Dean Baker's Blog, page 168

Disagreeing With Paul Krugman: His Friends Probably Do Vote Against the Interest of the Working Class (White and Other)

Paul Krugman told readers that intellectual types like him tend to vote for progressive taxes and other measures that benefit white working class people. This is only partly true.

People with college and advanced degrees tend to be strong supporters of recent trade deals [I'm including China's entry to the WTO] that have been a major factor in the loss of manufacturing jobs in the last quarter century, putting downward pressure on the pay of workers without college degrees. They also tend to...

Andy Puzder and the Trump Gang Want to End Freedom of Contract for Workers

In an article discussing the Trump administration's attitudes toward unions, the Washington Post misrepresented so-called right-to-work laws.

"Some union leaders are worried that a Trump administration would attempt to introduce a national right-to-work law — allowing any employee anywhere to exempt themselves from participating in a union — and block unions from deducting dues from paychecks."

Workers already have the option not to participate in a union. Workers cannot be compelled to join...

Trump Pick for Labor Secretary Badly Confused on Restaurant Business

That would have been an appropriate headline for the NYT piece profiling Andrew Puzder, Donald Trump's pick to be head of the Labor Department. According to the piece, Puzder, who runs a restaurant chain:

"strongly supports repealing the Affordable Care Act, which he maintains has helped create a 'restaurant recession' because rising premiums have left middle- and working-class people with less money to spend dining out."

In fact, restaurant spending and employment have risen rapidly since th...

NYT Should Have Pointed Out That It Is Easy for Trump to Resolve Conflict of Interest Problem

A NYT article that discussed Donald Trump's conflict of interest problem because of his business empire somehow couldn't find anyone who knew a way to do it without forcing him to risk selling it a large loss. Actually there are fun and easy ways to allow Donald Trump to quickly eliminate his conflict of interest problem without risking large losses. The article should have pointed out this fact to readers so they fully recognize how extraordinary Trump's behavior is in ignoring his conflict...

Patent Monopolies: The Root of the Problem of One-Size Fits All Health Care Insurance

The NYT had a column by Nicholas Bagley and Austin Frakt noting the problem in the current insurance market that has all workers at a company get the same plan, regardless of their income. The price of the policy is a much larger share of a low-paid worker's wage than a high-paid worker's wage, implying a much larger effect on their after-health care insurance income.

As the column notes, a big part of this story is the high price of new medical technology. It is worth noting this high price...

Is a Higher Minimum Wage the Key to More Rapid Productivity Growth?

Economists have been disappointed by the extraordinarily weak productivity growth of the last decade. Low productivity growth means that there is less room for improvements in living standards and more leisure.

Fortunately there may be an answer. Timothy Lee at Vox tells us that higher minimum wages are leading to more rapid automation. According to his piece, higher wages are pushing McDonald's around the country to experiment with touchscreen ordering. This will raise productivity at McDona...

How to Gain Support for Trade: Stop Rigging It to Redistribute Upward

The NYT had an article presenting the comments of several people genuflecting over the lack of public support for current trade policy (wrongly referred to as "free trade"). The obvious reason for this lack of support, which is overlooked by those cited in the article, is that the intention and the outcome of trade policy has been to redistribute income upward.

The point of making it as easy as possible to move a factory to Mexico, and then import the output back to the United States, is to g...

Trade, Trump, and the Economy: What Does Greg Mankiw's Textbook Say?

Harvard professor, textbook author, and occasional New York Times columnist Greg Mankiw told readers today that Donald Trump's economic team is wrong to worry about the trade deficit.

"The most important lesson about trade deficits is that they have a flip side. When the United States buys goods and services from other nations, the money Americans send abroad generally comes back in one way or another. One possibility is that foreigners use it to buy things we produce, and we have balanced tr...

Uber Can't Compete

Traditional taxi companies are required to have their drivers undergo extensive background checks, including finger-print based checks. Apparently Uber lacks the competence to deal with similar requirements to ensure the safety of their passengers. According to the Washington Post the company is prepared to pull out of the state of Maryland if it requires such checks.

It may well be that the Uber management lacks the competence to deal with the safety requirements that traditional taxi compan...

Do Tariffs Never Protect Jobs?

The answer may not be as simple as readers were led to believe in a NYT article on the topic. The article explains several ways in which tariffs can be counter-productive. As evidence that tariffs tend to be net job losers, the article cites a study by the Peterson Institute on tariffs that President Obama imposed on tires imported from China, ostensibly to counter dumping. The study concluded:

"Some 1,200 American tire-making jobs were preserved, but American consumers paid $1.1 billion extr...