Brad DeLong: Worthy reads on equitable growth, September 7–13, 2018

Worthy reads from Equitable Growth:

  1. Will McGrew in his latest blog post sends us to a new study, “The New Wave of Local Minimum Wage Policies: Evidence from Six Studies,” by Sylvia Allegretto, Anna Godoy, Carl Nadler, and Michael Reich, which takes a narrow look at food services and drinking places and the minimum wage. Back when David Card and Alan Krueger wrote their “Myth and Measurement” study about how the costs of rising minimum wages had been vastly overstated, many—I might even say most—U.S. economists believed that their claim that the evidence showed that recent minimum wage increases had raised rather than lowered business demand for employees was overstated. Now I believe that is no longer the case: The majority view is that employers have market power, so a minimum wage is much more like good rate regulation of a monopoly utility rather than an anti-competitive “interference” in a well-working competitive market.
  2. An oldie but very goodie from our Research Advisory Board member and working paper author Sandy Darity, Jr.: “Africa, Europe, and the Origins of Uneven Development: The Role of Slavery.” It has recently become more fashionable in history to think harder about the long-term consequences of slavery for the development of the Commercial Revolution-era transatlantic economy and then for the Industrial Revolution. Darity was there more than a decade ago: “The economic foundations of the Atlantic slave trade and [its] … role in generating European and American … growth.”
  3. Praise for Heather Boushey‘s 2016 book, Finding Time: The Economics of Work-Life Conflict, comes courtesy of the New School’s Teresa Ghilarducci in Forbes: “Economist Heather Boushey argues that solving work-family conflicts would help drive more sustainable economic growth. And Americans agree.”
  4. Yes, the relationship between the U.S. unemployment rate and the vacancy rate is back to its pre-2008 normal, but the relationship between the prime-age employment rate and the vacancy rate is not. Whether the U.S. economy is now at “full employment” is thus a very dicey and unsettled question. To understand why, read Austin Clemens and Kate Bahn’s latest “JOLTS Day Graphs: July 2018 Report Edition.”

Worthy reads not from Equitable Growth:

  1. This is very well done by the Economic Policy Institute: “Interactive: The Unequal States of America.” EPI finds that “income trends have varied from state to state, and within states. But a pattern is apparent: the growth of top 1 percent incomes.”
  2. A piece that would be very valuable in any normal political-policy environment. Alas, we do not have a normal environment. Read Robert Z. Lawrence’s “How the United States Should Confront China Without Threatening the Global Trading System,” in which he writes: “The Trump administration’s willingness to violate trade rules to maximize its negotiating leverage is undermining its most important and most legitimate objective.”
  3. As the Rise of the Robots comes closer, the issues concerning the relationship between state and market become more complicated and more fraught. Read William H. Janeway’s “American Political Economy, Disrupted,” in which he writes: “Digitalization has also opened up a new front in the age-old confrontation with the state.”
  4. Take another, deeper, more accurate look at the origins of American “scientific management” and other fads and fashions that try to shift knowledge and control to the very top of hierarchical, bureaucratic organizations by reading Caitlin Rosenthal: “How Slavery Inspired Modern Business Management.” She writes: “To move beyond denial requires not only an acknowledgment that slaveholders practiced a kind of scientific management but also a broader rethinking of deep-seated assumptions about the relationship between capitalism and control.”
  5. A good piece from one of the—alas, very few—staffers at conservative-funded organizations who regards his duty to be truthful to his readers as more important than his desire to be useful to his organization’s funders. Read Michael R. Strain, “The Economics and Emotions Behind Slow Wage Growth,” in which he writes: “Why does wage growth continue to be so tepid? As unemployment falls and the number of open jobs increases, businesses should have to increase pay in order to attract increasingly scarce available workers as well as retain the employees they have.”
  6. A good piece from a decade ago about how smart economists have been wrestling with the assumptions about human thought and action that underpin their—our—well, not quite “science” was written by Cosma Shalizi in 2007—”Foundational Dismal Science Blogging”—in which he writes: “Who knew that Reinhard Selten was the author of a dialogue on the foundations of economics?”

September 13, 2018


Brad DeLong


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