Tag Archives: labour

Implementing the wishes of the minority

Before we start, I should make it clear: I feel that Brexit is a supremely bad idea, and if I had any say at all we would not be doing it.  It will mean huge economic and political upheaval and pain in the short term, for no gain in the long term.  The referendum was won on lies, misinformation, and encouraging ignorance.

But vote out the UK did, and the question ever since has been what form the break will take.  Economists have, in the main, been hoping for a ‘soft Brexit’, where access to the Single Market would be retained and the UK would suffer less of a financial shock.  However, recent reports from the government have indicated that a ‘hard Brexit’ is more likely – leaving the Single Market with the aim of controlling immigration and regulations. Continue reading

Distinguishing demand effects and supply effects

Greg Mankiw has today highlighted how Bryan Caplan discusses fundamental inconsistencies in arguments over the minimum wage.

In some of his research, joint with Alan Krueger, Card finds that increases in the minimum wage have negligible effects on employment.  In other research, on the Mariel boatlift, Card finds that increases in the supply of unskilled workers have negligible effects on wages and employment of existing workers.

Caplan notes that these results are hard to reconcile: The former suggests that labor demand is highly inelastic, whereas the latter suggests it is highly elastic. Continue reading