I see that the EPI applauds the Washington D.C. city council’s decision to raise the minimum wage there from $8.25 to $11.50 over a three-year period and index it to inflation thereafter. ”Low wage workers across the nation need a raise,” they write.
But how many low wage workers in D.C. currently work at the minimum wage? The answer might surprise you. The most recent data shows that a mere 1% of all hourly and salaried workers in Washington D.C. were paid the minimum wage in 2012. That’s an incredibly tiny number.
And no, it’s not (just) because D.C. is a high-income city. The comparable figure for the nation as a whole was a mere 2.1%.
This makes me wonder just how much a minimum wage hike is supposed to help low-income workers. I suppose it’s possible that some very large percentage of workers is currently paid between $8.25 and $11.50 per hour, but what is the answer exactly?
The truth is that without any prodding from the federal government, employers in the United States already pay the overwhelming bulk of their workers (95.3%) somewhat more than the legal minimum. (A small fraction of workers are paid below the minimum wage — 2.6% in 2012, to be exact — and it’s hard to see how those folks would be helped by a higher minimum wage…)
So I want to know: just how many people are expected to be helped by marginal increases in the minimum wage? Is there granular-enough data on wages in the United States that we can get a good picture of that? How many work between $8.25 and, say, $10.10?
At a World Bank Symposium on Assessment for Global Learning last week Jishnu Das estimated there are in the neighborhood of 500 evaluations of education interventions underway at a cost of between 200K and 500K each. Assuming a typical cost of 300K this is $150 million dollars being spent on RCTs in just one field of development. It is hard to make the case that, of all things that could be spent on to improve global education this is the right allocation. In fact it is impossible to make the case with evidence.
That is Lant Pritchett, and do read the whole thing. As a point of reference, the Millennium Villages Project costed $120 million in its first five years.
I can’t say that I’m convinced RCTs are in a “bubble.” It’s one thing to say that spending $150 million on 500 RCTs in one area of development is not currently justified (or can’t be justified) on the basis of evidence — it’s another thing to say that it’s too many. How do I know (or does anyone know) that 500 is too many? Maybe we are headed for a bubble, but we’ll get to 5,000 ongoing RCTs before that collapses down to 500, a reasonable number. There are something like 200 countries after all, and quite a lot of things worth evaluating in each — student enrollment, student attendance, and teacher attendance; outcomes including test scores, income, and employment; and, as Lant knows well, there could be any number of kinds of project design, and randomized trials can be used by implementing agencies to identify the best ones. Maybe 500 RCTs in education is too few.
Lant seems to admit as much when he notes (linking to the above paper) that:
My modest contribution to this is that “Its all about MeE” (with Jeff Hammer and Salimah Samji) which proposes radically more randomization by using project implementation to “crawl the design space” to discover how to do what the implementing organization wants to do (as Jed Friedman suggests in his recent blog).
…but I don’t know how to square that with the view that “in 2013 RCTs are now in an overvaluation bubble and nearing the Peak of Inflated Expectations.”
I am convinced however that a meta-theory of RCTs is needed — how exactly are they supposed to affect development policy and practice, and separate “nails” from screws (projects that are worthy of randomized evaluation, vs. projects that are not)? Lant has a lot of good things to say about that, so go read his post.
If you are a woman who undertakes the journey, you will almost certainly be raped, perhaps many times. Maybe this will happen when your are misdirected into an ambush in La Arrocera (near the beginning of the trail), perhaps it will happen on the train, perhaps it will happen when you are kidnapped and held on a ranch with hundreds of others whilst your relatives wire a ransom to the gangs, perhaps near the US border where a “bra tree” displays the underwear of victims as the rapists’ trophies.
From Chris Bertram’s excellent review of Oscar Martinez’s The Beast: Riding the Rails and Dodging Narcos on the Migrant Trail. And that bit about hundreds of people being tortured while their relatives wire money to the kidnappers — that is not a phenomenon specific to Mexico.
You might be tempted to think that kidnapping, rape, murder, and exploitation on the migrant trail have nothing to do with U.S. immigration policy — isn’t this just what happens in Mexico? — but you’d be mistaken:
Your problem is that the few places you might cross are the same few places that the drug mules can get across: everybody is funnelled into the same dangerous spaces, towards the Arizona desert where you can perish in the heat or the Rio Grande which may well drown you.
…The system of closed borders exposes the desperate and vulnerable to predators on the road: it is a system that the democratic publics of the West have willed.
Read the whole thing.
To some extent this is already happening:
Tax preparers won’t act as insurance brokers themselves. Instead, they are partnering with commercial online health marketplaces to ease enrollment.
For example, Jackson Hewitt is working with the online marketplace Getinsured to enroll people. Jackson Hewitt will calculate subsidies and potential penalties and, if customers choose, transmit that information to Getinsured. If the Jackson Hewitt customer wants to buy coverage, all she’ll need to do is pick an insurance plan. Jackson Hewitt can even fill out all the paperwork for people to enroll in Medicaid. It says it will not charge for any of these insurance-related services.
Because Jackson Hewitt has 2800 locations in Walmart stores, it could be an especially important link to the uninsured.
H&R Block announced in September that it is partnering with the commercial online health exchange GoHealth to help people enroll through Block-branded online chat and phone support…
Intuit has created a product called TurboTax Health to assist buyers and has entered into its own partnership with the commercial online marketplace eHealth Inc.
Combined, these three firms alone claim to help file nearly 50 million returns—making them a huge potential portal for insurance buyers. The IRS estimates that about two-thirds of low-income taxpayers use paid preparers–many use walk-in firms such as Block and Jackson Hewitt. And Haile estimates that 90 percent of the uninsured get refunds. He predicts these individuals will be far more interested in buying insurance with those refunds in-hand than they are today, when they are focused on holiday shopping.
That’s the Tax Policy Center’s Howard Gleckman writing. Howard goes on to say that “Using tax prep firms as a link into the health insurance market won’t solve all the problems of the Affordable Care Act,” which is true, but at least the still-mostly-privatized aspects of the health system created by the law might save it from its immediate problem, which is a lack of enrollees.
Related: amazingly, 48% of early visitors to ObamaCare.gov did not enroll because they weren’t sure they could afford it. Unlike the 37% of visitors who didn’t get a plan because of “technical difficulties,” these visitors can’t be convinced to enroll by the fact that the website is merely functioning. They need to feel like the plan is affordable, and they are nearly half of the people who first visited the site. Tax preparers should be able to address their concerns, especially around April/May, when low-income and uninsured taxpayers are flush with refunds.
…liberals’ proudest achievement, the modern welfare state, tends to resist, corrupt and baffle their efforts at comprehensive reform.
This was the message of Jonathan Rauch’s book “Government’s End,” which was first published in the Clinton era, and which I’ve recommended before as essential to understanding liberalism’s struggles in the Obama years. Because our government spends and regulates so much, Rauch argued, because its influence sprawls into so many walks of life, because so many clients and beneficiaries and interest groups depend on its programs and policies, the policy status quo is far harder to dislodge today than it was during the Progressive Era or the New Deal or the Great Society.
This status quo bias is structural rather than ideological; it frustrates limited-government conservatives as well as liberal technocrats. But the frustration has been much more acute and ironic for Democrats, who find themselves handcuffed by the very achievements they aspire to emulate, and attacked by the beneficiaries of yesterday’s liberal programs when they attempt to propose programs for tomorrow.
He’s applying this idea to the trials of Obamacare, but other possible examples of what I’m calling “unwitting liberal conservatism” would include (most) liberals’ reluctance (or at least disinterest) to reform housing policy (Fannie, Freddie, the mortgage interest deduction), disability insurance, the federal minimum wage, marginal income taxes, trade policy, and federal funding for higher education.
Addendum: Immigration, too.
Here is a brilliant short talk (<10 minutes) by Hans Rosling about poverty, development, industrialisation, and education all in one. It’s called “The Magic Washing Machine.” I have no comment, except to suggest you watch it:
Steve Horwitz draws some useful lessons for libertarians from this video.
LearnLiberty has a helpful video on this:
Stevan Duke and Albert Gross have an excellent discussion of the potency effect in America’s Longest War, and Edward M. Brecher has offered a very thorough history of prohibition’s effect on heroin use in Licit and Illicit Drugs. The latter is available on Amazon for just 50 cents at time of writing, the former just 14 cents. They are older books, but history hasn’t changed.
Bharadwaj, Lakdawala, and Li (BLL) say that banning child labor in India led to more children working, for longer hours, and for lower pay:
While bans against child labor are a common policy tool, there is very little empirical evidence validating their effectiveness. In this paper, we examine the consequences of India’s landmark legislation against child labor, the Child Labor (Prohibition and Regulation) Act of 1986. Using data from employment surveys conducted before and after the ban, and using age restrictions that determined who the ban applied to, we show that child wages decrease and child labor increases after the ban. These results are consistent with a theoretical model building on the seminal work of Basu and Van (1998) and Basu (2005), where families use child labor to reach subsistence constraints and where child wages decrease in response to bans, leading poor families to utilize more child labor. The increase in child labor comes at the expense of reduced school enrollment. We also examine the effects of the ban at the household level. Using linked consumption and expenditure data, we find that along various margins of household expenditure, consumption, calorie intake and asset holdings, households are worse off after the ban.
An ungated version of this paper by BLL can be found here, the 1998 paper by Basu and Van is here [pdf], and the 2005 paper by Basu is here.
And here is a photo I took in India this past summer, on a construction site, where children of both genders could often be seen either working or idling:
Thirty-eight percent of children under the age of 2 have used mobile devices, including iPhones, tablets and Kindles, up from 10 percent in 2011, according to a survey by Common Sense Media, a nonprofit focused on advocating on behalf of children.
Source, and for you sample-size hawks out there the margin of error for the full sample of zero-to-eight-year-olds (not the under-two subsample) is +/- 3%. Eighty percent of kids aged two to eight have used mobile devices; they seem to be playing games, mostly, though 30% of all kids aged zero to eight have at least tried to use them for reading books.
Throw this on the pile of evidence suggesting that our inequality data sucks (at least in part because it’s not changed much since 1963).
Then there’s this:
the American Academy of Pediatrics (AAP) has advised parents to fight this trend by limiting screen time. In fact, for children under two, the AAP recommends no screen time at all.