Category Labour markets
Sticky wages and unemployment rate differentials
This is a short note to add to Bryan Caplan's note on Tyler Cowen's post on sticky wages. Suppose workers differ in quality, where "quality" is defined as "quality in the eyes of potential employers". In equilibrium there will be an equilibrium relationship between the distribution of wages and quality. Higher quality workers will get […]
Visible minorities: diversity in the labour market?
One worthwhile Canadian initiative is the concept of visible minorities. A person is a member of a visible minority if he or she is "non-Caucasian in race or non-white in colour." There is a list. The idea of a visible minority is intimately tied to another worthwhile Canadian initiative: employment equity. Not to be confused […]
Minimum wages and employment
"An increase in the minimum wage will raise workers' incomes, which will increase aggregate demand, which will increase output and employment. So would an increase in union wages." I remember hearing that argument a lot in the 1970s. You don't hear it as much nowadays, but it still lives on in the underworld of economic […]
As if we needed more fuel on the fire…
The Celebrating pointlessness: minimum wage edition thread has been going on strong for over two weeks. Can we turn the fire into a raging inferno? From today’s Huffington Post: Minimum Wage, and Controversy, Reaches Distant U.S. Islands, on a Government Accountability Office on the minimum wage which was released today. A PDF of the study […]
The outlook for long-term unemployment
Does anyone remember the Employment Insurance psychodramas of last spring and summer? Threats were made, deadlines given, and lines were drawn in the sand. It all ended up in a temporary extension of benefits, and the issue went away. Although almost all of the noise was made about reducing the EI eligibility requirements, the real […]
Human capital: literal truth, fairy tale or myth?
This is from my Carleton colleague Frances Woolley: Part I: Education Every undergraduate student in labour economics gets told the story of human capital. Education and experience make people more productive. The skills so acquired are called “human capital.” This explains why some people earn more than others, and why some countries are […]
Where did the unemployed manufacturing workers go?
I noted a couple of months ago that employment losses in the recession were generally concentrated in the goods-producing sector: some 350,000 jobs were lost there, and there's been little in the way of recovery. On the other hand, job losses in the services sector (about 3 times as large) were on the order of […]
Saturday Night Fever: Roger Farmer, multiple natural rates, search theory, and share prices
Roger Farmer is an old grad skool buddy. We were in the same MA and PhD class at UWO in the late 1970's, though we have lost touch a bit over the decades. That's a sort of disclaimer. Roger preferred punk to disco; I think he was right on that score. But Peter Diamond's "A […]
Even more on the ineffectiveness of minimum wages as an anti-poverty measure
As was the case in Ontario, recent evidence from the US illustrates the pointlessness of using the minimum wage as a way to reduce poverty (h/t Craig Newmark): Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor? Using data drawn from the March Current Population Survey, we find that […]
Of horses and men
As a teenager I read Kurt Vonnegut's novel Player Piano. It's stuck in my economist's mind ever since. It describes life in the near-future when technology and machines have destroyed the demand for nearly all human labour, except for the labour of a small, highly-educated minority. The vast majority of the population would be unemployed, […]
Worthwhile Canadian Initiative 
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