Ed Conard explains to the BBC's Linda Yueh why middle class incomes stagnated despite 50% growth in U.S. employment since 1980. ... Read More
Krugman Ignores Buyers Surplus and the Motivational Value of Status
In today’s “The Showoff Society” Paul Krugman continues to blame the drive for status among America’s most successful workers for abundant waste that yielded stagnant wage growth. Yesterday, he failed to recognize the drive for status fuels investment, risk-taking and innovation that helped spur U.S. job growth to twice the rate of Europe and three times the rate of Japan since 1980, and that the slowdown in wage growth likely resulted from open trade and immigration ... Read More
Does Rat Race Waste Resources? Krugman and I disagree
Paul Krugman demonstrates a laughable misunderstanding of economics in his blog post “Having It and Flaunting It” yesterday. He mistakenly claims “status competition…is a zero-sum game … where a lot of our economic growth has simply been wasted, doing nothing but accelerating the pace of the upper-income rat race.” The drive for status and the rat race it accelerates is not zero sum. Quite the contrary, it produces risk-taking, investment, and innovation. Would we ... Read More
Americans Much Less Concerned about Inequality than Europeans
A survey released this month by the Cologne Institute for Economic Research finds Americans are much less concerned about income inequality than Europeans. Despite similar perceptions about the distribution of income as the Germans and French, only 30 percent of Americans believe “differences in income in [their country] are too large” versus 50 percent of the Germans and 70 percent of the French. Why might Americans be much less concerned about inequality? ... Read More
June Employment Worse than it Appears
Mort Zuckerman’s claim in today’s Wall Street Journal—that an increase of 288,000 jobs in June is the result of a 523,000 drop in full-time employment offset by an 800,000 increase in part-time employment—motivated me to look more carefully at long-term employment trends since 2007. I feared opportunistic reporting of random one-month fluctuations might distort perceptions. Since 2007, the U.S. population between the ages of 20 and 65 years old has grown by about 9 ... Read More
Contrary to liberal claims, CBO concludes that labor participation will drop because of ACA’s subsidies, not from the freedom healthcare exchanges offer
Sadly, many liberals (way too many to name) are heralding a new CBO report that predicts 2.5 million full-time low-wage workers will choose to stop working as a result of increased subsidies they’ll receive from the Affordable Care Act. These advocates mistakenly claim the CBO has concluded that untethering insurance from employment will allow people to make more optimal choices about whether to work. While it’s true that enabling people to gain health insurance from ... Read More
Alan Blinder Wages War on the Facts
Alan Blinder claims “in the late 1970s, the U.S. labor markets began to turn ferociously against workers with low skills and education,” that “technology was clearly the major villain,” and that “the U.S. government piled on” by “[waging a] war on the poor.” His claims don’t square with the evidence. Since 1980, U.S. demand for labor pulled 25 million foreign born workers to its shores, predominantly low-skilled Hispanic workers. At the same time, unemployment, ... Read More
