Macro Roundup

Note, 2020 update to this paper is attached

“This paper presents results from the third year of a multi-year, pre-committed research design for analyzing recent minimum wage changes. Using ACS and CPS data through 2017, we find thatrelatively large minimum wage increases reduced employment among low-skilled individuals by just over 2 percentage points. The effects of smaller increases are more variable and estimates for inflation-indexed increases tend toward moderately positive values.The effects of smaller increases are relatively more positive when we analyze the CPS. The most recently enacted minimum wage changes tend to be positively correlated with employment among low-skilled individuals, while relatively early and large increases are strongly negatively correlated with employment. Analysis of future data will be needed to determine whether this apparent difference between short- and medium-run effects is systematic.”

Jeffrey Clemens and Michael Strain, “Minimum Wage Analysis: Using a Pre-Committed Research Design: Evidence Through 2017,” American Enterprise Institute, June 2019, https://www.aei.org/wp-content/uploads/2019/06/Strain-Minimum-Wage-WP-2019.pdf

Sahil Chinoy, "Quiz: Let Us Predict Whether You’re a Democrat or a Republican,"New York Times, August 8, 2019, https://www.nytimes.com/interactive/2019/08/08/opinion/sunday/party-polarization-quiz.html

Quiz: Let Us Predict Whether You’re a Democrat or a Republican

Tell us a few details about you and we’ll guess which political party you belong to. It shouldn’t be that simple, right? We’re all complex people with a multiplicity of identities and values. But the reality is that in America today, how you answer a handful of questions is very likely to determine how you vote.

This quiz, based on recent surveys with more than 140,000 responses, presents a series of yes-or-no questions to predict whether someone is more likely to identify as a Democrat or a Republican. It captures divisions that should make you worried about the future of American democracy.

Are you black, Hispanic or Asian?

The first question is the most important: It’s about race. Asking whether someone is black, Hispanic or Asian cleaves the electorate into two groups. Those who answer “yes” lean Democratic; the others are split roughly evenly between the parties. Among those who are not black, Hispanic or Asian (mostly white people), the second most important question is whether the person considers religion important. If they answer “yes,” they are probably Republican.

It’s not just race and religion, though. Party allegiances are now also tied to education, gender and age. Americans have sorted themselves more completely and rigidly than any time in recent history.

This identity-based polarization threatens to make politics “less about what the government should do and more about what it means to be an American,” write John Sides, Michael Tesler and Lynn Vavreck in their book, “Identity Crisis.” And while President Trump did not precipitate this shift, he exploits and reinforces it with racist and xenophobic rhetoric.

Racial and religious groups aren’t monolithic, and one lesson from this project is that identities can intersect in intricate and unexpected ways. But today’s charged political climate is in large part explained by how neatly demographics divide Democrats and Republicans.

When identity aligns with party, politics gets more vicious

Sorting has occurred on both sides, but the Republican Party has tended more toward homogeneity: whiter, more Christian and more conservative. Democrats are a far more diverse party. So although the term “identity politics” is often wielded to criticize the Democrats for focusing on race and gender, Republicans are typically more susceptible to appeals based on their shared identity than Democrats, according to research by Julie Wronski and Lilliana Mason, political scientists at the University of Mississippi and the University of Maryland, College Park.

Polarization has encouraged more straight-ticket voting: Once, a voter might have chosen the Republican presidential candidate but a Democrat for the Senate, but now one’s whole ballot tends to align with one’s presidential preference. Polarization has also made voters hesitant to support politicians willing to cooperate with the other side, contributing to legislative gridlock.

Worse, the alignment of party preferences with personal identities has fostered ugly, tribal politics. It’s easier to demonize the opposing side when they look nothing like you. Voters today like their own party less than ever, but are motivated by their even stronger dislike of the other party. “It doesn’t paint a pretty picture,” Dr. Wronski said.

Can a religious, white Republican Party survive?

The partisan gap between black and white voters is the most durable and powerful split in modern American politics. Soon after President Lyndon Johnson signed the Civil Rights Act in 1964, he remarked, “I think we just delivered the South to the Republican Party for a long time to come.” He wasn’t wrong. Afterward, the Republicans courted racist white voters by opposing school and housing integration.

Among white people, religion is the most stable and important determinant of party choice. But the way religion shapes party attachment has changed. Today, the best way to sort the population of white voters is not by which religion they belong to, but by how religious they are.

The number of religious white Americans is plummeting. In the long term, that spells disaster for Republicans. “I don’t think the Republican Party right now has a sustainable business model,” said Alan Abramowitz, a political scientist at Emory University.

The party knows this. Or at least it should. After Republicans lost the 2012 election, the party leadership commissioned a report on how to move forward. One answer was clear: appeal to nonwhite and less conservative voters. But in the years since, the Republicans — led by Mr. Trump — have doubled down on white identity politics and seem to believe that their path to a majority is through gerrymandering, voter suppression or attempts to skew the census.

The relationship between education and party has flipped

College-educated white people have left the Republican Party over the past decade, but higher-income voters are, as ever, disproportionately Republican. Wealthier people tend to be more educated, too, but now these forces push in opposite directions. That complicates the traditional relationship between Democrats and the white working class.

For decades, working-class people voted for Democrats, but recently, the difference in party affiliation between the white working class and other white people has evaporated. This trend, experts say, might make it difficult for the 2020 Democratic presidential nominee to mobilize voters by appealing to working-class identity.

Some political scientists have attributed the emergent “diploma divide” to less educated white voters’ racial resentment. Dr. Sides, Dr. Tesler and Dr. Vavreck argue that during Barack Obama’s presidency, less-educated white people who may not have followed politics began to link the Democrats to progressive attitudes toward race and fled the party as a result. Even education is, in a sense, a proxy for opinions about race, the brightest line in today’s partisan conflict.

Women aren’t a voting bloc

A person’s gender is not especially good at predicting party affiliation — at least not on its own. When combined with age and marital status, though, it becomes more relevant. Seventy percent of millennial women identify with or lean toward the Democrats, according to a 2018 report from the Pew Research Center, and about 57 percent of unmarried women leaned Democratic in a 2015 Pew report.

The partisan gender gap developed in the 1980s as men drifted toward the Republican Party; it widened in the 2016 Trump versus Clinton election. Much like racial resentment explains support for Mr. Trump, researchers have found that “hostile sexism” — measured by asking questions like whether someone believes women seek to control men — is increasingly dividing the parties.

As issues like sexual assault gain prominence in the national political conversation, the combination of gender with other characteristics like age and marital status helps predict whether a voter describes himself or herself as a feminist — and that directly relates to party affiliation. Democrats are more than twice as likely as Republicans to say the country needs more work to achieve gender equality.

Partisanship can turn violent

Parties don’t just matter in elections. They affect how people identify, not just the other way around. Some people adjust their religious habits to better match their partisanship: For example, Republicans in search of other Republicans might start attending church more often. Put another way, people aren’t just sorting themselves into parties. Parties are sorting people, too, making cultural and racial rifts wider and harder to bridge.

And because partisan identities tend to be deeply held, political events rarely shake adults’ party preferences, which means the resentment from identity-based polarization probably isn’t going to spontaneously dissolve. In fact, it might get worse. Dr. Abramowitz writes in his book “The Great Alignment: Race, Party Transformation, and the Rise of Donald Trump” that polarizing forces — increased racial diversity, the waning influence of religion and the rise of partisan media — are “far from spent.”

Nathan Kalmoe, a political scientist at Louisiana State University, has examined political parties during the most divided period in American history: the Civil War. In his book “With Ballots & Bullets: Partisanship & Violence in the American Civil War,” he demonstrates how newspapers and party leaders encouraged citizens to fight by exploiting their partisan identities, fueling a war that killed 750,000 people.

Though America isn’t facing a civil war right now, he writes, “the country is in an uncomfortably similar position today,” with “racial-religious-partisan alignments, political demonization, rhetoric rejecting fair elections, and even language encouraging violence from prominent leaders, including the president.”

Americans, he says, haven’t fully appreciated the potential of party conflict — inflamed by social sorting and impetuous leadership — to devolve into “organized mass violence.” Partisanship, he says, “has extremes that we haven’t recognized.”