I’m currently in Denver, Colorado at an industry conference. I’m sitting through a terrible talk by ITR’s chief economist, an old white guy who is playing to a room of old white guys, and it is making me seethe. He is talking about business growth and making all sorts of jokes at the expense of states with low birth rates, nations with fewer national resources, and “millennials” – just for existing.
He also made the requisite jokes about how people hate economists. And we certainly do, when economists ignore the human costs.
The only thing that has kept me from walking out of the room is ignoring him and reading this great article about the power of positive economic change:
For years, when American policymakers have debated the minimum wage, they have debated its effect on the labor market. Economists have gone around and around, rehashing the same questions about how wage bumps for the poorest workers could reduce employment, raise prices or curtail hours. What most didn’t ask was: When low-wage workers receive a pay increase, how does that affect their lives?
Well, now that research has been done:
A $15 minimum wage is an antidepressant. It is a sleep aid. A diet. A stress reliever. It is a contraceptive, preventing teenage pregnancy. It prevents premature death. It shields children from neglect. But why? Poverty can be unrelenting, shame-inducing and exhausting. When people live so close to the bone, a small setback can quickly spiral into a major trauma. Being a few days behind on the rent can trigger a hefty late fee, which can lead to an eviction and homelessness. An unpaid traffic ticket can lead to a suspended license, which can cause people to lose their only means of transportation to work. In the same way, modest wage increases have a profound impact on people’s well-being and happiness.
But what about all those “negative externalities” of increased wages? Well:
A 2017 study co-authored by Lindsey Bullinger, an assistant professor in the School of Public Policy at Georgia Institute of Technology, found that raising the minimum wage by $1 would reduce child-neglect reports by almost 10 percent. Higher wages allow parents working in the low-wage labor market to keep the lights on and the refrigerator stocked; failing to do so can court neglect charges. “These studies show the positive externalities of increasing the minimum wage on serious outcomes, like reducing child abuse,” Bullinger said, issuing an eloquent barb at economists’ obsession with the “negative externalities” of minimum-wage hikes.
All that, and it gives people back their dignity, too. (via Kottke)