The economy has steadily been moving closer to the Fed’s long-run objectives. But we’re still not there yet.
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Category Archives: labor market
March Employment: Downward Revisions and Some Sectoral Breakdowns
The March establishment series estimate for nonfarm payroll employment clearly fell far short consensus estimates (release). Here are a couple of quick observations.
Output, Employment and Unemployment: Some Updated and Some New Results
In a previous post, Laurent Ferrara, Valérie Mignon, and I examined the nonlinear relationship between employment and output (based on J.Macro (2014)). Using the most recent data, the level of (establishment) employment now matches the output level. Figure 1 shows the actual level, and the predicted level from a nonlinear error correction model that allows short run dynamics to differ between recession and non-recession regimes.
Estimates of the Elasticity of Employment with Respect to the Minimum Wage
Some people would have you believe the impact of a minimum wage hike on employment is known to be large and negative. A cursory acquaintance with the literature helps in immunizing one (if one believes in vaccines and the like) against falling for such assertions.
Pompeii on SF Bay?
Will a minimum wage increase induce an apocalyptic conflagration of small businesses and low wage employment? Here’s one prediction:
This is not the time to force businesses to raise prices by laying-off employees in order to stay in business.
What good is raising the minimum wage if prices go up? What good is raising the minimum wage if there are no jobs available?
Businesses will be forced to raise prices in order to absorb a 26% pay increase. Restaurants will be especially hard hit.
Some Empirics Regarding Right to Work Laws
Wages in right to work states are lower than those others. After controlling for various factors, the gap remains.
Arkansas ahead of Wisconsin
On progress in implementing the minimum wage.
Pessimism about U.S. growth rates
A growing number of observers are starting to conclude that we’re never going to see the rebound in growth rates that many people had anticipated as the U.S. recovers from the Great Recession. Here I comment on a new paper in which Northwestern Professor Robert Gordon explains the basis for his pessimism.
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Imminent Wage Increases?
How tight is the labor market? A recent article summarizes the argument that wage pressures are building. From K. Madigan in WSJ Real Time Economics:
Beware of Unit Roots in Scatterplots
Is there a linear relationship over time between the share of workers affected by the minimum wage and the ratio of the minimum wage and average compensation?