fall under the poverty line with the increase.

    That means the actual number pulled above is 1.5M leaving a net of 1M above or the 500K are above the line to begin with and won’t fall under it even without the min. wage job.

    But you still haven’t answered my question. Who is really benefiting? This is an attempt to aid those making min wage who are close to the poverty line. You enact a policy which affects many and of 11% to 19% (depending on the study) of those who you are targeting

    In that case the number seems closer to 71%. “Close” to the poverty line includes both those under it and those just above it.

    In your family of 4 making $84K example, chances are the min. wage job is being held by a teen or young adult, not the breadwinner in which case the ‘needs help’ question gets kind of fuzzy. If the young adult is about to leave home, it’s best to disconnect his income from mom & dads.

  7. Also I think you’re getting into a distraction with the question of whether or not the $82K per year household ‘needs help’. Why does that matter?

    Just say the figure was 1M lifted out of poverty and 0 jobs lost. Would you care then that some $82K a year people got a benefit too because maybe they had part time jobs at min. wage or a kid working? The only relevant cost here is the # of people lifted from poverty and the # of jobs it costs. Presumably if there was some better way to target the min. wage increase you could get a higher portion lifted out of poverty but then that still boils down to just comparing one benefit metric (# lifted) to one cost metric (# of jobs lost).

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