Category: Equitablog

Should-Read: Doruk Cengiz, Arindrajit Dube, Attila Lindner, and Ben Zipperer: The effect of minimum wages on the total number of jobs: Evidence from the United States using a bunching estimator: “We estimate the total impact of the minimum wage on a ected employment by comparing the excess number of jobs just above the new minimum wage… http://www.sole-jole.org/17722.pdf

…following an increase to the reduction in the number of jobs below the minimum. Using variation in state minimum wages in the United States between 1979 and 2016, we find that, on average, the number of missing jobs paying below the new minimum during the five years following implementation closely matches the excess number of jobs paying just above minimum. This leaves the overall number of low-wage jobs essentially unchanged, while raising average earnings of workers below those thresholds.

The confidence intervals from our primary specification rule out minimum wage elasticities of total employment below -0.06, which includes estimates from the existing literature. These bunching estimates are robust to a wide set of assumption about patterns of unobserved heterogeneity such as regional differences or state-specific trends, measurement error in reported wages, and the precise definition of the wage band used in the bunching approach. Our estimates for the subset of minimum wage changes that affect a large share of workers are similar to the main estimates.

We also provide estimates for specific demographic groups that are policy-relevant or studied in the literature including: teens, women, workers without a college degree, women, and black/Hispanic workers. While the affected share of these groups vary considerably, the overall employment effect in each case is small and there is no evidence for substantial labor-labor substitution. We also do not find evidence for substitution away from routine-task intensive occupations. In contrast to the bunching-based estimates, we show that studies that estimate minimum wage effects on total employment can produce misleading inference due to spurious changes in employment higher up in the wage distribution…

Should-Read: Martin Sandbu: The minimum wage wars are heating up: “The best thing Seattle could do now is to push ahead with its full experiment… https://www.ft.com/content/365f7e10-5d72-11e7-b553-e2df1b0c3220

…while gathering data on workers (not just jobs), and then examining the extent to which real individuals the policy was meant to help have indeed been helped or hurt. Look again at the Seattle area’s overall labour market outcomes. If this is what the nasty effects of aggressive minimum wage rises look like, they are rather an encouragement to do more and more widely…

Must-Read: If you told me that the Federal Reserve had a 1.5%/year core PCE chain index inflation target, I would believe you:

In retrospect (as it was for some of us in prospect), the Federal Reserve’s decision in mid-2013 to switch from signaling that it had a bias toward further easing to a bias toward tightening, and that investors should plan to see a major tightening cycle soon, was clearly wrong. And I still see no rationale for sticking with the policy of continuing to signal that the Federal Reserve has a bias toward tightening, and that investors should plan to see a major tightening cycle soon:

Jay C. Shambaugh: On Twitter: Slowing Inflation: “More evidence of slowing inflation lately: core pce prices up just 0.1 p.p. in May. 12 month change 1.4% (down from 1.6% in 12 months prior…” https://twitter.com/JayCShambaugh/status/880804850002526208

Must-Read: I don’t think any—statistically literate—conservatives believe Medicaid is worthless. Statistically illiterate ones may, and there may be many people who have taken great care to maintain their statistical illiteracy. But the truest core argument—if, as Thomas Hobbes once translated Thoukydides, “the least in speech”—is not that Medicaid is worthless, but that the lives of those who need Medicaid are worth little, and not worth spending public money on. They may say that they believe the first—that Medicaid is worthless. But that, I believe, is, for the statistically literate and for those who have worked hard to remain statistically illiterate, pretense: what they believe is that the lives of those who need Medicaid are worth little.

Ezra Klein: Conservatives believe Medicaid is worthless, so slashing it is harmless. They’re wrong: “Expanding Medicaid saves lives at a cost of $327,000 to $867,000 per life saved… https://www.vox.com/health-care/2017/6/29/15885796/medicaid-senate-gop-health-bill-benefits-bcra

…it’s worth noting that “other public policies that reduce mortality have been found to average $7.6 million per life saved,” making Medicaid a comparative bargain. Nor are lives saved the only measure by which health insurance improves well-being…. security that you can afford medical treatment… a profound effect on psychological well-being… lift[ing] an elemental fear that hangs over daily life…. Medicaid enrollees really, really like Medicaid. A 2015 Gallup poll found that 75 percent of Medicaid enrollees were satisfied with the system—a satisfaction rate that bested enrollees in employer-sponsored insurance….

We don’t have studies measuring the effect of consistent health insurance over 10 or 20 or 30 years. We don’t know how many lives that kind of access to the medical system saves, nor how much disability it prevents, nor how much pain it eases, nor how much psychological comfort it offers. But the patients who qualify for Medicaid expansions are the patients least likely to have regular, long-term health insurance in the absence of Medicaid coverage, and so they’re the patients most likely to benefit from the payoffs of consistency, whatever those payoffs might be….

I’m very sympathetic to arguments that medical care is overvalued, and that in practice, it does less good than we hope…. But these dynamics affect all of us—Medicaid is just better studied…. The proper response to these arguments is to do a better job assessing which medical treatments work and which don’t, not to simply take health insurance away from poor people….

Let’s say you still think Medicaid is a worthless program…. Then what?… What you wouldn’t do is what the Better Care Reconciliation Act does: offer people making below-poverty wages insurance plans with $6,000 deductibles—insurance that is too expensive for them to actually use—while plowing the savings into a large capital gains tax cut for the richest Americans…

Ph’nglui mglw’nafh Cthulhu R’lyeh wgah’nagl fhtagn! Y’ai’ng’ngah Yog-Sothoth h’ee-l’geb fai throdog aaah!

Must-Read: as Eric Rauchway says, Ezra Klein is now shrill. But Ezra understates the problem. Note that there are now very, very few Republican health-care policy experts releasing their own—truly conservative—plans, or criticizing the current plan for not achieving sensible conservative goals. The radio silence from those who should be doing the heavy lifting on GOP-conservative health policy thinking is near total, and is deafening:

Ezra Klein: It turns out the liberal caricature of conservatism is correct: “It’s depressing. But it’s true: Marc Thiessen, the George W. Bush speechwriter… is aghast at the Senate GOP’s health care bill… https://www.vox.com/policy-and-politics/2017/6/29/15892504/liberal-caricature-conservatism-correct

…“Paying for a massive tax cut for the wealthy with cuts to health care for the most vulnerable Americans is morally reprehensible,” he says. “If Republicans want to confirm every liberal caricature of conservatism in a single piece of legislation, they could do no better than vote on the GOP bill in its current form.” But at what point do we admit that this isn’t the liberal caricature of conservatism? It’s just … conservatism….

Republicans had long promised the country a repeal-and-replace plan that offered better coverage at lower cost, [but] the House GOP’s health care bill cut hundreds of billions of dollars in taxes for the rich and paid for it by gutting health care spending on the poor. It was widely criticized and polled terribly. Senate Republicans responded by releasing a revised health care bill that also cut hundreds of billions of dollars in taxes for the rich and paid for it by gutting health care spending on the poor. It has also been widely criticized, and it also is polling terribly. Donald Trump, who ran on a platform of covering everyone with better health insurance than they get now, has endorsed both bills.

Republicans, in other words, have repeatedly broken their promises and defied public opinion in order to release health care bills that cut spending on the poorest Americans to fund massive tax cuts for the richest Americans. (The Tax Policy Center estimates that 44.6 percent of the Senate bill’s tax cuts go to households making more than $875,000.) If they would simply stop doing that, their health care problems would vanish: They could craft a bill that would rebuild the health care system around more conservative principles and do so without triggering massive coverage losses. But at some point, we need to take them at their word: This is what they believe, and they are willing to risk everything—their reputations, their congressional majorities, and Donald Trump’s presidency—to get it done.

And it’s not just health policy. Though Trump said he would raise taxes on people like himself during the campaign, the tax reform plan he released amounted to a massive tax cut for the richest Americans. That cut will ultimately have to be paid for, and because Republicans refuse to increase taxes to close deficits, and because they support increasing spending on the military, the only plausible way to pay for their tax cuts will be by slashing programs that serve the poor and/or the elderly. (This isn’t just hypothetical: Trump’s budget relies on massive cuts to programs that serve the poor.)

Like Thiessen, I want to see a better, more decent conservatism drive the Republican Party. I don’t want to believe that this is the bottom line of GOP policy thinking. But this is clearly the bottom line of GOP policy thinking.

Ph’nglui mglw’nafh Cthulhu R’lyeh wgah’nagl fhtagn! Y’ai’ng’ngah Yog-Sothoth h’ee-l’geb fai throdog aaah!

Should-Read: Sarah Kliff: On Twitter: “A stunning pair of charts of the CBO report from my colleague @alv9n https://t.co/nZHz8OMurV“ https://twitter.com/sarahkliff/status/879460806198538241:

Should-Read: Atul Gewande: How the Senate’s Health-Care Bill Threatens the Nation’s Health: “The Senate bill would also ultimately make people who buy insurance on the A.C.A. exchanges—people without coverage from an employer or from Medicaid—pay far more money for far worse coverage… http://www.newyorker.com/news/news-desk/how-senates-health-care-bill-threatens-nations-health

…especially if they are age fifty or older. The standard “reference” plan on the exchanges would cover barely more than half of medical costs, while cost-sharing subsidies for working-class people would be eliminated, and the level of tax credits available to them would be cut, too. The result: the median deductible would jump from the current five hundred dollars to more than six thousand dollars. The annual premium for a sixty-year-old earning fifty thousand dollars in my home town of Athens, Ohio, would triple, to fourteen thousand dollars. In many parts of the country, things would be much worse. (In Anchorage, Alaska, for example, premiums would be thirty-six thousand dollars.) The bill, in other words, promises terrible coverage at unaffordable prices. Millions of people would have to give up insurance, leaving them without protection and the entire individual-insurance market at risk of collapse.

The trade-offs here are indefensible. The bill would take a trillion dollars away from health coverage for the bottom fifty per cent of the population to give a tax cut to the top two per cent. The Center on Budget and Policy Priorities did the math: one consequence of the legislation is that three-quarters of a million people would be thrown off of the Medicaid rolls to give the four hundred highest earners in the country a thirty-three-billion-dollar tax cut. The bill would put thousands of nursing homes, clinics, and hospitals into financial trouble. And for patients it would mean more medical debts, more untreated sickness, and more deaths. A basic test of government is its ability to prevent large-scale harm to its citizens’ health and survival. This bill, and this Administration, are failing that test.

Should-Read: Is this for real? I think Erica Grieder fails the Turing test. Guys and gals at The Week: this is no way to build the reputation as a trustworthy information intermediary you need to survive as anything other than a monstrous clickbait and eyeball-glue farm:

The “losers” from ObamaCare are “young invincibles” being charged more for their insurance because of the mandate and the cross-subsidization from young to old (and who will benefit in their turn when they get old), and people who had had cheap low-quality insurance who now have much better and somewhat more costly insurance. The second group are big winners in any sensible actuarial sense. The first group are net winners as well because they will age and they will develop “preexisting conditions”.

But even if Grieder’s claims about “losers” from ObamaCare weren’t fatuous, to complain about ObamaCare because it “raises premiums and deductibles” for some and “left millions… uninsured” while providing enormous net benefits in terms of coverage, treatment, and health and then turn around and endorse BCRA which raises premiums and deductibles even more and leaves an extra 22 million uninsured…

These are the words of a TrumpBot. Not of a reporter:

Erica Grieder: The GOP’s ‘Better Care’ act is better than you think: “While the Affordable Care Act has surely helped millions of Americans… http://theweek.com/articles/707712/gops-better-care-act-better-than-think

…it has also still left millions of Americans uninsured, and many more with higher premiums and deductibles than they had in 2009, when Democrats promised that their plan would deliver precisely the opposite…. Democrats are reluctant to acknowledge that ObamaCare’s conservative critics were correct in predicting such problems, and that in some cases, at least, their objections were rooted in concern for the Americans who would be disproportionately affected by them….

There’s a lot to like about the Better Care Reconciliation Act. It’s a market-oriented plan that’s serious about the trade-offs involved in such an approach. If you want to remove some bureaucratic hurdles and government largesse from the health-care market, as many conservatives do, then some people will lose coverage, and others will see an increase in their out-of-pocket costs. That’s how markets work, even if the architects of ObamaCare refused to believe it….

Better Care is realistic, not nihlistic… recognizes that the government can and should play a role in situations where the market, if left to its own devices, has merciless implications… largely preserves the protections the 2009 law established for Americans with pre-existing conditions, and provides reinsurance for the insurers who might have balked at doing so. That was a humane and worthwhile achievement which Democrats deserve credit for, even if they are heartless monsters who left millions of Americans uninsured….

The Congressional Budget Office… found… that… the legislation would result in an additional 22 million Americans being uninsured in 2026…. The logic underlying this projection was debatable, but its political implications are clear cut. The Democrats who touted ObamaCare as a plan that would make comprehensive health insurance affordable to the average American are out of power, at the time being. But perhaps they will regain control of Congress in 2018. And if so, we can all look forward to seeing them unveil their secret plan.

If you try to untangle an argument from Grieder, is has three parts:

1. I don’t believe that the policies will have the effects that CBO thinks they will have.
2. I think BCRA removes bureaucratic hurdles! YAY!!
3. I think BCRA removes government largesse! YAY!!

But what bureaucratic hurdles does Erica Grieder believe that BCRA removes? Is it the individual mandate? But substituting a continuous-coverage provision for the individual mandate adds rather than subtracts bureaucratic complexity. And what unworthy government largesse does Erica Grieder think BCRA removes? Does she have evidence that Medicaid is currently too gold-plated, and that cutting back on Medicaid passes benefit-cost tests?