Minimum Wage - Revision history

Rasmusen p1vaim: /* The Card-Kreuger Study */

2021-10-13T19:05:42Z

‎The Card-Kreuger Study

Rasmusen p1vaim: /* The Neumark-Wascher Critique: Using Better Data Reverses the Conclusions */

2021-10-13T19:04:45Z

‎The Neumark-Wascher Critique: Using Better Data Reverses the Conclusions

Rasmusen p1vaim: /* Other Stuff */

2021-10-13T19:04:16Z

‎Other Stuff

Rasmusen p1vaim: /* The Card-Kreuger Study */

2021-10-13T15:36:18Z

‎The Card-Kreuger Study

Rasmusen p1vaim: /* The Welch Critique of the Data */

2021-10-13T15:31:21Z

‎The Welch Critique of the Data

Rasmusen p1vaim: /* Other Stuff */

2021-10-13T15:27:01Z

‎Other Stuff

Rasmusen p1vaim: /* Other Stuff */

2021-10-13T15:17:12Z

‎Other Stuff

Rasmusen p1vaim: /* Other Stuff */

2021-10-13T15:14:25Z

‎Other Stuff

Rasmusen p1vaim: /* The Card-Kreuger Study */

2021-10-13T15:12:43Z

‎The Card-Kreuger Study

Rasmusen p1vaim: /* The Card-Kreuger Study */

2021-10-13T15:11:15Z

‎The Card-Kreuger Study

@@ Line 1: / Line 1: @@
-==The Card-Kreuger Study==
+==The Card-Krueger Study==
 * Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," David Card &Alan B. Krueger,  ''The American Economic Review,'' Vol. 84, No. 4. (Sep., 1994), pp. 772-793.
 They find that increasing the minimum wage  increases employment at  fast-food restaurants. This result is destroyed by two other papers. Neumark & Wascher replicate the study using clearly better data and find that employment falls, not rises. Welch notes that the Card-Krueger data was collected with a confusing survey method and the data clearly has big mistakes, showing wild swings in employment and wages, including wages falling in many restaurants after the minimum wage increase, and to illegally low levels.
 ==The Neumark-Wascher Critique: Using Better Data Reverses the Conclusions==

@@ Line 17: / Line 17: @@
 In contrast both to their original study and to our replication, their reanalysis generally finds small and statistically insignificant effects of the increase in New Jersey’s minimum wage on employment, and they conclude that “the increase in New Jersey’s minimum wage probably had no effect on total employment in New Jersey’s fast-food industry, and possibly had a small positive effect”. }}
-*[https://www.economics.uci.edu/files/docs/workingpapers/2006-07/Neumark-08.pdf  "MINIMUM WAGES AND EMPLOYMENT:
+*[https://www.economics.uci.edu/files/docs/workingpapers/2006-07/Neumark-08.pdf  "MINIMUM WAGES AND EMPLOYMENT: A REVIEW OF EVIDENCE FROM THE NEW MINIMUM WAGE RESEARCH,"]  David Neumark and William Wascher  October 2006:
 {{Quotation|
 In a review piece on Card and Krueger’s book Myth and

@@ Line 184: / Line 184: @@
   following 7-8 months, with an average loss
   of 19.8 employees---a 42% decrease.}}
 ==Other Stuff==
@@ Line 191: / Line 192: @@
 Aaron Mamula, 6/17/2021. A nice replication with links to the original data. No surprises.
-Brown, Charles. 1995. “Myth and Measurement: The New Economics of the Minimum Wage: Comment.” Industrial and Labor Relations Review 48, no. 4 (July): 828-830.
+*[https://www.nobelprize.org/prizes/economic-sciences/ 2021 Nobel Prize for Card press release]
-Deere, Donald, Kevin M. Murphy, and Finis Welch. 1995. “Employment and the 19901991 Minimum-Wage Hike.” American Economic Review Papers and Proceedings 85, no. 2 (May): 232-237.
+Deere, Donald, Kevin M. Murphy, and Finis Welch. 1995. “Employment and the 19901991 Minimum-Wage Hike.” ''American Economic Review Papers and Proceedings'' 85, no. 2 (May): 232-237.
-Freeman, Richard B. 1995. “Myth and Measurement: The New Economics of the Minimum Wage: Comment.” Industrial and Labor Relations Review 48, no. 4 (July): 830-834.
+Freeman, Richard B. 1995. “Myth and Measurement: The New Economics of the Minimum Wage: Comment.” ''Industrial and Labor Relations Review 4''8, no. 4 (July): 830-834.
-Hamermesh, Daniel S. 1995. “Myth and Measurement: The New Economics of the Minimum Wage: Comment.” Industrial and Labor Relations Review 48, no. 4 (July): 835-838.
+Hamermesh, Daniel S. 1995. “Myth and Measurement: The New Economics of the Minimum Wage: Comment.” ''Industrial and Labor Relations Review'' 48, no. 4 (July): 835-838.
-Kim, Taeil, and Lowell J. Taylor. 1995. “The Employment Effect in Retail Trade of California’s 1988 Minimum Wage Increase.” Journal of Business and Economic Statistics 13, no. 2 (April): 175-182.
+Kim, Taeil, and Lowell J. Taylor. 1995. “The Employment Effect in Retail Trade of California’s 1988 Minimum Wage Increase.” ''Journal of Business and Economic Statistics'' 13, no. 2 (April): 175-182.

@@ Line 3: / Line 3: @@
 * Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," David Card &Alan B. Krueger,  ''The American Economic Review,'' Vol. 84, No. 4. (Sep., 1994), pp. 772-793.
 *[https://www.nber.org/papers/w5224 "The Effect of New Jersey's Minimum Wage Increase on Fast-Food Employment: A Re-Evaluation Using Payroll Records,"] David Neumark & William Wascher. Card and Kreuger's employment data was bad. They got it by phoning up restaurants---or having research assistants do it. N-W got administrative payroll data from the restaurants. This took 5 years to appear in print, as: Neumark, David, and William Wascher. 2000. [https://www-jstor-org.proxyiub.uits.iu.edu/stable/pdf/2677855.pdf  “Minimum Wages and Employment: A. Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment.”] ''American Economic Review'' 90, no. 5 (December): 1362-1396.
-David Card & Alan B. Krueger, [https://www.jstor.org/stable/2677856   "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply."] ''American Economic Review'', December 2000, 90(5), pp. 1397-420.
+*David Card & Alan B. Krueger, [https://www.jstor.org/stable/2677856   "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply."] ''American Economic Review'', December 2000, 90(5), pp. 1397-420.
 *[https://religiopoliticaltalk.com/neumarkwascher-bitch-slap-cardkrueger/  citing the N-W book,  p.71 , "3.4.5 Reactions to the State Case Studies"]:
-{{Quotation| The Card-Krueger data were elicited from a survey that asked managers or assistant managers “How many full-time and part-time workers are employed in your restaurant, excluding managers and assistant managers?” This question is highly ambiguous, as it could refer to the current shift, the day, or perhaps the payroll period, and the respondents’ interpretation of it could differ in the observations covering the periods before and after the minimum wage increase. In contrast, the payroll data referred unambiguously to the payroll period used by the restaurant. Reflecting this difference, the data collected by Card and Krueger had much greater variability across the two observations than did the payroll data, with changes that were sometimes implausible...
+{{Quotation| The Card-Krueger data were elicited from a survey that asked managers or assistant managers “How many full-time and part-time workers are employed in your restaurant, excluding managers and assistant managers?” This question is highly ambiguous, as it could refer to the current shift, the day, or perhaps the payroll period, and the respondents’ interpretation of it could differ in the observations covering the periods before and after the minimum wage increase. In contrast, the payroll data referred unambiguously to the payroll period used by the restaurant. Reflecting this difference, the data collected by Card and Krueger had much greater variability across the two observations than did the payroll data, with changes that were sometimes implausible.<br>
-.<br>
+...
 In contrast both to their original study and to our replication, their reanalysis generally finds small and statistically insignificant effects of the increase in New Jersey’s minimum wage on employment, and they conclude that “the increase in New Jersey’s minimum wage probably had no effect on total employment in New Jersey’s fast-food industry, and possibly had a small positive effect”. }}

@@ Line 44: / Line 44: @@
 ==The Welch Critique of the Data==
-Welch, Finis.  [https://www-jstor-org.proxyiub.uits.iu.edu/stable/2524360 "Myth and Measurement: The New Economics of the Minimum Wage: Review Symposium: Comment."] Industrial and Labor Relations Review, July 1995, 48(4), pp. 842-49.
+Welch, Finis.  [https://www-jstor-org.proxyiub.uits.iu.edu/stable/2524360 "Myth and Measurement: The New Economics of the Minimum Wage: Review Symposium: Comment."] ''Industrial and Labor Relations Review,'' July 1995, 48(4), pp. 842-49. Welch absolutely destroys Card & Krueger. He shows that their data just can't be correct because individual restaurants have wild swings in employment and wages, and how that was probably the result of bad survey design that confused the restaurants into giving inconsistent answers:
 {{Quotation|
- dels and how they do
+Although the notoriety surrounding Myth suggests important
   conclusions that challenge economists' fun-
   damental assumptions, I am convinced that
@@ Line 56: / Line 54: @@
   should institute for the collection, analysis,
   and release of primary data.
-.<br>
+...<br>
- cism. The numbers are incredible.
+The numbers are incredible.
   It is not clear that the interview process
   was formalized. There has been no re-
@@ Line 67: / Line 65: @@
   Immediately after the introduction the
   employment quiz begins:
   Q1. How many full-time and part-
   time workers are employed in your
   restaurant, excluding managers and
   assistant managers?
   Q2. And how many managers and
-  assistant managers?<br>
+  assistant managers?
   The interview form has two spaces for the answer to the first question (full-time
   and part-time) and one space for the sec-
@@ Line 79: / Line 80: @@
   it fails to define part- and full-time; and its
   compound nature probably confused re-
-  spondents.5 The wage questions are no
+  spondents.  The wage questions are no
   better:
@@ Line 94: / Line 95: @@
   the second is for "minimum wage" so that
   the coder can fill in the applicable value.
-  Question 5 has two spaces, one for part-
+  Question 5 has two spaces, one for part-time and the other for full-time. Although
   the second wage question appears to have
   been intended to draw two responses, many
@@ Line 108: / Line 108: @@
   to indicate whether it is taken from Ques-
   tion 4 or Question 5.
+...<br>
   Among the 79 survey records shown for
   Pennsylvania, 68 have valid wage records in
@@ Line 137: / Line 137: @@
   of the 19 lowered the starting wage to the
   second wave minimum of $5.05 per hour!
-.<br>
+...<br>
-w. Strikingly, 46 of the 311 (15%) that
+Strikingly, 46 of the 311 (15%) that
   initially had full-time employees reportedly
   had none by the second interview, 7-8
@@ Line 157: / Line 157: @@
   dominated by error?
   Among the 378 stores with valid non-
-  zero employment in both survey waves, av-
+  zero employment in both survey waves, average first wave employment is 21.14 and
   average second wave employment is 21.27.
   The trivial difference in averages between
   survey waves masks astonishing changes
-  within stores. The largest gain is 34 em-
+  within stores. The largest gain is 34 employees, the largest loss is 41.5, and the
   standard deviation of the change is 9.0
-  employees! In examining changes in em-
+  employees! In examining changes in employment between the two survey waves it is
   important to recall that noise-dominated
   data regress toward means.
-.<br>
+...<br>
-t. The 21 restaurants
+The 21 restaurants
   with the smallest employment averaged only
 .5 employees at the time of the baseline
@@ Line 178: / Line 174: @@
   second interviews, employment increased
   for every one of these restaurants, with an
-  average gain of 5.4 employees-a 71 % in-
+  average gain of 5.4 employees---a 71 % increase in 7-8 months. At the opposite
- crease in 7-8 months. At the opposite
+  extreme, the 22 largest restaurants averaged 47.4 employees at the baseline and
   employment fell for every one of them in the
   following 7-8 months, with an average loss
-  of 19.8 employees-a 42% decrease.}}
+  of 19.8 employees---a 42% decrease.}}
 ==Other Stuff==

@@ Line 41: / Line 41: @@
 which suggests that “any changes in the relative demand shocks” affecting two geographic areas will
 easily “swamp the effect of a higher minimum wage” (p. 837).  }}
 ==Other Stuff==
@@ Line 57: / Line 203: @@
 Kim, Taeil, and Lowell J. Taylor. 1995. “The Employment Effect in Retail Trade of California’s 1988 Minimum Wage Increase.” Journal of Business and Economic Statistics 13, no. 2 (April): 175-182.

← Older revision		Revision as of 15:17, 13 October 2021
Line 59:		Line 59:

	Welch, Finis. [https://www-jstor-org.proxyiub.uits.iu.edu/stable/2524360 "Myth and Measurement: The New Economics of the Minimum Wage: Review Symposium: Comment."] Industrial and Labor Relations Review, July 1995, 48(4), pp. 842-49.		Welch, Finis. [https://www-jstor-org.proxyiub.uits.iu.edu/stable/2524360 "Myth and Measurement: The New Economics of the Minimum Wage: Review Symposium: Comment."] Industrial and Labor Relations Review, July 1995, 48(4), pp. 842-49.
		+	{{Quotation\|
		+	dels and how they do
		+	empirical research. Although the notori-
		+	ety surrounding Myth suggests important
		+	conclusions that challenge economists' fun-
		+	damental assumptions, I am convinced that
		+	the book's long-run impact will instead be
		+	to spur, by negative example, a much-
		+	needed consideration of standards we
		+	should institute for the collection, analysis,
		+	and release of primary data}}

← Older revision		Revision as of 15:14, 13 October 2021
Line 58:		Line 58:
	Kim, Taeil, and Lowell J. Taylor. 1995. “The Employment Effect in Retail Trade of California’s 1988 Minimum Wage Increase.” Journal of Business and Economic Statistics 13, no. 2 (April): 175-182.		Kim, Taeil, and Lowell J. Taylor. 1995. “The Employment Effect in Retail Trade of California’s 1988 Minimum Wage Increase.” Journal of Business and Economic Statistics 13, no. 2 (April): 175-182.

−	Welch, Finis. "Myth and Measurement: The New	+	Welch, Finis. [https://www-jstor-org.proxyiub.uits.iu.edu/stable/2524360 "Myth and Measurement: The New Economics of the Minimum Wage: Review Symposium: Comment."] Industrial and Labor Relations Review, July 1995, 48(4), pp. 842-49.
−	Economics of the Minimum Wage: Review
−	Symposium: Comment." Industrial and Labor
−	Relations Review, July 1995, 48(4), pp. 842-49.