A new working paper from the National Bureau of Economic Research finds that significant minimum wage increases can hurt the very people they are intended to help. Authors Jeffrey Clemens and Michael Wither find that significant minimum wage increases can negatively affect employment, average income, and the economic mobility of low-skilled workers. The authors find that significant “minimum wage increases reduced the employment, average income, and income growth of low-skilled workers over short and medium-run time horizons.” Most troublingly, these low-skilled workers saw “significant declines in economic mobility,” as these workers were 5 percentage points less likely to reach lower middle-class earnings in the medium-term. The authors provide a possible explanation: the minimum wage increases reduced these workers’ “short-run access to opportunities for accumulating experience and developing skills.” Many of the people affected by minimum wage increases are on one of the first rungs of the economic ladder, low on marketable skills and experience. Working in these entry level jobs will eventually allow them to move up the economic ladder. By making it harder for these low-skilled workers to get on the first rung of the ladder, minimum wage increases could actually lower their chances of reaching the middle class.
Most of the debate over a minimum wage increase centers on the effects of an increase on aggregate employment, or the total number of jobs and hours worked that would be lost. A consensus remains elusive, but the Congressional Budget Office recently weighed in, estimating that a three year phase in of a $10.10 federal minimum wage option would reduce total employment by about 500,000 workers by the time it was fully implemented. Taken with the findings of the Clemens and Wither study, not only can minimum wage increases have negative effects for the economy as a whole, they can also harm the economic prospects of low-skilled workers at the individual level.
With that in mind, I have some bad news for everyone who likes the idea of young people of color finding work.
At the stroke of midnight today, 19 states increased their minimum wage. Residents of three more and the nation’s capital can expect hikes later on this year.
[…]Federal legislation was met with resistance. though. Republicans argued raising the minimum wage would cause an increase in prices for consumers and low-wage workers likely would face layoffs as companies grappled with the higher costs associated with hiked wages.
Some of those concerns were validated last month by a University of California, San Diego, study. For three years, researchers followed low-income workers residing in states that saw wage hikes and those that did not. The study found that minimum wage hikes had negative impacts on employment, income and income growth.
[…]“Minimum wage supporters have good intentions, but those good intentions cannot repeal the law of unintended consequences,” James Sherk, an expert in labor economics at The Heritage Foundation, told The Daily Signal. He added:
Minimum-wage increases reduce the total earnings of low-wage workers — the higher pay for some workers gets completely offset by the nonexistent pay of those no longer employed.
In its study, UCSD researchers found that after minimum-wage increases, the national employment-to-population ratio decreased by 0.7 percent points between December 2006 and December 2012.
In addition, the study found that minimum-wage increases hindered low-skilled workers’ ability to rise to lower-middle -lass earnings.
So we need to be really careful about setting economic policy based on emotions. Things that sound nice, which we feel will help the poor, actually hurt the poor. We have to have evidence-driven public policy, not feelings-driven public policy. People’s lives are depending on it.
Here’s an update on the Democrat war on vouchers in Louisiana, posted by governor Bobby Jindal in the left-leaning Washington Post. In it, he explains how is trying to reform education in his home state of Louisiana, and how the federal government is trying to stop him for doing that.
We all know the harsh cycle of poverty that exists in the United States and that a disproportionate share of those in poverty are minorities. Studies of health-care outcomes, incarceration levels and economic opportunity all show that education is key to improving quality of life.
Millions of single parents in this country work two jobs to make ends meet, hoping that their children won’t have the same struggles. Hope is their only option because they live in neighborhoods with chronically failing public schools and lack the means to move to better school districts or to send their children to private schools.
Obama and Holder think this should continue to be the reality. In Louisiana, we think the opposite is true. We believe every child deserves the opportunity to get a great education.
That’s why we started a school choice program in 2008 in New Orleans and expanded it statewide in 2012. Low-income families with children in schools graded C, D or F by the state are eligible to apply for a scholarship and send their children to schools of their choice.
The program works. From 2011 to 2013, students who had been trapped in failing schools and now attend scholarship schools showed improvement on literacy and math tests. The share of students performing at grade level rose 7 percent, state data show, even though in 2013, 60 percent of students taking the test had been in their new schools for only eight months. More than 90 percent of parents of students participating in the program reported satisfaction with their children’s schools.
This opportunity is perhaps these children’s best chance to escape the cycle of poverty. No one in their right mind could argue that the Justice Department’s efforts to block the scholarship program will help these kids. This can only be an attempt to curry favor with the government unions that provide financial largess and political power.
President Obama should do the right thing and order the Justice Department to drop the lawsuit. Not because I am asking, but because the parents and children in the scholarship program deserve an opportunity. For generations, the government has forced these families to hope for the best from failing schools. Shame on all of us for standing by and watching generations of children stay in failing schools that may have led them to lives of poverty.
We in Louisiana are rejecting the status quo because we believe every child should have the opportunity to succeed. A scholarship program is not a silver bullet for student success. Maybe a student will perform well in a traditional public school, or a charter school, or a virtual school, but the point is that parents should be able to decide, not bureaucrats in Baton Rouge or Washington.
If the president and the attorney general believe their path is right, I invite them to come to Louisiana and look these parents and children in the eyes and explain why they believe every child shouldn’t have a fair shake.
If the administration does not drop this lawsuit, we will fight every step of the way until the children prevail. Giving every child — no matter race or income — the opportunity to get a great education is a moral imperative.
You might remember that the Obama administration previously went after the D.C. voucher program, which was also for helping poor, minority students. Why are the Democrats doing this? The answer is simple. Come election time, the Democrats rely heavily on the fundraising and activism of the teacher unions. The teacher unions have more money if they have more children trapped in their failing public schools. Therefore, Obama has every incentive to make sure that no child is allowed to leave a failing school. He needs the help of the teacher unions at election time more than he needs to help children who cannot even vote. That’s what is really going on here. Bobby Jindal would love to have the support of teacher unions, but given the choice between helping the unions and helping the children, he’s choosing the children.
The main point here is that the politicians who talk the most about spending more money on education may not be thinking about what is best for children at all. They might be thinking about paying their union supporters more, so that they will do more at election time. An alternative to just giving more money to the unions would be Jindal’s plan of giving money directly to parents and letting parents choose. Parents might not be as politically connected as teacher unions, but if your goal is to help children get an education, then maybe unions and elections don’t matter as much.
I recently conducted a meta-analysis of more than ninety studies on education, and the results suggest that perhaps it is time for America’s leadership and the general public to take a second look at religious private schools. At the risk of immodesty, let me be frank. The study is hugely important because it is the first published meta-analysis to compare the three primary types of American schools: religious private schools, traditional public schools, and charter schools.
A meta-analysis statistically combines all the relevant existing studies on a given subject in order to determine the aggregated results of the research. This meta-analysis yielded results that surprised many by indicating that students from public charter schools did no better than their peers in traditional public schools. In contrast, youth from religious private schools performed better academically than their counterparts in both public charter schools and traditional public schools, even when the results were adjusted to account for socioeconomic status, selectivity, race, and various other factors.
[…]Examining results from all ninety studies, I found that the average academic outcome for religious school students was .28 of a standard deviation unit higher than for traditional public school (TPS) students, while the average for charter school students was only .01 of a standard deviation unit higher. If one converts these numbers to percentiles, the average academic outcome was 11 percentage points higher than that of TPS pupils, while charter school attendees scored about the same as their TPS counterparts.
Translated into more tangible numbers, students who attend private religious schools attain educational levels that average about twelve months ahead of those attending regular public schools. Even when the meta-analysis employed sophisticated controls, which included measures for socioeconomic status, selectivity, gender, and race, youth who attended faith-based schools achieved at levels seven months ahead of both TPS and public charter school students.
One of the most intriguing results of the study is that the racial and socioeconomic achievement gaps are roughly 25 percent narrower in religious private schools than in public schools. This finding is particularly interesting when one considers that over the years the government has spent hundreds of billions of dollars to bridge the gaps, with only limited success. Higher expectations for students, and school leaders’ insistence that pupils take demanding courses, could help to explain these circumstances in faith-based schools.
The meta-analysis focused primarily on scholastic performance, but it also examined student behavior. The results indicated that youth from faith-based schools maintained even a larger edge in behavior than they did in school academics. That is, pupils from religious private schools exhibited fewer behavioral problems, even when socioeconomic status, selectivity, race, and gender were also controlled for. This translates into fewer gangs, lower levels of drug abuse, and greater racial harmony than one typically finds in public schools.
Many people, even this researcher, expected public charter school students to perform somewhere in between the levels achieved by students attending faith-based schools and those attending traditional public schools, given that they were trying to mimic certain aspects of private religious schools.
To the extent that neither traditional public schools nor charter schools are succeeding on a broad scale, it appears that the best hope for American education is religious private schools. Not only are they considerably more economically efficient, but their students also achieve better academic and behavioral results.
I think that it is noteworthy that Democrats opposes allowing parents – especially poor parents – to have a choice of what school their children will attend. The Obama administration even de-funded a voucher program that served poor-minority students. Teacher unions are one of the strongest pro-Democrat special interests. If the Democrat Party has to choose between poor, minority students and their powerful allies in the teach unions, the choice is not a hard one. They choose the teacher unions.
Governors of both parties have promoted education reform, but so far no one has delivered more than Louisiana’s Bobby Jindal. This week he’ll sign two bills that offer a national model for competition and parental choice.
Louisiana’s new laws will essentially give all parents an average of $8,500 to use for their child’s education as they see fit. They can keep their child in their local public school, but they can also try to get Johnny into a more demanding charter school, or a virtual school, or into special language or career-training courses, among other options.
Nearly 400,000 low-income children—a bit more than half of all students—will also be eligible for vouchers to attend private schools. State officials estimate that about 2,000 students will use vouchers this September given private-school capacity limits, but that tens of thousands will do so over time.
Louisiana is also making life easier for charter schools, with new authorizing boards, a fast-track for high-performing networks, and access to facilities equal to that of traditional public schools. The new laws seek to strengthen superintendents and principals over local school boards, which are bastions of bureaucratic and union intransigence.
Nearly as dramatic are reforms in teacher tenure. To earn tenure, teachers will now have to rate in the top 10% (measured in part by student performance) for five of six consecutive years, and any teacher who falls into the bottom 10% loses tenure. No teacher in the bottom 10% can get a raise, while layoffs will no longer hit the junior-most teachers first while ignoring performance.
Mr. Jindal made school reform a second-term priority after winning a landslide re-election last November. By then he had appointed or helped elect reformers to the state superintendent’s office and board of education.
Louisiana voters also had a preview of reform’s potential. Since Hurricane Katrina in 2005, New Orleans schools have become almost exclusively charters—with dramatic academic improvements—and the city has run a small and oversubscribed voucher program since 2008. As for tenure, the reforms attach consequences to a teacher-evaluation system enacted in 2010.
The result: the reforms attracted bipartisan legislative majorities of roughly 60%. Over four votes (two different bills, each having to pass the House and Senate), one-quarter to one-half of Democrats voted for reform, including many black representatives, especially those from New Orleans.
Teachers unions were predictably opposed and even heavier-handed than usual. Michael Walker Jones of the Louisiana Association of Educators dismissed choice on grounds that “If I’m a parent in poverty I have no clue because I’m trying to struggle and live day to day.” Unions pushed principals to cancel school—sometimes giving parents less than 24 hours notice—so teachers could protest at the state Capitol. It was a tired act.
Mr. Jindal joins Indiana’s Mitch Daniels in passing the most far-reaching school reforms, and now they’ll have to follow through to produce better student outcomes. Unions will seize on any troubles as a sign of failure, but success might catalyze similar reforms across the country that could finally improve the life prospects for all American children.
Now is a good time to compare and contrast those reforms with the record of the Obama administration:
“House and Senate Appropriators this week ignored the wishes of D.C.’s mayor, D.C.’s public schools chancellor, a majority of D.C.’s city council, and more than 70 percent of D.C. residents and have mandated the slow death of the D.C. Opportunity Scholarship Program. This successful school voucher program–for D.C.’s poorest families–has allowed more than 3,300 children to attend the best schools they have ever known.
The decision to end the program, a decision buried in a thousand-page spending bill and announced right before the holidays, destroys the hopes and dreams of thousands of D.C. families. Parents and children have rallied countless times over the past year in support of reauthorization and in favor of strengthening the OSP.
Yet, despite the clearly positive results and the proven success of this program, Sen. Dick Durbin, Rep. Jose Serrano, Del. Eleanor Holmes Norton, and Secretary Arne Duncan worked together to kill the OSP. Funding the program only for existing children shrinks the program each year, compromises the federal evaluation of the program, denies entry to the siblings of existing participants, and punishes those children waiting in line by sentencing them to failing and often unsafe schools.
What is incredibly disappointing to low-income families in Washington, D.C. has been the silence of President Barack Obama. The President, who benefited from K-12 scholarships himself, worked on behalf of low-income families in Chicago, and exercises school choice as a parent, has stood silently on the sidelines while his Secretary of Education belittled the importance of helping such a small number of children in the nation’s capital.”
In a study published last year, Patrick Wolf of the University of Arkansas found that voucher recipients had graduation rates of 91%. That’s significantly higher than the D.C. public school average (56%) and the graduation rate for students who applied for a D.C. voucher but didn’t win the lottery (70%). In testimony before a Senate subcommittee in February, Mr. Wolf said that “we can be more than 99% confident that access to school choice through the Opportunity Scholarship Program, and not mere statistical noise, was the reason why OSP students graduated at these higher rates.”
The administration downplays these findings. But the students who attend D.C. public schools are overwhelmingly black and poor, and the achievement gap has a particularly devastating impact on their communities. High school dropouts are eight times more likely than someone with a diploma to wind up behind bars. Some 60% of black male high school dropouts in their 30s have prison records. And nearly one in four young black male dropouts is in jail or juvenile detention.
Mr. Obama says he wants to help all students—not just the lucky few who receive vouchers. But that’s an argument for offering more vouchers to those in need, not for reducing school choice. Policies ought to be weighed against available alternatives, not some unattainable ideal. The alternative to a voucher for families in D.C. ghettos and elsewhere is too often a substandard public school.
The positive effects of the D.C. voucher program are not unique. A recent study of Milwaukee’s older and larger voucher program found that 94% of students who stayed in the program throughout high school graduated, versus just 75% of students in Milwaukee’s traditional public schools. And contrary to the claim that vouchers hurt public schools, the report found that students at Milwaukee public schools “are performing at somewhat higher levels as a result of competitive pressure from the school voucher program.” Thus can vouchers benefit even the children that don’t receive them.
Research gathered by Greg Forster of the Foundation for Educational Choice also calls into question the White House assertion that vouchers are ineffective. In a paper released in March, he says that “every empirical study ever conducted in Milwaukee, Florida, Ohio, Texas, Maine and Vermont finds that voucher programs in those places improved public schools.” Mr. Forster surveyed 10 empirical studies that use “random assignment, the gold standard of social science,” to assure that the groups being compared are as similar as possible. “Nine [of the 10] studies find that vouchers improve student outcomes, six that all students benefit and three that some benefit and some are not affected,” he writes. “One study finds no visible impact. None of these studies finds a negative impact.”
Such results might influence the thinking of an objective observer primarily interested in doing right by the nation’s poor children. But they are unlikely to sway a politician focused on getting re-elected with the help of teachers unions.
There is a difference between Demcorats and Republicans, and the difference is that Republicans think that children do better when their parents can choose a school that works for their child. Republicans are the evidence-based party – they do what’s right. But Democrats do whatever it takes to please their special interest groups.
President Obama’s quest to transform federal courts by appointing unqualified leftist ideologues is worse than previously imagined, according to a mainstream newspaper that reports the notoriously liberal American Bar Association (ABA) has rejected a “significant number” of potential judicial nominees, most of them minorities and women.
This is hardly earth-shattering news considering Obama’s judicial appointments so far. However, the ABA rebuff sheds light into the magnitude of the president’s crusade to stockpile the federal court system, where judges get lifetime appointments, with like-minded activists. In fact, Obama has made it an official policy to “diversify” the federal bench when it comes to gender, race and even life experiences.
But the White House has agreed not to nominate any candidates deemed unqualified by the ABA, the 400,000-member trade association that provides law school accreditation. Though it claims to be an impartial group of lawyers, the ABA usually takes liberal positions on divisive issues and Democratic/liberal nominees are more likely to receive the group’s highest rating of “well qualified” compared to their Republican/conservative counterparts. This has been documented in various studies, including a recent one conducted by political science departments at three Georgia universities.
With this in mind, one can only imagine how deficient Obama’s rejected candidates really are. Their identities and negative ABA ratings have not been made public, but inside sources tell the paper that broke the story this week that nearly all of the prospects were women or members of a minority group. Nine are reportedly women—five white, two black and two Hispanic—and of the five men one his white, two are black and two are Hispanic.
The number of Obama hopefuls stamped “not qualified” already exceeds the total opposed by the ABA during the eight-year administrations of Bill Clinton and George W. Bush, the story points out. That means Obama’s rejection rate is more than triple what it was under either of those previous administrations.
I don’t know for sure, but I expect that the nominees would be people like Obama’s friends: the racist Jeremiah Wright, domestic terrorist Bernadine Dohrn and Marxist Bertha Lewis.
I posted this to highlight another way that electing an unqualified leftist harms the country. It’s no wonder that companies are shipping jobs overseas – what company would want to run afoul of a judge whose only judicial qualification is being a member of politicized left-wing hate groups?