ARNOLD KLING
August 14, 2011
The Top Political Contributors
August 11, 2011
Gender and the New Commanding Heights
August 11, 2011
Jamie Galbraith Makes an Assumption
August 11, 2011
Macroeconometrics: The Science of Hubris
August 10, 2011
Real and Nominal Bond Yields
BRYAN CAPLAN
August 14, 2011
The Effect of Thumb Sucking on Income
August 12, 2011
The Voice of Cold, Hard Truth to All Would-Be Educators
August 12, 2011
Ability, Morality, and Prosperity: A Paper and a Report
August 11, 2011
The Theory of Time and Frittering
August 10, 2011
Male Variance and the Remnants of the Gender Gap
DAVID HENDERSON
August 9, 2011
Hayek in "Unbroken", Part Two
August 8, 2011
Hayek in "Unbroken"
August 5, 2011
James Bovard on the Peace Corps
August 4, 2011
Summers Way Off on FDR and 1941
August 3, 2011
The "Amazon" Tax
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Of course, a simpler explanation may come from the fact that the minimum wage increased from $6.55 to $7.25 over the same time period, which should displace only those lowest income workers (minimum wage workers) into unemployment.
That is, we may be seeing more workers at the low-education end, but we may be seeing more workers at the high-education end, because of assortive mating.
hm. last i looked at this quantitatively the effect was depressingly weak or non-existent. i'd like to be disabused of my pessimism. can someone please give me the data? re: innovation, i think the key for the 21st century has to be more efficient coordinated mobilization and allocation of human capital, not throwing a bunch of barely-high-school-graduates into a 4 year university hoping to work magic.
coordinated mobilization: get them to live together like in silicon valley.
allocation: get them to work on real innovation with positive externalities, not various forms of arbitrage and rent seeking which are rational only from an individual perspective.
"Of course, the much-dreaded inequality is likely to continue to emerge."
Many people get concerned with inequality because it has the possibility of shifting prices higher without anything else changing.
There are few mechanisms to differentiate the prices for goods where information levels are high. Airlines can charge different prices only as long as everyone doesn't have access to good information. As soon as information levels increase prices converge.
People who have higher incomes can afford higher prices. All things being equal, when richer people can afford higher prices, prices shift upward.
A good example is CableTV. There are only so many different packages that can be designed. The Cable Company is going to choose a price that maximizes 'revenue minus costs'. If costs stay equal, but some people are willing to pay higher prices, prices will shift upwards, pricing a few (at the margin) out of the market.
The same happens in many other areas. Do a search of 'reverse imports', and you'll find a bunch of stuff.
Companies that try to pick different prices for different markets, like Pharmaceuticals, often have PR issues. Again, as information increases, and as a single price converges globally, the price can shift up as inequality increases and price some out of the market....
-p_a
I doubt health insurance is a significant factor in this; so far as I can tell, employers don't generally have to subsidize health insurance, making it a non-issue from a cost standpoint (if the employer doesn't like the cost, she doesn't have to subsidize it).
What seems much more likely is that most people working at low-wage jobs were working jobs which were inherently less productive. Those jobs added little to overall utility regardless of who worked them, placing them at or below ZMP very quickly as the value of money rose.