Month: July 2014

More on the Minimum Wage

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minimum wageWe’ve written a lot about minimum wage hikes here at Difficult Run. Here’s another to add to the list: economist David Neumark (who has published extensively on minimum wage) has an op-ed in The Wall Street Journal arguing that minimum hikes may indeed go to low-wage workers, this very different from saying they go to low-income families. “One might think that low-wage workers and low-income families are the same,” Neumark writes. “But data from the U.S. Census Bureau show that there is only a weak relationship between being a low-wage worker and being poor, for three reasons” (reasons that are “descriptive evidence” and “not disputed by economists”):

  1. “[M]any low-wage workers are in higher-income families—workers who are not the primary breadwinners and often contribute a small share of their family’s income.”
  2. “[S]ome workers in poor families earn higher wages but don’t work enough hours.”
  3. “[A]bout half of poor families have no workers, in which case a higher minimum wage does no good.”

The amount of low-wage workers from poor families dropped from 85% in 1939 to 17% by the early 2000s due to changes in social safety nets and family structure. Evidence indicates that only 18% of the benefits of a national minimum wage of $10.10 would go to poor families, while 29% would “go to families with incomes three times the poverty level or higher.” The benefits for poor families decline to 12% at 15 dollars, while benefits for the well-off would increase to 36 percent. Neumark further explains that “most studies…fail to find any solid evidence that higher minimum wages reduce poverty.”

He concludes, “The desire to help poor and low-income families is understandable. But increasing the minimum wage is a misguided way to do it.”

CDC Reports: Children’s Health and Family Structure

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A couple new government reports have focused on the well-being of children in the United States. The first one focused on adverse family experiences[ref]Nathaniel had an excellent post about a year ago on adverse childhood experiences. Well worth the read. Note especially the impact adverse experiences have on future health and well-being.[/ref] and discovered that those “children living with neither of their parents are 2.7 times as likely as those living with both biological parents, and more than twice as likely as children living with one biological parent, to have had at least one adverse experience such as those shown in the figure below.”

What’s worse is that children “living with one parent are fifteen times as likely to have had four or more adverse experiences as those living with two biological parents, and for children in nonparental care that number rises to thirty.” It is important to point out that “researchers did not control for household income or other demographic factors, and that the reported adverse experiences, apart from financial deprivation, include those that occurred at any time in the child’s life. That means, for instance, that the many adverse experiences of children in foster care may have preceded (and led to) their being placed in foster care, or that the violence or drug use of one biological parent could have led to the child living exclusively with the other biological parent…Nevertheless, the figures are a striking illustration of how children in the care of both biological parents are most likely to escape adverse experiences.”

The second report provides a snapshot of children’s health in the United States and its relation to family structure. Overall, those in nuclear families (i.e. children “living with two parents who are married to one another and are each biological or adoptive parents to all children in the family”) fared better than those in other family structures. Children in nuclear families were least likely to be in “good,” “fair,” or “poor” health as opposed to “very good” or “excellent” health.

Percentages of Children in Good, Fair, or Poor Health by Family Structure
Percentages of Children in Good, Fair, or Poor Health by Family Structure

Data on chronic conditions and behavioral issues produced similar findings. “Although some confounding factors were controlled for…the researchers emphasize that since they simply measured family structure and child outcomes at a single point in time, their findings still cannot be used to make conclusions about causality. Prior research, they note, suggests that the arrow may go both ways…And obviously, family structure is one among many factors that matter for children’s health. In the CDC data, lower socioeconomic status (conditions of poverty or near-poverty, or parental educational attainment of no more than a high school diploma) was associated with worse health outcomes for children in every type of family, and sometimes it essentially drowned out the association between family structure and health. On the other hand, family structure and stability are associated with children’s health in many parts of the developing world, where access to health care is limited and where single-parent families are actually less likely than nuclear families to be socioeconomically disadvantaged. Teasing out all the determinants of children’s health will take more research than is currently available, but at this stage, family background seems in many cases to be one significant factor.”

Check out the full reports.

Essays on McCloskey

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Over at the Online Library of Liberty there is an excellent group of essays covering economist Deirdre McCloskey’s work on the “Bourgeois Era”:  The Bourgeois Virtues: Ethics for an Age of Commerce (2006), Bourgeois Dignity: Why Economics Can’t Explain the Modern World (2010), and the forthcoming Bourgeois Equality: How Betterment Became Ethical, 1600-1848, and Then Suspect (2015).

The full amount of essays are still in the process of being posted, but so far you can read ones by economists Don Boudreaux, Joel Mokyr, and John Nye. Boudreaux captures many of my own feelings about McCloskey’s work, while Mokyr and Nye provide some excellent feedback and criticism.

Definitely worth checking out.