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Home Publications Blogs Beat the Press There is Evidence That Cities Can Combat Inequality

There is Evidence That Cities Can Combat Inequality

Monday, 07 April 2014 04:53

The NYT had a piece on efforts to address inequality at the local level which might have left readers with the impression that there is little that cities can do. The only economist quoted in the piece was Edward Glaeser, who was very dismissive of the idea that cities could do anything that would have much impact.

It would have been useful to include the views of University of Massachusetts economist Arin Dube or Berkeley economist Michael Reich, both of whom have done extensive work on state and local minimum wages. Reich recently co-authored a book on the impact of local measures in helping low-income workers.

Comments (4)Add Comment
written by LSTB, April 07, 2014 6:47
Places with the greatest disparity between rich and poor also tend to be those with the fewest affordable houses. Here is how the 100 largest metro areas compare on those two measures.

But that implies "unequal" cities have high, privatized land values. Hm. If those cities were to tax those land values and cut their other taxes, like sales and building taxes...

No, that would mean that owning property makes one wealthy, and everyone knows that taxing wealth hurts the poor even more than a minimum wage hike.
Absence of High Wages is Not Evidence of Low Wages
written by Last Mover, April 07, 2014 7:38

Evidence? What evidence? As any sock puppet for the 1% knows, the absence of evidence is not evidence of absence, which of course means the presence of evidence is not evidence of proof or potential proof, because the absence of any opposing evidence that could refute that evidence - despite being absent - is given equal weight of proof by what is known as the Rumsfeld known-unknown standard.

Let's hear it for the absence of evidence to justify raising wages in America anytime anywhere for anyone except for those economic policies that have consistently failed, shall we?

As any economic illiterate knows, the mere absence of high wages is no proof that they're not there or could be there though austerity measures so severe, they amount to economic waterboarding that create the incentives necessary before people will work for those high wages, don't they.
written by liberal, April 07, 2014 8:10
Sadly, the most effective and just way of fighting inequality was proposed over a hundred years ago, but economists---even extremely smart and progressive economists like Dean---continue to ignore it: land value taxation.

For Christ's sake, even Adam Smith seems to have understood this---and he was writing before Ricardo.
... too typically academic shallowness on the US minimum wage ...
written by Denis Drew, April 07, 2014 9:42
Cross-posted from DeLong's:

My separate, minor smack down of Piketty (for a few paragraphs) about his only too typically academic shallowness on the machineries of the US minimum wage):
* * *
“On the basis of these studies (Card and Kruger) it seems likely that an increase in the minimum wage of nearly 25% (from $7.25 to $9 an hour) currently envisaged by the Obama administration will have little or no effect on the number of jobs. Obviously, raising the minimum wage cannot continue indefinitely; as the minimum wage increases, the negative effects on the level on employment eventually win out. If the minimum wage were doubled or tripled, it would be surprising if the negative impact were not dominant.”
* * *
How much of the 45% of the US workforce are likely to get laid off over a 3.5% increase in overall prices that a $15 an hour minimum wage hike would cause? Did anyone ever ask the 45% how they would like it handled? Ask how many would die to quit one job (a lot!)? To stretch a point: if a one-third of the 45% were laid off (crazy1?) they 45% would take home the same money – for less work.

Does the fact labor costs typically are only a small fraction of the price tag actually dawn on academics? I wouldn’t get that impression – correct me somebody if I am wrong – simple thought that simple connection is. ??? Wal-Mart prices go up 3.5% at $15 an hour. The high labor costs extreme fast food (where 65% of the business goes through the drive through in their 4-wheelers) would go up 25% — better bring a peanut butter sandwich going shopping? – the 35% who walk in will be getting an average $8000 a year raise.

If the Berkeley economics faculty had to walk home alone through the most dangerous parts of nearby Oakland late every night they would be a little more overanxious about getting the minimum wage upped. And – they would understand how much a difference in quantity makes in quality – to wit: a $10 an hour minimum wage would probably change the gang situation not at all; a $12 an hour wage would probably improve things, but I don’t think too much (from being around this country for 70 year – including 15 years in New York City’s very bad lands); a $15 an hour minimum wage would probably evaporate the gangs.

100,000 out of 200,000 (the latter my estimate) Chicago gang-age minority males are in drug selling gangs today. The only surge in unemployment likely to be caused by a $15 an hour minimum wage here might be them wanting to go to work in the legit world all of a sudden.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.