Adam Ozimek draws from the recent study showing that large retailers pay their workers more, on average, than do smaller retailers a relevant lesson about minimum-wage legislation. (HT Tyler Cowen) A slice:
If monopsony power is an important feature of the labor market, and monopsony power should be prevalent when firms are bigger and therefore have a larger share of the local industry, then why do big firms pay more than small firms? The small mom and pops should be closest to operating in a competitive labor market and have little bargaining power, but they pay less. Maybe the productivity effects of big retailer outweigh the monopsony effect, but that just is another way of saying it’s not as an important feature of the market. In addition, ask yourself whether you predicted this result of big firms paying more before you read about this study. Be honest, if someone asked you to predict the results, would you have told a story about big firms bargaining workers down to lower wages? If so, it is time to re-evaluate your views.
Here’s the cover of my forthcoming book, The Essential Hayek. (I thank Jason Clemens and his marvelous colleagues at the Fraser Institute for making this book possible.)
Ira Stoll explains that, contra Paul Krugman’s claims, Kansas’s fiscal house is not in bad shape. Here’s Stoll’s conclusion:
One final thought: the measure of the success or failure of these tax cuts shouldn’t just be the effect they have on the bottom line of the Kansas state budget. The measure should be the effect they have on the budgets of the individuals, families, and businesses that are residents of Kansas. In the end it’s money that belongs to them.