Farmer accused Krugman a few years ago , but I doubt the evidence then could have been as air-tight as this :
Krugman , in his March 9 column :
“…Much of the elite defense of globalization is basically dishonest: false claims of inevitability, scare tactics (protectionism causes depressions!), vastly exaggerated claims for the benefits of trade liberalization…, hand-waving away the large distributional effects that are what standard models actually predict…The conventional case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins…But it is fair to say that the case for more trade agreements…is very, very weak. ”
Borjas , in his book “We Wanted Workers” :
“Much of the elite defense of immigration is basically dishonest: false claims of inevitability, scare tactics (if you disagree, you are a racist or a xenophobe), vastly exaggerated claims for the benefits from immigration,…hand-waving away the large distributional effects that are what standard models actually predict…The conventional case for more immigration relies on the assertion that the government could redistribute income to ensure that everyone wins…But it is fair to say that the case for more immigration…is very, very weak. ”
If a minimum wage hike is priced right it will bring in more dollars for fewer hours of work – but the employment picture doesn’t end there. The extra dollars will be diverted from purchases higher wage people might have made to buying decisions lower wage people make.
If lower wage people make exactly the same buying decisions as higher, then, the effect on employment will be null all around. The difference will be in consumption: the lower wage will consumer more and the upper less (that’s the idea).
But, consumers tend to prejudice purchases relatively more towards vendors at the same pay level. Poor people buy other poor people’s second hand cars – used car lot too pricey. Middle wage people buy off the used car lot. Higher wages put you in the showroom.
1/ll/14, NYT article “The Vicious Circle of Income Inequality” by Professor Robert H. Frank of Cornell: “… higher incomes of top earners have been shifting consumer demand in favor of goods whose value stems from the talents of other top earners. … as the rich get richer, the talented people they patronize get richer, too. Their spending, in turn, increases the incomes of other elite practitioners, and so on.” http://www.nytimes.com/2014/01/12/business/the-vicious-circle-of-income-inequality.html?src=me&_r=0
With this in mind, a minimum wage increase – if priced right – should predict a few more customers at Mickey D’s and a few less at Olive Garden. Likely that’s what we saw in Card and Krueger (1992) — studying firms with “giant” 33% labor costs no less.
Further clarification: if orange sellers and apple sellers started out charging the same price but orange sellers toyed with their price until they could get more money for fewer oranges out of apple sellers, then, businesses that apple sellers like to buy from, cabbage sellers, would suffer – but firms that orange sellers buy from, lettuce sellers, would prosper.
Giving more tax breaks to the already filthy rich will do nothing for our economy or job creation. This is because the apple and orange scenario is true but by putting more money into consumers hands, the money will get cycled many more times through the economy. This is where the economics 101 must be relearned and corrected by our new leaders. The wealthy usually hoard their wealth and do stock buy backs or off shore profits or differ capital gains. The workers spend as negative interest rates want and create more demand which creates more jobs…Hillary is too cozy with the oligarchs to change this, not Trump.
Krugman the plagiarist , again ?
Farmer accused Krugman a few years ago , but I doubt the evidence then could have been as air-tight as this :
Krugman , in his March 9 column :
“…Much of the elite defense of globalization is basically dishonest: false claims of inevitability, scare tactics (protectionism causes depressions!), vastly exaggerated claims for the benefits of trade liberalization…, hand-waving away the large distributional effects that are what standard models actually predict…The conventional case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins…But it is fair to say that the case for more trade agreements…is very, very weak. ”
Borjas , in his book “We Wanted Workers” :
“Much of the elite defense of immigration is basically dishonest: false claims of inevitability, scare tactics (if you disagree, you are a racist or a xenophobe), vastly exaggerated claims for the benefits from immigration,…hand-waving away the large distributional effects that are what standard models actually predict…The conventional case for more immigration relies on the assertion that the government could redistribute income to ensure that everyone wins…But it is fair to say that the case for more immigration…is very, very weak. ”
That , my friends , is no mere coincidence.
http://gborjas.org/2016/03/10/channeling-krugman/
I think PK might be feeling the pressure. The prospect of a President Bernie jacking up his taxes may be more than he can bear….
THIS IS A RE-WRITE BUT I THINK IT’S NEAT:
If a minimum wage hike is priced right it will bring in more dollars for fewer hours of work – but the employment picture doesn’t end there. The extra dollars will be diverted from purchases higher wage people might have made to buying decisions lower wage people make.
If lower wage people make exactly the same buying decisions as higher, then, the effect on employment will be null all around. The difference will be in consumption: the lower wage will consumer more and the upper less (that’s the idea).
But, consumers tend to prejudice purchases relatively more towards vendors at the same pay level. Poor people buy other poor people’s second hand cars – used car lot too pricey. Middle wage people buy off the used car lot. Higher wages put you in the showroom.
1/ll/14, NYT article “The Vicious Circle of Income Inequality” by Professor Robert H. Frank of Cornell: “… higher incomes of top earners have been shifting consumer demand in favor of goods whose value stems from the talents of other top earners. … as the rich get richer, the talented people they patronize get richer, too. Their spending, in turn, increases the incomes of other elite practitioners, and so on.”
http://www.nytimes.com/2014/01/12/business/the-vicious-circle-of-income-inequality.html?src=me&_r=0
With this in mind, a minimum wage increase – if priced right – should predict a few more customers at Mickey D’s and a few less at Olive Garden. Likely that’s what we saw in Card and Krueger (1992) — studying firms with “giant” 33% labor costs no less.
Further clarification: if orange sellers and apple sellers started out charging the same price but orange sellers toyed with their price until they could get more money for fewer oranges out of apple sellers, then, businesses that apple sellers like to buy from, cabbage sellers, would suffer – but firms that orange sellers buy from, lettuce sellers, would prosper.
Giving more tax breaks to the already filthy rich will do nothing for our economy or job creation. This is because the apple and orange scenario is true but by putting more money into consumers hands, the money will get cycled many more times through the economy. This is where the economics 101 must be relearned and corrected by our new leaders. The wealthy usually hoard their wealth and do stock buy backs or off shore profits or differ capital gains. The workers spend as negative interest rates want and create more demand which creates more jobs…Hillary is too cozy with the oligarchs to change this, not Trump.
“Hillary is too cozy with the oligarchs to change this, not Trump.”
LOL! Trump *is* an oligarch.
Have you read his plan for the US economy? More tax breaks for the wealthy.
Has the website “Angry Bear” officially endorsed Bernie Sanders or something?
Anna:
No, Bev is just being fanatical on the topic.