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Home Publications Blogs Beat the Press Wall Street Journal Discovers CEPR's Findings that Many College Educated Workers Are Getting the Minimum Wage

Wall Street Journal Discovers CEPR's Findings that Many College Educated Workers Are Getting the Minimum Wage

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Saturday, 30 March 2013 21:09

It's always nice when a major news outlet picks up on work by CEPR, even if it takes a year and some other economist to produce similar findings. Therefore, I was naturally happy to see this piece in the Wall Street Journal reporting that almost 300,000 college educated workers are earning the minimum wage.

The WSJ piece is based on a new paper by three Canadian economists that finds that many college educated workers are employed at jobs that don't require college degrees. This is bad news not only for the college educated workers, but also for less-educated workers who are displaced by these college educated workers.

My colleagues at CEPR, John Schmitt and Janelle Jones, had done a short paper last April pointing out that minimum wage workers were much more likely to be college educated and have considerably more work experience than in prior decades. I'm glad to see that the WSJ has finally discovered this news.

Comments (5)Add Comment
Yglesias on Market Morality
written by TravisV, March 30, 2013 11:00
Mr. Baker,

I'd love to hear your thoughts on this new post from Yglesias:

"The myth of ownership and the distribution of income"

http://www.slate.com/blogs/moneybox/2013/03/30/myth_of_ownership_and_the_distribution_of_income.html
Consumer confidence report
written by Dave, March 31, 2013 3:29
I follow this blog and saw that a few days ago Mr. Baker was concerned about consumer confidence. Then yesterday I say this report seemingly contradict that:

http://www.bloomberg.com/news/2013-03-29/consumer-spending-in-u-s-increases-by-most-in-five-months.html

Thoughts?
It's Explained by Crowding Out: That's How Free Markets Work
written by Last Mover, March 31, 2013 7:54
Don't get too excited about this discovery from the WSJ. From their point of view it's just another crowding out theory that's fits right in with the others:

College grads crowd out non-college workers for minimum wages.

Unemployment among non-college workers is structural for lack of skills to earn minimum wages.

Underemployed college grads are crowded out for above minimum wages by seasoned older college grads with vast experience and wide array of skills.

Seasoned older college grads with vast experience and wide array of skills are crowded out by corporations that couldn't manage a two car funeral but are experts at bringing down their own company while exploiting employees and extracting economic rent from consumers.

It all started when the government crowded out the private sector with socialist Keynesian spending and created the housing bubble.
Consumer Confidence
written by Dean, March 31, 2013 8:43
Dave,

I think the consumer confidence measures are given far too much attention. The expectations index is highly erratic and basically tells us nothing. The current conditions index generally follows consumption patterns, but also has a substantial error component. Certainly you would not want to make any grand claims about a one month change in just one of these indices.
...
written by watermelonpunch, March 31, 2013 11:47
@ Last Mover that's exactly what hilarity went through my head!!
Unemployment among non-college workers is structural for lack of skills to earn minimum wages.

It seems that's EXACTLY what some of these turkeys think!

They seem at every point to advocate people going into debt they'll never get out of in order to attain one or more degrees in order to work on the highway construction turning the sign around from "slow" to "stop" or working in a big corporate office's cafeteria wiping down the tables.

They want it to get to the point where they can require an MBA & 100wpm typing skills for the office receptionist position that requires no math nor any typing, and pays $8.00 per hour!!

Even better if young people go into huge debt to attain a nursing degree at a for-profit college that will give the graduate neither the education necessary for a nursing position, nor a degree recognized as viable by any health care facility... so that these young people wind up sweeping floors somewhere for garnished minimum wages!

The arguments are ludicrous at times if you play the scenarios through to their obvious outcomes, but that doesn't stop these structural argument nonsense believers.

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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.

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