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Mike Munger points us to further research, by Thomas MaCurdy and forthcoming in the Journal of Political Economy, on the minimum-wage [2]. (HT Mark Watters) Here’s the abstract:
The efficacy of minimum wage policies as an antipoverty initiative depends on which families benefit from the increased earnings attributable to minimum wages and which families pay for these higher earnings. Proponents of these policies contend that employment impacts experienced by low-wage workers are negligible and, therefore, these workers do not pay. Instead proponents typically suggest that consumers pay for the higher labor costs through imperceptible increases in the prices of goods and services produced by low-wage labor. Adopting this “best-case” scenario from minimum-wage advocates, this study projects the consequences of the increase in the national minimum wage instituted in 1996 on the redistribution of resources among rich and poor families. Under this scenario, the minimum wage increase acts like a value-added or sales tax in its effect on consumer prices, a tax that is even more regressive than a typical state sales tax. With the proceeds of this national value-added tax collected to fund benefits, the 1996 increase in the minimum wage distributed the bulk of these benefits to one in four families nearly evenly across the income distribution. Far more poor families suffered reductions in resources than those who gained. As many rich families gained as poor families. These income transfer properties of the minimum wage document its considerable inefficiency as an antipoverty policy.
My Mercatus Center colleague Veronique de Rugy takes a close look at defense spending in the U.S [4].
The top 1 percent of taxpayers paid a higher effective income tax rate than any other group at 22.8 percent, which is nearly 7 times higher than taxpayers in the bottom 50 percent (3.28 percent).
Diana Furchtgott-Roth argues that increased immigration is good for the U.S. economy [7]. A slice (emphasis added):
Legislation, not an executive order, is needed to expand the number of visas for both low-skill and high-skill immigrants and to begin to resolve the status of the estimated 11 million undocumented workers living in the United States. Labor markets are constantly changing, and U.S. immigration policy should emulate this flexibility. The data are clear, and they show that immigration encourages economic growth. Adopting more flexible immigration policies that spur growth would benefit all Americans, both native- and foreign-born.