More Evidence of the Perverse Effects of the Minimum Wage

A new study from Grace Lordan, London School of Economics and David Neumark, University of California at Irvine shows the  following:

1. Increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers. 

2. An increase of the minimum wage by $1 (based on 2015 dollars) decreases the share of low-skilled automatable jobs by 0.43 percentage point. 

Reducing Corporate Income Tax would Create Jobs

A new paper from the St. Louis Federal Reserve concludes:

This paper finds that a reduction in the corporate income tax leads to moderate job creation and higher wages. In the extreme case, the elimination of the corporate income tax would reduce the non-employed population by 5.4 percent …

Yet the Obama administration's response to this has been not only to keep US corporate tax rates as the highest in the world, but to propose subjecting the foreign income of domestically based companies to US taxation as well. Now WHO is it that is driving jobs overseas?

It Pays to Be on Welfare in California. Not So Much in Texas

I recently ran across this chart which shows how employment is growing in Texas versus California  since the 2007-08 recession.



There are a number of reasons why this is happening, but consider just this one. Not working pays much better in California than it does in Texas.

In California, you would have to earn $35,000 in salary to be better off than collecting all the welfare benefits available to you (TANF, SNAP, Medicaid, WIC, TFAP etc.). In Texas that threshold is only $18,000. Half the California rate. 

Like everyone else, those on welfare respond to incentives, and the incentives to stay on welfare rather than work are much higher in California than they are in Texas.

The Magic of 50

Here's a quick intelligence quiz.

Q. Why does France have 2 1/2 times as many companies with 49 employees as with 50?

A. Because the French government commands that companies with 50 employees must create three worker councils and submit any employee terminations to those councils for approval. They must also create a formal profit sharing plan for employees.

Now the IQ quiz.

Q. What will happen in the US when Obamacare kicks in for companies with 50+ employees?

Where The Jobs Aren't

According to employment forecasts from the BLS here are the 30 occupations that are expected to experience the largest job growth between 2010 and 2020. Only 5 of them require a college degree or higher while half require a high school degree. Yet we are encouraging more and more of our young people to borrow huge sums to get higher educational credentials while allowing more and more to fail to obtain a high school diploma. Only government could take its own market research and construct policies exactly opposite to what that research suggests.

Rank	Occupation	Entry-Level Education	Jobs in 2010 (1,000s)	Jobs in 2020 (1,000s)	Increase (1,000s)
1	Registered Nurses	BA	2,737.4	3,449.3	711.9
2	Retail Salespersons	Less than HS	4,261.6	4,968.4	706.8
3	Home Health Aides	Less than HS	1,017.7	1,723.9	706.3
4	Personal Care Aides	Less than HS	861.0	1,468.0	607.0
5	Office Clerks, General	High School	2,950.7	3,440.2	489.5
6	Combined Food Preparation and Serving Workers, Including Fast Food	Less than HS	2,682.1	3,080.1	398.0
7	Customer Service Representatives	High School	2,187.3	2,525.6	338.4
8	Heavy and Tractor-Trailer Truck Drivers	High School	1,604.8	1,934.9	330.1
9	Laborers and Freight, Stock, and Material Movers, Hand	Less than HS	2,068.2	2,387.3	319.1
10	Postsecondary Teachers	Doctoral	1,756.0	2,061.7	305.7
11	Nursing Aides, Orderlies, and Attendants	High School	1,505.3	1,807.2	302.0
12	Childcare Workers	High School	1,282.3	1,544.3	262.0
13	Bookkeeping, Accounting, and Auditing Clerks	High School	1,898.3	2,157.4	259.0
14	Cashiers	Less than HS	3,362.6	3,612.8	250.2
15	Elementary School Teachers, Except Special Education	BA	1,476.5	1,725.3	248.8
16	Receptionists and Information Clerks	High School	1,048.5	1,297.0	248.5
17	Janitors and Cleaners, Except Maids and Housekeeping Cleaners	Less than HS	2,310.4	2,556.8	246.4
18	Landscaping and Groundskeeping Workers	Less than HS	1,151.5	1,392.3	240.8
19	Sales Representatives, Wholesale and Manufacturing	High School	1,430.0	1,653.4	223.4
20	Construction Laborers	Less than HS	998.8	1,211.2	212.4
21	Medical Secretaries	High School	508.7	718.9	210.2
22	Supervisors of Office and Administrative Support Workers	High School	1,424.4	1,627.8	203.4
23	Carpenters	High School	1,001.7	1,197.6	196.0
24	Waiters and Waitresses	Less than HS	2,260.3	2,456.2	195.9
25	Security Guards	High School	1,035.7	1,230.7	195.0
26	Teacher Assistants	High School	1,288.3	1,479.3	191.1
27	Accountants and Auditors	BA	1,216.9	1,407.6	190.7
28	Licensed Practical and Licensed Vocational Nurses	High School	752.3	920.8	168.5
29	Physicians and Surgeons	Doctoral	691.0	859.3	168.3
30	Medical Assistants	High School	527.6	690.4	162.9

Who Destroyed All Those Farm Jobs?

The President tells us that Bain Capital is in the business of destroying jobs. Shame on them. What I want to know is: Who destroyed all those farm jobs? How much better off would we be today if those awful people had been prevented from reallocating capital to other activities?  If only we could get rid of the tractors and combines and replace them with oxen and plows . . . .

The Hard Facts on Employment

No matter how jobs the President thinks he's "created", the hard facts are that civilian employment is less than what it was when he took office.



Source: Bureau of Labor Statistics Seasonally Adjusted December Employment