Ask the grumpies: What’s your take on Oster’s interview about gun violence?

OMDG asks:

What’s your take on the Emily Oster interview of the ED Dr at brown about gun violence?  https://emilyoster.substack.com/p/understanding-gun-violence 

I am sorry to disappoint, but sadly the interview is only available to paid subscribers and Emily Oster really does not need my money.  (She and Jesse make waaaaay more than DH and I do.)

From what I can tell, the interview is with Megan Ranney, so I looked to see what else she’s been saying on media recently.  Here’s a Boston Globe article.

Ranney said she believes all of the actions being taken by the Biden Administration on gun violence are significant and important, all for different reasons. But the investment in community violence programs is key, she said.

Everything she says in the article seems to be sensible and to be following our best knowledge about preventing gun violence and gun deaths at this time.  She’s also got a Ted talk, and many other interviews online that aren’t pay to access.  I think she knows what she is talking about.  I assume she doesn’t say anything wild and crazy in the Emily Oster interview.

Grumpy Nation:  What do you all think?

Myths about the value of college

ARGH, I’m seeing so much misinformation going around in twitter because of student loan forgiveness.  It’s driving me crazy.

Myth:  The value of a college degree is not worth it.
Reality (based on recent work of David Autor, but also many many other people): Even with the high costs of a degree and student loans, the additional earnings make it worth it for most college graduates.
Sub-Reality (I don’t remember a big name on this one, but lots of people are studying it with mixed results): The benefit of going to college and not finishing– we’re not as sure about that. Depending on the loans that you take out, it may not be worth it to spend a couple years in college and then not have a degree (though 2 years at community college with a degree is worth it). And lots of people go to college, take out loans, and don’t finish. That is a problem that lots of people are studying.
Sub-Reality (David Denning and several other papers): Even a degree from a for-profit college usually does result in higher earnings, but you are no better off with a for-profit degree than you would have been with a community college degree (worse given student loans, though the worst offenders have thankfully been addressed in the new Biden thing). They provide the same benefits, it’s just the for-profit degree is stupidly expensive by comparison.

Myth: It is better to go to a low tuition regional school (or community college) than to the best school that you can get into.
Reality (Hoxby and Turner in an amazing RCT, and other papers that are not experiments but use clever regression discontinuity designs): Schools with better endowments 1. Give more and better financial aid, meaning that for poor kids who can get into them, a state flagship or a highly endowed private prestige school will cost less. And 2. More prestigious schools do a better job of retaining low income kids– this seems to be through a variety of methods– better financial aid means working fewer hours, but also they just have a lot more resources devoted to keeping low SES kids, offices, sometimes mentorship programs, short-term loans etc. That means for low income kids, the more prestigious school means that they’re more likely to actually *graduate.* And, we also know among graduates (through a lot of different papers, though no RCT to my knowledge), prestigious schools help low SES kids make more money as grownups than do less prestigious schools.
Sub-Reality: For middle/upper middle/rich class kids, it doesn’t matter. They just need a degree.  (And the rich probably don’t need a degree.)

Myth:  The skyrocketing cost of college is caused by financial aid accessibility.
Reality: The skyrocketing cost of college is caused by decreased federal and especially state investment in state schools. (And to a much smaller extent: better quality education, gambling on fancy sports programs that don’t pay out, fancy dorms at private schools, etc. But this is like nothing compared to the effect of how much the government has stopped subsidizing higher education.)

And some stupid Republican propaganda:

Myth:  Non-college training is free.
Reality: Truck driving requires CDL training. Hairdressing requires training. Nursing requires training. Plumbing requires a TON of training. So many professions that don’t require a college degree still require technical training which still costs money.

Myth: Working class people don’t have student loans
Reality: A lot of people drop out of college and have student loans. A lot of people get student loans to pay for technical training.  Plenty of working class people have student loans.

It still boggles my mind that only 30-35% of US adults have college degrees.  But a big percent start but then drop out without an additional degree.  (You can get exact numbers from http://www.ipums.org)

Making fun of people for (rationally) picking and choosing covid/monkeypox risks

There’s a lot of people who complain about how we have to mask at conferences, except during meals when we’re all eating at the same time.  Why mask at all?  Or why mask at the grocery store but not at a wedding?  Or why go to parties at all if you’re worried about covid?  Or why not go to parties if you’re not going to mask at work or if you have a child in daycare?  Why don’t people take the same level of caution at every moment of their lives?

Some of the argument is the same as when people make fun of people who order big macs and supersized fries along with a diet soda. From an economics standpoint that makes sense– they get utility from the fries and big mac that justify the extra calories but not from the soda. (Ignoring that from a health standpoint diet sodas may mess with how your body deals with sweet things.)

Going to Walmart because the cost/benefit ratio makes sense but not going to a wedding because it doesn’t *is* reasonable. There’s a lot more things besides risk that go into a cost/benefit ratio. I mean, I avoid amazon when it’s easy and I use it when it’s not easy to avoid. I boycott Nestle when it is easy but sometimes still buy Haagen dazs because it’s actually good and one of our grocery stores only has Ben and Jerry’s as an alternative, which we like, but sometimes you need something they don’t have. That is rational, not hypocritical. (And yes, I know my individual boycott means nothing to Nestle… but bigger boycotts do matter, and *I* care.  Just… not always enough.)

Maybe it is that people don’t understand risk, but maybe some of it is that risk is only part of the cost-benefit ratio but the most acceptable of the social excuses these days. Or that going to the gym is the only way to force yourself to exercise and you wear gloves to remind you not to touch your face after touching the equipment even if you know that the air is more likely to spread covid than surfaces. (And to be fair, I stopped touching doorknobs without sanitizing back when I was on the job market decades ago because I realized I no longer came back from travel sick! Covid isn’t the only bug out there.)

Are there rational choices that you make that seem wrong to people who don’t understand your cost-benefit calculus?

Data and bias

This tweet recently made the rounds of twitter:

Justin Wolfers has since deleted his defense.

But… here’s my 2 cents as someone who isn’t bringing in over half a million per year in salary from the University of Michigan (Justin Wolfers and Betsey Stevenson’s salary info is available online as state employees):

1.  100K is a lot, and if you don’t think it’s a lot, there’s a problem.  To speak in terms that the top 2% can understand, that’s a whole new personal assistant.

2.  The motivation of 100K is not really as big a deal as getting stunning data. Just the data by themselves are incentive to not bite the hand that feeds the researcher (in this case Uber).  And the Uber data are stunning.  They’ve helped us learn a lot about human behavior and contingent labor markets, and probably lots of other stuff that’s more industrial organization.

Does that mean that you can’t trust anything that comes out of the Uber data, or any other study where the company has generously provided data?

No.

But it does mean that you need to think really hard about the studies that do come out of the data (and the studies that don’t come out as well).

Ask yourself:

Does the company (or in some cases, government agency) benefit from the study results?  If not, then it’s probably ok.

There are plenty of amazing studies using the Uber data that tell us about the type of employee who uses the contingent labor market and what their preferences are.  Uber has no reason to benefit from or to suppress this information.  The studies are orthogonal to influences that Uber might be giving (purposefully or not) to grateful researchers.  These results are probably trustworthy, that is, they can be evaluated on the merits of their own internal validity.

If the company would have cause to benefit from the results– then you might be more cautious.  Not that a good economist would purposefully fudge data or results.  They don’t need to.  With any research project there are a lot of decisions that need to be made about specifications and samples and data cleaning.  Researchers just have to unconsciously feel grateful to the company to bias themselves with these choices, particularly if they don’t have a pre-analysis plan.  (And even if they do have a pre-analysis plan, they might still choose what they unconsciously think will benefit, or at least not hurt, the company).

On top of that, there’s selection bias in the choice of research question.  Even excellent economists will choose to just not go places that might make the company look bad when said company has provided data.

Similarly, negative results can be suppressed by the data provider.  I know of a case where the US government suppressed one of my colleague’s research findings that made their agency look bad after providing him with data (though they did allow someone else to publish the same negative findings later under a new, less fascist, government regime).  Any time that clearance is required to share results, that can be a problem.

To sum:

Just data provision is enough to bias research results.  If a company provides data, then results that show the company in a positive light will be shown and results that show the company in a negative light will not be shown to the public.  Results that don’t affect the company one way or the other are probably fine and can be evaluated on their own merits.

There’s a lot to be said for data that come from legal requirements (ex. FOIA), are available from third parties, or from internet leaks.

It is important to know who provided the data, not just who provided the funding, when doing disclosures.

Myths about TANF

This is an old post in the drafts from 2011.

Entitlement:  Not really sure what I meant by this one.

Cadillac mama:  The idea of the Welfare Queen was thought up and popularized by one of Ronald Reagan’s speech writers.  There’s little to no basis in reality, though some point to one woman who was perpetuating actual fraud (and was caught and went to jail for it).  There were no single mothers living large on Welfare back during Reagan’s time and TANF is even less generous, so that’s even less of a thing.

Encourages more babies:  TANF does not pay enough for an extra child to make it worthwhile to have an extra child.  The extra child will cost more than the additional benefit of TANF.  Anybody saying they want babies to get on welfare is delusional.

Encourages divorce/not getting married:  maybe.  Welfare (pre-TANF), potentially even more so, because it was targeted at single moms and even more difficult to get if married.  But even if TANF does encourage divorce/not getting married, that’s not necessarily a bad thing if it helps women not be trapped in dangerous marriages.

Discourages work:  yes and no.  Welfare pre-TANF did discourage work.  TANF is an improvement over that.  TANF is designed to try to keep it from discouraging work as much, though theoretically it still could.  Empirically it seems to not discourage work much.  One of the terrible things is that work doesn’t really provide a living wage for a lot of people on the margins of TANF.

People move to states with more generous benefits in order to receive benefits:  This just does not happen.  First:  People do not leave their families and support networks to chase benefits.  Second: even if they did, states have waiting periods where you have to live in said states for more time than most poor people can handle before benefits start up.

The CBT is awesome post

Disclaimer:  I did CBT 20 years ago at a research university that is/was known for CBT research, and this post had been sitting unfinished in drafts since 2016.  A lot of stuff may have changed since then!

Another one of those comments I’m always leaving.

CBT is amazeballs. It’s also what they use in Bradley class for natural childbirth. It takes practice but it totally changed my life even more than just the test anxiety I was getting it for. I’m so much of a calmer person now. Every time I start getting anxious my deep breathing automatically starts up. Personally I think everybody should get trained in it starting in high school!

It also has the benefit that it’s a set of specific techniques and once you’ve learned them, or learned even a set of them, you can stop going to therapy* for the specific anxiety. The one I did was a 6 week program, IIRC. (They graduated me a little early because I responded really well to the early techniques, which makes sense as they teach the most effective ones first.) I went to a university program, which was nice, though I had to wait a few months before they could see me. A private practitioner might not be as systematic, but may have less of a wait.  (DH tried it locally as a professor and it was not as focused or as good.)

The CBT place I went to recommended Mind Over Mood and Thoughts and Feelings while I waited to be seen. They were also helpful.

The main idea behind CBT is that anxiety causes a physical response that makes you more anxious.  If you can interrupt that physical response, you have a chance at letting your rational brain take over.  Ditto negative repeated thoughts (what my therapist called “ticker tape”).  It is NOT about getting to the root of your problems.  It’s only about getting tools to treat the symptoms of anxiety and anxiety-related disorders.

The first lesson for me was breathing.  When you’re in fight or flight your breathing changes and that gets you more anxious.  So we spent a lot of time practicing breathing in through the nose two three four, out through the mouth two three four.  I had to practice this at home too in a relaxed state, so I started identifying the breathing with being relaxed.  Eventually taking a deep breath became an immediate unconscious response every time I got anxious.

Cognitive restructuring was another important lesson.  With my anxiety I had these negative repeated thoughts, “you’re so stupid, you’re going to flunk out of graduate school, you’re a failure etc.”  In this step, the therapist folded a piece of paper in half length-wise and on the left wrote each negative thought down.  On the right we came up with something that was *true*.  It’s really important here for it not to be aspirational or unbelievable, but for the response to be completely believable and true.  Stuart Smalley-style affirmations don’t work.  But replacing incorrect negative thoughts with neutral or positive true things does work (on average, in RCT).  (And I decided what was true, not the therapist.)  So “You’re so stupid” would be replaced with “I’m not stupid.”  “You’re going to flunk out of graduate school” with “[Grad School] doesn’t flunk anybody out, they just give people consolation PhDs and make sure they work in industry instead of academia where they make more money.”  “Even if I leave graduate school I’m not a failure, I can still get a real job making money.” and so on.  I kept that original list on our refrigerator through several moves and really only didn’t put it back after our last sabbatical.

Progressive muscle relaxation was another interesting one.  With this one, you start at your toes and clench them super hard and focus on how they feel while clenched.  Then you unclench them and ponder how different they feel when unclenched.  Then you go up your feet and legs and so on.  I fell asleep in the therapist’s chair doing this and we decided maybe it was a bit overkill for test anxiety.  But it does help me get to sleep sometimes.

There were more lessons after this, I think positive visualization for which the science wasn’t really there yet was one.  I don’t remember what else.  Breathing and cognitive restructuring really helped me.  If they hadn’t worked so well, we might have done some aversion therapy which is NOT just throwing someone into a pit of their fears without support.

Anyhow, that’s my CBT post and now maybe instead of typing this all out each time it comes up in a chat I can just refer to this post.

*YOUR MILEAGE MAY HEAVILY VARY.  CBT didn’t do jack squat for #2, although she recommends it to most people.  Please don’t feel bad if 8 sessions of manualized CBT doesn’t fix your decade-long problems.  It’s not designed for that.  It works well for, say, test anxiety, or a first-time depressive episode.  It works less well for relational trauma and complex interactions of problems.

Have you done CBT?  What were your experiences with it?

Cognitive Restructuring

This is a post from 2011!  Or rather, there was an outline in 2011 and I turned it into sentences last weekend, 10 years later.  I was militantly happy back in 2011, and without a pandemic or incipient fascism and with Obama etc. things were looking up for the better, yet I was on a mommy forum local to a paradise where some highly privileged people seemed determined to be unhappy.

**************************************

I like being happy.

Sometimes there’s no choice about how to take things because some things are genuinely bad.  For us, that kind of thing leads to grumpy rumbling.

And sometimes you know you *could* fight being unhappy but you also know that the occasional sulk is good for the soul so you indulge.

But for the many things, there’s a choice on how to view what’s going on, especially if your basic needs and then some are being met.

Happy people aren’t necessarily the luckiest, but they’re good at taking things as they are.

For example:  Rejection sucks and often it is unfair.  But, as they say in LA, when a door closes, open a window.  Take what you can from the rejection to learn, using your growth Mindset (all amazon links are affiliate), make your paper better, and submit it someplace else.

How to cognitively restructure:

  1. Fold a piece of paper in half length-wise.
  2. On the left, write down the negative thing that you keep telling yourself.  On the right, write down the thing that is actually true.  (Not Stuart Smalley, but what is actually true.)  So when I was in graduate school, on the left I had, “I’m going to flunk out of graduate school” and on the right I had “Nobody flunks out of this program, they just graduate you and make sure you don’t get an academic job so you make more money as a consultant.”  This is a technique from Cognitive Behavioral Therapy.  Two good books on CBT are Mind over Mood and The Thoughts and Feelings Workbook.
  3. If you don’t know what is actually true, you can tell yourself the best possible story.  For example, I have massive social anxiety and it is important to remind myself that no, actually, most people are too caught up in themselves to be concerned about or even notice my own awkwardness.  Often what can be attributed to malice can also be attributed to incompetence.  Sometimes you can convince the other person of your story by coming up with a face-saving (for them) story if you repeat it often enough.  There’s a lot more about these techniques in the book Crucial Conversations.

Do you ever cognitively restructure?

Selection into the sample on the variable of interest: A Rant

First, a disclaimer:  I dislike mike the mad biologist.  I blame men like him for Trump being president because of his relentless attacks on ‘this woman, I would support any woman for president, just not this one” and the fact that he’s one of those assholes who does absolutely zero work and again, attacks people who are actually doing something as always doing the wrong thing.  Those men make doing things that they claim to support more difficult and emotionally draining while not lifting a finger themselves.  The only reason I ever look at his blog is because he’s on Bardiac’s blogroll and occasionally he’ll have one of those post headlines that I have to click.  Previously I thought he was just an unselfaware misogynist blowhard.  Now, I’m realizing that he’s … also not got very good statistics training.  (Interestingly, I’ve seen a recent survey that finds that people who are explicitly racist also just tend to be wrong about other things unrelated to their racism.  Not saying that translates to implicit misogyny, but… )

Ok, so here’s the post in question.  In it, he claims that a survey of people who aren’t getting vaccinated proves that time pressure and inability to take a day off work are not reasons.  (Therefore any policies targeting making getting vaccinations easier or getting time off work are wasted effort.)

The problem?  If you click on the survey, it says it has a 6.1.% weighted rate for taking the survey.  (So only about 6 out of every 100 people they sent the survey out to actually responded.)  Also, it is an online survey.

If that 6.1% were a randomly selected sample of a general population, there wouldn’t be a problem.   The problem is when the selection into the sample is based on the outcome that you’re measuring.  In this case, if you’re measuring people who don’t have time or ability to get vaccinated, well, likely they don’t have time or ability to take a survey either.

The Census Bureau isn’t stupid– they know this is a problem and they have lengthy documentation about the non-response bias in the sample generally.  They make it clear what you can trust the results for and what you can’t, as well as the limits of their weighting schemes.  The survey isn’t completely useless, but it is only externally valid for the groups that were surveyed!

I had been planning to use this little example of “sample selection on the Y variable” in my stats class this fall, but now I can’t because his response was so ironically ignorant that I have to blog about it instead.

Here’s his response:

The low income people who are supposed to be burdened by the time constraints also don’t report access as an issue compared to other factors. Are there any data that could convince you, or will the answer always be the same?

So– I guess I was right about his complete lack of self-awareness.  Can you imagine being convinced to make a huge policy change based on one extremely selected survey?  The people who ran the survey would never ever want you to make a policy change based on this result!

The answer to the question of what would be convincing (taking it seriously rather than just an accusation of me being set in my ways):

  1.  A nationally representative sample that found the same result.  The US government has some of these, where you are required to take the survey and they have much better response rates (not perfect, but much better).  This survey is not one of them.
  2.  A sample representative of the population who we are trying to target with our policies (ex. a state going into a few factories with onsite vaccination clinics before expanding the program).
  3.  Multiple biased surveys that are biased in different ways (that is, are not biased on the outcome variable of not having enough time).

No good policy maker would make policy based on such flimsy evidence as the survey mike the mad biologist presents.  In fact, we rarely make big changes based on the result of any one study, unless it is the only study available or is the only well-designed large experiment available.  And even then, good policy makers keep their eyes out for new evidence and try not to do huge national things when the evidence is scant.  Ideally we’ll have a largescale randomized controlled trial, but failing that we’ll take a series of mixed methods– qualitative information, event studies (these two are the easiest and cheapest to do but can be biased depending on how they’re done), natural experiments, and so on.  Ideally we’ll have information about heterogeneity– we think, for example, that the effects of the Affordable Care Act and the effects of universal health insurance were different for Oregon compared to Massachusetts compared to Wisconsin or Tennessee.  And that could be because they have different populations and different starting environments, or it could be that each of these states had a different methodology used to study it with different biases.

Unlike Mike the Mad Biologist, every single thing I do (in research and in teaching!) has the potential of helping or harming someone’s life.  I have to be extremely careful.  I don’t make policy recommendations until the bulk of evidence supports those recommendations.  Because, getting back to that first disclaimer– I’m actually out there doing stuff, not just complaining about the people who do things.

So yeah, I teach my students about how not to use samples that are selected on your variable of interest.  It’s a more challenging concept than people say, lying about their weight or height, but it is an extremely important one.  I have a lot of students who go out and design/make/evaluate policy when they graduate.  Hopefully the lessons I give them remain with them.

Yes, Asian Americans also face discrimination in the US

Hate crimes against Asians and Asian Americans have been getting some news lately.  Not as much news as they ought to be, especially if you don’t follow any Asian American people on social media.

Our university, like many in the country right now, is only hiring for positions that increase the diversity of the faculty.  Unlike many universities that are only responding superficially to the Black Lives Matter movement, ours is taking a broader view and not just hiring people who do various versions of “African American Studies” or whatever else I’ve been seeing on job ads.  (Research suggests that doing a big cluster hire AND taking into account diversity as a structural whole will likely be more successful in retention and improved climate than the places that hire one black person to teach all diversity studies classes and then forget about diversity as soon as BLM is out of the news cycle.)

Our percent of Asian American graduate students and of Asian American faculty are much smaller than the percent of the population (at the undergraduate level we’re closer to matching).  As a large R1 public state school, we are supposed to look like our constituents and we don’t.

When we get “diversity points”* for students and faculty, in general, international students count as “international” regardless of their race or ethnicity and only domestic students (citizens, permanent residents, and those who could be included in DACA) count as diverse, meaning they qualify for university-level scholarships only available to increase diversity in our graduate student body.  Because our numbers are low for Asian Americans, our university gives us “diversity points” for recruiting and enrolling Asian Americans, but we are supposed to try to keep international within a certain percent so that we have international exposure but aren’t entirely international.  For this hire focused on increasing diversity, those guidelines have been relaxed (I assume because immigrant faculty are assumed to become US Citizens) and Black and Hispanic international faculty are considered to be increasing diversity for this targeted hire.

So we had two international candidates and the third candidate was Asian American.

The worst thing about discrimination against Asian Americans is that so many people believe that it doesn’t exist.  They look at numbers of Asian Americans at Berkeley or Harvard and argue that quotas should go in the opposite direction– that Asian Americans should be limited rather than encouraged.  That we should discriminate against them rather have affirmative actions for them.  They are expected to be “higher quality” if a place hires them over a White applicant– if equal, people believe the White person should be hired.  This is a kind of discrimination that plenty of people who believe they are Woke have– they deny that Asian Americans face discrimination and they put them in the “model minority” box.  One of my grad school professors told me that the hardest candidate for him to place (because of discrimination) was any Asian American male.  And indeed, it’s a bit jarring realizing how few Asian Americans we have in graduate school in my field outside of California.

Worse, not only do they treat all Asian Americans as the same (ignoring that Asia is an entire continent and that Asian Americans have widely varied histories depending on when, where, and why their families settled here and what their families experienced once here).  But they treat all Asians IN America as the same.

So when I noted that we only get maybe one Asian American graduate student every couple of years and that’s a known problem and we’re actually doing better with Hispanic and Black students since our last major intervention… several of my colleagues shook their heads.  We get TONS of Asian students from South Korea and China(!)  (!!!!!) they argued.  And I couldn’t even.  But instead I gently argued that no, Asians from Asia and Asian Americans have not had the same life experiences and are treated differently by admissions.  I did not mention that before that last admissions intervention, our graduate admissions officer referred to Asian Americans as “Oriental” (which is not a slur when referring to carpets but most definitely is when referring to PEOPLE) and worse, color coded them yellow (zie also coded Native Americans as red– I am not making this up).  I mean, is there any question about why we have so few Asian Americans in our graduate programs?

This is not to say that international faculty aren’t discriminated against or that Black and Hispanic faculty aren’t discriminated against.  They obviously are.  But the most insidious thing about discrimination against Asian Americans is the general belief that it doesn’t exist or that if it does exist it’s ok because: “model minority.”

In any case, we decided all three candidates were acceptable.  We’re making offers in order of the quality of their work and how well they fit gaps in our curriculum.  But that was after a lot of discussion about the intention of the cluster hire (the university had provided guidance that they found all three candidates equally acceptable in terms of increasing diversity, but some of my colleagues wanted to argue about that even though we currently have no Asian Americans in our department**).

*diversity points is an amorphous concept– basically we get audited every few years and if we are too white/non-Hispanic, we get dinged, and we get dinged the more off from the state averages we are for each major group.  Being dinged generally means having to write up a plan to fix the problem; I was in charge of one of the committees when we were doing really badly almost a decade ago as a newly minted associate professor.  Also there are scholarships from the university that only underrepresented minorities are eligible for.  At our uni, Asian-Americans are underrepresented at the graduate level.

**the department that shares a building with us has an Asian American professor of Japanese descent and an international professor from China.  A couple of my colleagues regularly mix them up with each other even though they are *nothing* alike in any way other than both having black hair.  They don’t even dress similarly (one is more business and the other business casual).

There are better options than increasing the minimum wage

Recently Jen Doleac (a leading economist in the study of crime and a wonderful person*) came under fire on twitter for saying that if the minimum wage were increased to $15/hr where she lives in Texas, she would hire fewer undergraduate RAs (currently $10/hr) and more pre-docs (people who have graduated college and plan to go to graduate school in the future) at $22/hr, resulting in fewer hires overall.  (Note to people who live in Blue Coastal cities– remember that cost of living in the South is a lot lower than where you live.  $15/hr seems pretty high to me given how low rents are where I live– $500/mo for a studio, much less if you’re willing to share a multiple bedroom place with others, and you still get your own room.)

What bothers me about this, other than Jen being a stand-up person who cares a LOT about people and genuinely wants to do things that help rather than hurt people**, is that the attacks on her are a knee-jerk reaction to a policy option that we still don’t know for sure will help or hurt people overall, and the mitigation of potential hurts is not being taken seriously because somehow raising the minimum wage is supposed to solve problems and not create new ones.  Ignoring potential problems not only doesn’t make them go away, but it prevents us from having comprehensive policy solutions.

The problem with most conservatives is that they want money and power and don’t care who gets hurt (also they have stronger levels of disgust and really hate moral hazard).  The problem with many knee-jerk ultra-liberals is that even though they care a lot, they often advocate for things that sound good but actually hurt the populations they’re trying to help.  (This is why Public Finance is such an important class for everyone!)

We don’t know if raising the minimum wage helps or hurts, because if minimum wage gets too high, employment will drop.  Yes, in our current environment it is probably too low now.  Yes, $100/hr is probably too much and will result in more robots and fewer jobs.  (Or in the undergraduate RA case– fewer paid RA positions and more unpaid class credit positions.)  Is $15/hr the right number?  $25?  $10?  It is really hard to say.  There are well over 500 papers examining the effects of the minimum wage.***  We do know that when firms have monopsony power****, employment goes up when the minimum wage is raised a little or in environments that can bear the increase.  It seems likely that a minimum wage increase may have short term benefits to employment outcomes, but then decreases employment over the long term (that is, firms don’t fire people, but they don’t hire as much when people leave when the wages are higher).  There’s a lot of newer evidence showing heterogeneous effects of minimum wage increases and it helps white dudes most and in some cases hurts black men and sometimes women.  So even if it helps on average, there’s a good possibility that large increases in the minimum wage will hurt our most vulnerable.

What does work?  Well, the evidence for the EITC is extremely strong.  Even researchers and policy makers who were EITC deniers back in the 1990s have come around because the evidence is so strong.  (What is EITC?  it’s basically a tax program that subsidizes wages for low income people.  Sometimes knee-jerk folks think, this is the government subsidizing big companies, and they are not wrong.  But are you trying to punish companies or are you trying to help people?  What is the end goal?  In theory, the EITC could be combined with a stronger corporate tax, but in reality…)  So Jen Doleac says, we need to expand the EITC.

But the problem with the EITC (as with increased minimum wages) is that you have to work to get it.  There are a lot of people who, for whatever reason, cannot produce enough to make even $7.50/hr.  You’ve probably worked with people who actively decrease other people’s productivity (possibly even had a boss like that).  Then there are people who are just not capable of regular work.  Now, we do have a disability program and TANF and WIC and etc. but this is not a comprehensive social safety net.  I fully believe that in a country as rich as the US even people who are not capable of being productive enough for a firm to hire them at minimum wage should be fed and sheltered and clothed and provided healthcare.

So what is better than increasing the minimum wage?

Basic Income.  Give everybody enough income that they can live a minimal subsistence lifestyle without working.  Yes, there will be moral hazard– lots of people will work less under this system.  Even potentially productive people.  I don’t care.  Some people shouldn’t be working (though because discrimination is real, under our current system that doesn’t necessarily map to the people who aren’t working) and I am ok with this (not ok with discrimination though).  As long as the basic income isn’t too high, most people will still want to work at least somewhat because most of us don’t want minimal subsistence lifestyles.  Then you can combine basic income with EITC, single payer health insurance, and stronger corporate taxes and there’s no longer even a need for minimum wage or disability or TANF or a whole lot of other expensive red-tape programs.   Of course it’s easier to change one program than to change a number at the same time.  And it’s likely corporate taxes would be dropped later without changes to basic income or EITC, which could be problematic.  We don’t know that much about the effects of basic income because it’s never really been tried on a large scale, but in theory the effects aren’t ambiguous like they are for minimum wage.  Productivity will drop but average well-being will improve and children will benefit from the stability.  (There’s details… how much should geography be taken into account etc. Subsistence income in Manhattan is very different than say, rural Montana.)

Now, from a political standpoint, you may say that increasing the minimum wage is an easier sell than completely restructuring our welfare system to basic income, and you would be right.  Basic income is probably less feasible.  Expanding EITC may be more feasible, and may be a better option, but, of course, it does have the problem that it’s the government subsidizing firms that provide low wages.

I hate the way that well-meaning people often label people as terrible because they don’t think about the potential negative consequences of the programs they’re advocating for.  When I was living in paradise, I was constantly bombarded with requests to sign petitions in favor of rent control.  To help the poor people, they would say.  But what happens with rent control?  You end up with more condos, fewer rental units, and what rental units there are the landlords become abusive and stop keeping up the residences.  (And you end up with current tenants making a mint subletting…)  In the end, some people benefit enormously, but generally not the poor people who are likely to need to move from time to time for work.  What is a better policy?  To remove the rules that buildings can’t be more than 2 or 3 stories and allow high rise apartments to be built.  But nobody wants that!  It’s really a policy to protect people with safe jobs already living there and to keep outsiders out.  There’s simple economic theory behind it, just as there is for minimum wages (same graph, actually, taught in the same section of Micro 101), but there’s also robust empirical evidence that rent control never helps the people it claims to help.  Rent control hurts poor people.  Allowing more units to be built helps poor people.  But “people who care” listen to the NIMBYs with their specious arguments and want rent control, not high-rises.

Some economists are bad people.  I cannot disagree that there are some people who choose this field because they really identified with the simplistic assumptions of Econ 101 and then they never took a public finance course because they don’t believe there’s a role for government or that that could be a useful course.

But there are legitimate reasons that economists who do care about things will disagree on the minimum wage and the cut point for the minimum wage.  (And a lot of this is going to depend on geography!  Housing costs alone vary enormously.)  Bringing these potential problems up does not make an economist a bad person.  Good economists who are good people want to do things that genuinely help and they do not want to accidentally hurt the people they are trying to help.  Good economists care about unintended consequences and they advocate for policies that help the most vulnerable.  (Bad economists just care about reducing moral hazard at the expense of total social welfare.)

Don’t just knee-jerk say someone is a bad person because a tweet on a complex issue doesn’t agree with Bernie Sanders.  One of my colleagues from Vermont says that nobody ever goes to Bernie for help because even though he talks a good game, he doesn’t actually do anything.  Complex issues are complex.  There are trade-offs.  And you can’t demonize someone for bringing up the trade-offs.  Because when you do that, you end up hurting the people you want to help.  Republicans have blinders on.  Democrats don’t need them too.  Evidence-based policy for all!

*I don’t know her very well, but I have seen her present several times.  She’s an extrovert and very good with faces and names, so she knows everyone and everyone knows her.  I am basing her wonderful personness on the body of her work and her interpretations of said work.  She asks important policy questions that show she cares about people and doesn’t start with bigoted assumptions like some economists do.  As a caveat, I didn’t much care for her naloxone paper when it came out but I can’t remember why not.  I think there were competing papers and I found the other one more convincing, but I’m not sure.

**She has a wonderful Ban the Box paper that shows that it decreases hiring among young black men but increases it among women and older black men… and of course white men.  IIRC, she has another paper on how algorithms and machine learning predicting recidivism will be racist if their inputs are racist.

***Many of the people who study minimum wage are jerks to each other.  There’s two big camps that have nasty arguments because results are extremely sensitive to specification choices and I recently told my managing editor I did not want any more minimum wage papers as co-editor.  People working on minimum wage are mostly white dudes because nobody else wants to get into the fray.  But there are a lot of them.  Note that because there are over 500 papers, you can find a paper that supports whatever your agenda is!  And the top economists disagree with which ones are better quality (and yes, there’s a correlation between their political ideology and whether or not they believe they should include state specific time trends, for example).

****Monopsony power is like monopoly power except the firm is the only purchaser of inputs, for example, it’s the only employer in town.

Disclaimer:  I am currently paying undergrads $14/hr which is higher than the university average, new grad students $15/hr (I have to get special permission for this!), and experienced grad students $18/hr (for some reason the top salary allowed for experienced student workers is higher than for starting student workers).  I don’t have pre-docs or post-docs.

I imagine this post might spark some discussion, but my Monday only has an hour free between in-person class and zoom meetings, so I might not be able to moderate/respond until late or even Tuesday depending on how exhausted I am and how much attention I have to pay at the meetings.