Effects of the Minimum Wage on Child Health

Effects of the Minimum Wage on Child Health
George Wehby, Robert Kaestner, Wei Lyu, and Dhaval M. Dave #26691

Abstract:
Effects of the minimum wage on labor market outcomes have been extensively debated and analyzed. Less studied, however, are other consequences of the minimum wage that stem from changes in a household’s income and labor supply. We examine the effects of the minimum wage on child health. We employ data from the National Survey of Children’s Health in conjunction with a difference-in-differences research design. We estimate effects of changes in minimum wage throughout childhood. We find evidence that an increase in the minimum wage throughout childhood is associated with a large improvement in child health. A particularly interesting finding is that much of the benefits of a higher minimum wage are associated with the period between birth and aged 5.

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Are drugs the Achilles heel of stagnant inequality?

[off the cuff research idea memo]

There is an uncanny analogy between China in the 19th century and the US this very moment: in both cases a large part of the general population could not be persuaded away from drugs by morality or prison. Opium in China then, opioids in the US now. Could it be the case that the essential mechanism is that those at the bottom of very unequal societies cannot say no to drugs and that with a stagnant society, the elites cannot say no to drugs money because growth has then come to be zero-sum? So the combination of inequality and stagnation spells great trouble with drugs? Let’s go over the core bit of this idea and how to check for it in other historical episodes.

In China, the opium offered on a large scale by foreign invaders was too seductive to the general population to ignore. China was under great strain with high inequality, no longer able to ward off foreign powers (the UK and France) or maintain efficient government. The US now too is under strain from foreign competition (from China but also the EU), has high inequality, and is subject to a quite stunning opioid crisis, one essentially engendered by corrupt insiders to the US establishment, exactly as in China the establishment was corruptible when the Opium trade came round.

Now, the US is stagnant in a very particular way: whilst its GDP is growing, the majority has seen little improvement in their lives and nearly all the growth occurs at the very top of the income and wealth distribution, so all those lowly government bureaucrats have seen their relative income and status drop the last few decades, just as was true in China when the UK pushed its opium on the people. The US is stagnation in the echelon of the elites that it needs to keep law and order functioning: in its basic bureaucratic machinery.

The EU countries are not suffering from the same opioid epidemic, where the upsurge in problems is far less than in the US. At the same time, the EU is not stagnating in its middle ground: employment levels are high, inequality is much lower than in the US, and its basic government machinery has not become corrupted to the same degree as the US’ machinery has. Perhaps most importantly, much of the EU feels it is doing well, with happiness levels up markedly in many countries (including Italy), and the Eastern countries growing in confidence and stature.

So the basic pattern fits the big power players. Let’s check some of the other drug-related knowledge history provides. Continue reading

Posted in Death and taxes, Geeky Musings, Health, History, Political theory, Politics - international, Politics - national, Race and indigenous, Society | 10 Comments

The Economic Consequences of the Peace

These are some quick notes on listening to a Libravox recording of Chapter Three of Keynes’ Economic Consequences of the Peace the text of which can be found here. I was stunned at how good it was. It was like listening to a phone message from another planet.

  • The overarching casting of the drama in terms of looking forward and the loftiness of the future which seems possible for Western Civilisation (and that this is not only the best course but also the only rational one) and looking backwards (which ends in the magical thinking of basing one’s thinking on the impossibility of recovering the past).

[Clemencau’s position] is the policy of an old man, whose most vivid impressions and most lively imagination are of the past and not of the future. … My purpose in this book is to show that the Carthaginian Peace is not practically right or possible. Although the school of thought from which it springs is aware of the economic factor, it overlooks, nevertheless, the deeper economic tendencies which are to govern the future. The clock cannot be set back. You cannot restore Central Europe to 1870 without setting up such strains in the European structure and letting loose such human and spiritual forces as, pushing beyond frontiers and races, will overwhelm not only you and your “guarantees,” but your institutions, and the existing order of your Society. Continue reading

Posted in Cultural Critique, Economics and public policy, History, Philosophy | 3 Comments

The poverty of intellectual correctness – Part One: Neo-Darwinism

I wrote this essay a few years ago as part one of a two-part article that would illustrate some parallels between intellectual authoritarianism in neo-Darwinism and in neoclassical economics. In some ways my response to Paul Krugman’s response to me was Part Two. But, wanting to quote this essay in another essay I’m working on – “Disciplines as institutions” I’m publishing it now in all it’s unfinishment.?

I. Denis Noble on what’s wrong with gene centred Neo-Darwinism

A few weeks ago?I finished reading Denis Noble’s very intriguing and provocative Dance to the Tune of Life, a comprehensive take-down of Neo-Darwinism and excessive reductionism in science.?Noble was one of Richard Dawkins’ PhD examiners and?used to identify with the?Neo-Darwinist mainstream – of which more in a moment. But, through his work in mathematical physiology gradually became aware of mounting problems with certain doctrinal foundations of Neo-Darwinism.

Often he shows us recent work that seems to debunk very important Neo-Darwinist doctrines at the same time as showing us that those heterodox ideas have been around for many many decades – sometimes over a century – but that they’ve been marginalised by the Neo-Darwinist consensus. And that consensus has been enforced by a Neo-Darwinist ‘political correctness’ police in which Richard Dawkins takes pride of place. My purpose in this essay is to delineate some intellectual roots of this political correctness and also to show strong parallels with the way ‘scientific rigour’ is policed in another discipline – economics – with similar disastrous results.?

Fittingly enough, cross-fertilisation between economics and biology has been common. Since economics first threatened to become little more than a branch of applied mathematics as the marginal revolution took hold, numerous economists of note have insisted that economics should be more like biology. In fact the cross fertilisation goes right back to the beginning of modern evolution. When Darwin read Malthus’s political economy, particularly his famous Essay on the Principle of Population it turned his mind toward every creature’s and every species’ struggle for survival.? The rest was history – well biology actually, but you get my meaning.

II.?Reductionism: Here’s looking at Euclid

Continue reading

Posted in Cultural Critique, Economics and public policy, Science | 4 Comments

Corporate Social Policy Responsibility

I was after one of the sillier charts to illustrate CSR. It was a tough choice, but this one hit all its KPIs. Originally worked up from the map which guided the bombing of Hamburg, all Troppodillians will join with me in celebrating its use in a civilian capacity.

CSR, shared value and its old establishment incarnation, pro bono work, arose from the old sense of noblesse oblige. Actually I wouldn’t have the slightest idea how it arose, but I thought I’d begin this post with a bit of strategisation – you know, where I say that a social institution suited its own time but now needs to be brought into the modern world, that given the state we’re in this issue has never been more important etc etc? </strategisation>

In any event, today CSR and similar initiatives arise from various motives.

  • The company would like to do something good, either because it wants to of its own accord or because it’s got up the community’s nose in the past.
  • The company would like to associate itself with Good Things which it hopes won’t hurt, and ideally will help its bottom line. This can happen through:
    • Continued licence to operate (it minimises the number of people chaining themselves to its bulldozers or snarking about?it on social media);
    • Increased sales through improving its image with consumers; and/or
    • Improved recruiting power in appealing to employees who want to ‘make a difference’.

In my discussions with big consulting and legal firms, one driver of pro bono work is its capacity to address the angst of the best graduates. Amid all this money making, they want their careers to be about making the world a better place. As the saying goes “All work and no change we can believe in makes Jack a dull boy”. Of course this hankering can only be addressed within reason – we’re not running a charity here. Nevertheless, a managing partner of BCG once told me that this was worth 5% of payroll to them to attract the best graduate talent. Continue reading

Posted in Economics and public policy, Political theory, Politics - international | 5 Comments

Churchill’s children: the rise of the privileged Marketeers in Anglo-Land

For almost a century the royal road to becoming a top politician in Anglo-Land was to study law and/or a bit of economics. In Australia that was the ticket for Keating, Hawke, Gillard, Howard, and Turnbull. In the US, that mold fit Obama (law), Clinton (law), and both GHW and GH Bush (one studied economics, the other business). In the UK, the royal road is recognised to be the PPE (Philosophy, Politics and Economics) study in Oxford, which for instance begat Cameron and several other prime-ministers since WWII.

Yet, currently, we have marketeers in charge of the most populous Anglo-countries. They are invariably men who have spent their working lives engaged in selling ideas and themselves to the general public. In Australia we have Scott Morrison, a marketing man, and before him Tony Abbott, a journo. In the US we of course have Trump, who spent decades in showbiz. I include Justin Trudeau of Canada in this list because I regard him as a born marketeer. And in the UK we now have Bojo, a journo for many years who is also, like Trudeau, a lifelong and natural self-promoter.

This is a bit much for coincidence. Politicians have always had to sell themselves, but in previous decades it was the marketing departments of political parties that helped them do it. Margaret Thatcher was famously re-dressed and re-branded to make her electable, and the Bushes had a lot of professional help in selling them. What is interesting is that now the top people themselves are marketeers. Any other skill or interest other than how to sell stuff seems a burden when it comes to reaching the top of the political tree.

Can we say the same for top politicians outside of Anglo-Land? Not really. One might at a stretch include Berlusconi, who is in many ways Trump’s predecessor but with more panache. Yet, if you look closely you will find that all the major countries are run by the usual types: Macron of France studied public administration and was in charge of a ministry; Merkel of Germany is an engineer-administrator with a similar trajectory as Thatcher; Modi of India did political science and then became a professional pollie; Jiping of China is the usual engineer-administrator normal for Chinese leaders; Putin is the usual for Russia (secret service); and Bolsonaro of Brasil is the usual for that region (military). Even Berlusconi turns out to have started with a degree in Law, the usual for Italian politicians before and after him.

So no, the non-Anglo countries do not get their politicians from the world of marketing, not even in those places we associate with populism or right-wing nationalist politics. In the rest of the world, politicians still come from the same place they came from 20 or 50 years ago. Anglo-Land has changed with the rise of the marketeers.

What is equally interesting is that really, tree of these seem to have had to reform the way politics was done in their own party and have pushed policies their parties disliked: they were resisted internally and had to force their parties into new ways. This makes their rise to power even more impressive because they will have been told constantly how wrong they were and how obviously their attempts at gaining power would fail.

Trump’s constant critics in the media and within the Republican Party are famous. Bojo argued for Brexit against the top of his own party, then once in charge kicked out his rivals from within the party, notably alienated his own brother, and was famously unpopular and disliked by the vast majority of his own parliamentary party when he was voted in by his MPs. Morrison had to battle Dutton and others for supremacy within, and was then written-off by the Labour supporters and their friends in the media till his stunning single-handed victory. In all three cases did their party insiders only grudgingly accept them as leaders in the belief they had to in order to have a chance of retaining power.

They also had professional or political careers outside of the center of their party: Boris was first major of London and then had to work his way up in the parliamentary party; Morrison was a tourism manager for many years; and we all know the stories of what the Donald was up to before politics, even trying to get into the other party first.

What is it about Anglo-Land currently that makes marketing men so electable now and not before, to the extent that these characters can make it even against the wishes of their own party? Maybe we should have a look for clues in history and find someone similar who rose to power, looking at the characteristics of that time. Continue reading

Posted in Geeky Musings, History, Journalism, Law, Life, Political theory, Politics - international, Social Policy, Society | 9 Comments

The framing wars: Have the elites gone off on frolics of their own unsupported by the community?

Are you pro-choice or pro-life? Language like this shows us how fundamental framing has become to political combat. Political debate isn’t just ‘dumbed down’ or simplified. There’s a geography to the ground on which it’s fought and those with an eye to victory head for the high ground.1?

There’s much talk these days about the divide between political elites and ‘ordinary folk’. It’s tearing western democracies apart. I think that the elite lack respect for the hoi polloi and their view of the world. Hence my frequent reference to the ancient Greek political principle of isegoria or equality of speech.2

In Sam Roggeveen’s response to my review of his essay Our Very Own Brexit (which I recommend by the way), he isn’t the first to argue that I do my cause no favours by “aligning it so closely with causes that our political elites would endorse (e.g. welcoming of immigrants and refugees; against Brexit)”.3 This is definitely sound political advice if one ventures among?the red meat folk at?Quillette.

But for the record, while I think Brexit makes lousy economic policy and statecraft, I wouldn’t just respect the will of the British people if they chose the course they are embarked upon with open eyes. I’d be awestruck with admiration. I’d think it was a fantastic development in which people decided that there were more important things than money and power to live for. But I don’t think any of that. I think they’ve been sold on a particular framing of the story in which the EU is an elite project gone mad, and so something which is coming after their nationhood and something on which they can heap their rage.

Roggeveen’s response goes on:

The problem I identified in the book is that the party-political class in Western democracies has become a separate caste with few connections to a social or economic base; Brexit shows what happens when the policy preferences shared by that caste runs too far ahead of the public.

I’ll call this the ‘frolic’ school of analysis. The elites have just kept doing what elites do – pursuing various hubristic agendas until the inevitable Wile E. Coyote moment comes and they realise that they have, in their zeal, arrived at a place where there’s no ground underneath them. Now it has to be admitted that the EU has major flaws. It seemed to me that its treatment of Greece was and continues to be a disgrace, and even if you disagree with that – as Paul Frijters does – the whole Euro project was ill-conceived and devastating. I’d go so far as to call it a frolic?– and it’s a frolic of spectacular, and spectacularly ill judged proportions.? Continue reading

  1. Thanks to David Sligar for comments on a draft.
  2. This article began as I gussied up my response to Sam Roggeveen’s response to my response to his Our Very Own Brexit.
  3. I’m? pilloried about that?here for instance.
Posted in Democracy, Economics and public policy, Philosophy, Political theory, Politics - international, Sortition and citizens’ juries | 16 Comments