November 15, 2024

Economix Blog: What Economists Think About Raising the Minimum Wage

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

As Christina D. Romer wrote in a column on Sunday, there is some disagreement among economists about the prudence of raising the minimum wage. The Initiative on Global Markets at the University of Chicago’s Booth School of Business recently queried a panel of 38 economic experts on the subject, and the responses were mixed, particularly about the effect on low-skilled job seekers. (Nancy Folbre mentioned this survey in passing in her weekly post; here are the fuller findings.)

These were the responses to the first question, which dealt with whether raising the minimum wage would make it more difficult for low-skilled workers to find jobs.

Source: IGM Economic Experts Panel. Source: IGM Economic Experts Panel.

As you can see, of those who responded, about a quarter said they were “uncertain” about the proposition. Exactly zero percent said they either agreed or disagreed “strongly.”

It’s no wonder there’s so much expert uncertainty on this question, given the contentious and tangled literature on the subject. Twenty years ago, a groundbreaking study by Alan Krueger (now chairman of President Obama’s Council of Economic Advisers) and David Card was the first to use empirical data to study an increase in the minimum wage. It found that raising the wage did not reduce employment. Repeat studies since then have had more mixed results, and some have shown negative, though generally small, employment effects.

Ask economists about whether raising the minimum wage is worth the potential risks to low-skilled workers, though, and the responses tend to be much more favorable to a minimum-wage increase:

Source: IGM Economic Experts Panel. Source: IGM Economic Experts Panel.

Nearly half of the panelists agreed or strongly agreed that the benefits of raising the minimum wage and indexing it to inflation outweighed the costs. In the comments section, several of the economists mentioned that other policies, like the earned income tax credit, might be better suited to addressing the needs of low-income workers. Professor Romer had mentioned this in her column, as well.

These responses do not necessarily reflect the beliefs of all economists, the way a traditional poll might aim to be; rather, the panelists are among the more elite members of their profession and were selected to represent some of the better-known conservative, liberal, young and old scholars. They include Nobel laureates, John Bates Clark Medal recipients, Econometric Society fellows, past presidents of both the American Economic Association and American Finance Association, past Democratic and Republican members of the President’s Council of Economic Advisers, and editors of leading economic journals. A full list of the respondents and their comments can be found at the IGM Forum Web site.

Article source: http://economix.blogs.nytimes.com/2013/03/04/what-economists-think-about-raising-the-minimum-wage/?partner=rss&emc=rss

John McAfee Plays Hide-and-Seek in Belize

DANIEL GUERRERO promised during his campaign for mayor here to clean up San Pedro, the only town on this island, a 20-minute puddle jump from the mainland. But if he ever runs for re-election, don’t expect him to mention that vow.

“I meant clean up the trash, the traffic, that sort of thing,” he says. “I didn’t mean this.”

“This” is a full-blown international media frenzy and the kind of mess that no politician could have seen coming. It started on Nov. 11, the morning that Gregory Faull, a 52-year-old American, was found dead, lying face up in a pool of blood in his home. He had been shot in the head. His laptop and iPhone were missing. A 9-millimeter shell was found nearby.

What happened next turned this from a local crime story to worldwide news: The police announced that a “person of interest” in the investigation was a neighbor, John McAfee, a Silicon Valley legend who years ago earned millions from the computer virus-fighting software company that still bears his name.

A priapic 67-year-old, with an improbable mop of blond-highlighted hair and a rotating group of young girlfriends, Mr. McAfee quickly melted into the island’s lush green forest. Then, for Belizean authorities, the real embarrassment began.

Asserting his innocence, Mr. McAfee became a multiplatform cyberdissident, with a Twitter account, and a blog at whoismcafee.com with audio links, a comments section, photographs and a stream of invective against the government and the police of Belize. He has done interviews on podcasts, like the “Joe Rogan Experience,” and offered a $25,000 reward for information leading to the arrest of “the person or persons” who killed Mr. Faull. He has turned lamming it into a kind of high-tech performance art.

“I am asking all people of conscience to read this blog, especially the links in the ‘Background’ section,’ and see the ugly truth unfolding here,” he posted on Nov. 18. “Speak out. Write your congressmen. Write the prime minister. Do what you can.”

Before he went underground, Mr. McAfee led a noisy, opulent and increasingly stressful life here. He was known for the retinue of prostitutes who he says moved in and out of his house, and for employing armed guards, some of whom stood watch on the beach abutting his house. He also kept a pack of untethered dogs on his property who barked at and sometimes bit passers-by.

Two days before the murder, someone had poisoned a handful of those dogs. As it happens, Mr. Faull had complained about the animals, as well as the guards and the constant late-night inflow and outflow of taxis on the dirt path that runs behind his and Mr. McAfee’s homes — a path so tiny that it’s supposed to be off-limits to cars.

Mr. Faull had shown up at the town council office a few weeks ago with a letter decrying the din and the dogs, as well as Mr. McAfee’s guns and behavior. Nothing came of it.

“We were planning to meet with John McAfee and hand him the letter,” Mr. Guerrero said. “But it never happened. We were busy doing other work.”

In hindsight, that looks like a blunder. Mr. McAfee has since said on his blog that he had no choice but to flee because police and politicians in Belize are corrupt and eager to kill him. As proof, he has written at length about a late April raid that the country’s Gang Suppression Unit conducted at a property of his on the mainland, in a district called Orange Walk.

Some McAfee watchers have a different theory — namely, that he grew paranoid and perhaps psychotic after months of experimenting with and consuming MDPV, a psychoactive drug. These experiments were described in detail by Mr. McAfee himself, under the pseudonym “Stuffmonger” in a forum on Bluelight, a Web site popular with drug hobbyists.

So, here’s one hypothesis: Rich man doses himself to madness while seeking sexual bliss through pharmacology. Then shoots neighbor in a rage. Case closed, right? Ah, but those Bluelight posts were a ruse, Mr. McAfee would later blog, just one of the many pranks he has perpetrated over the years — part of a bet with a friend to see if he could create Bluelight’s largest-ever thread.

Article source: http://www.nytimes.com/2012/12/02/business/john-mcafee-plays-hide-and-seek-in-belize.html?partner=rss&emc=rss

Bucks: Pew Feature Illustrates Banks’ Transaction Infractions

An arm of the Pew Charitable Trusts have been gaining some traction with its campaign to get banks to disclose fees associated with checking accounts in clear, simple language. One bank practice that Pew thinks is especially important for banks to clearly explain is the order in which they process transactions, which can affect the number of fees you pay if you overdraw your account.

To help illustrate the problem, Pew’s Safe Checking in the Electronic Age project has created an interactive feature, dubbed “Transaction Infraction.” The tool lets you toggle between two screens that show you how the way in which a bank orders your transactions can greatly increase the fees you will pay. (The example is taken from an actual court case, Gutierrez vs. Wells Fargo Bank).

On the first screen, you can see what happens when the 12 transactions were processed chronologically. Mr. Gutierrez ends up with a negative balance of about $45, and a single $22 fee.

On the second screen, you can see the order in which Wells Fargo actually processed the same transactions. The result is a negative balance of nearly $112, and four fees, totaling $88.

Banks have typically processed transactions in the order of the largest to the smallest, which can increase overdraft fees. But some banks are now switching to processing the smallest , or at least chronological order.

(Wells Fargo made changes last May to the way it processes some payments. Paper checks and automatic deductions — like pre-authorized monthly student loan payments — are still paid from high to low. But the bank processes A.T.M. withdrawals, debit card purchases and online bills chronologically, in the order received.)

Take a look at the tool and let us know what you think in the comments section.

Article source: http://feeds.nytimes.com/click.phdo?i=ebdea140ad1b5e0e97942a5162ac6b7e

Bucks Blog: Checking Eligibility for U.S. Mortgage Refinance Program

Last month the federal government announced changes aimed at making it easier for many borrowers who owe more on their home loans than their houses are worth to refinance into lower-cost mortgages.

There are several criteria that must be met to qualify for the updated Home Affordable Refinance Program, though. For instance, your current loan-to-value ratio (the amount of your loan, divided by the value of your home) must be greater than 80 percent.

The real estate Web site Zillow.com has introduced a calculator to help you sort through the requirements to see if you’re eligible. To use it, you’ll need some basic information, like the amount of your mortgage and the date you took out the loan. You’ll also need to know if the loan is backed by one of the quasi-federal housing companies, Freddie Mac or Fannie Mae (the tool can also help you figure that out).

The changes to the so-called HARP program are intended to help homeowners who are current on their loans but have been unable to take advantage of historically low interest rates by refinancing because they are “underwater” on their mortgages.

If you give the calculator a try, let us know if you found it helpful by posting in the comments section.

Article source: http://feeds.nytimes.com/click.phdo?i=71cac6515b5c1954b553a1a1c22d17fc