Michael Reich

Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data

Traditional estimates of minimum wage effects include controls for state unemployment rates and state and year fixed-effects. Using CPS data on teens for the period 1990 – 2009, we show that such estimates fail to account for heterogeneous employment patterns that are correlated with selectivity among states with minimum wages. As a result, the estimates are often biased and vary with the source of identifying variation. Including controls for long-term growth differences among states and for heterogeneous economic shocks renders the employment and hours elasticities indistinguishable from zero and rules out any but small disemployment effects. Dynamic evidence further shows the nature of bias in traditional estimates, and it also rules out more negative long run effects. We do not find evidence of heterogeneous employment effects in different parts of the business cycle. We also consider predictable versus unpredictable changes in the minimum wage by looking at indexation of the minimum wage in some states.

Social structures of accumulation : the political economy of growth and crisis

Introduction David M. Kotz, Terrence McDonough and Michael Reich Part I. The Theory of Social Structures of Accumulation: 1. Long swings and stages of capitalism David M. Gordon, Richard Edwards and Michael Reich 2. How social structures of accumulation decline and are built Michael Reich 3. Interpreting the social structure of accumulation approach David M. Kotz 4. Social structures of accumulation, contingent history, and stages of capitalism Terrence McDonough 5. The regulation theory and the social structure of accumulation approach David M. Kotz Part II. History, Institutions, and Macroeconomic Analysis: 6. The construction of social structures of accumulation in US history Terrence McDonough 7. The financial system and the social structure of accumulation Martin H. Wolfson 8. Alternative social structure of accumulation approaches to the analysis of capitalist booms and busts Thomas E. Weisskopf 9. The politics of the American industrial policy debate Jim Schoch Part III. Class, Race and Gender: 10. Shopfloor relations in the postwar capital-labor accord David Fairris 11. Towards a broader vision: race, gender and labor market segmentation in the social structure of accumulation framework Randy Aldelda and Chris Tilly Part IV. The International Dimension: 12. Accumulation and crisis in a small and open economy: the postwar social structure of accumulation in Puerto Rico Edwin Melendez 13. Apartheid and capitalism: social structure of accumulation or contradiction? Nicoli Nattrass 14. The social structure of accumulation approach and the regulation approach: a US-Japan comparison Tsuyoshi Tsuru 15. The global economy: new edifice or crumbling foundations? David M. Gordon Afterword: new international institutions and renewed world economic expansion David M. Kotz, Terrence McDonough and Michael Reich.

The Economic Effects of a Citywide Minimum Wage

This paper presents the first study of the economic effects of a citywide minimum wage—San Franciscos adoption of an indexed minimum wage, set at

Minimum Wage Shocks, Employment Flows, and Labor Market Frictions

8.50 in 2004 and

Becoming a high-performance work organization: the role of security, employee involvement and training

9.14 by 2007. Compared to earlier benchmark studies by Card and Krueger and by Neumark and Wascher, this study surveys table-service as well as fast-food restaurants, includes more control groups, and collects data for more outcomes. The authors find that the policy increased worker pay and compressed wage inequality, but did not create any detectable employment loss among affected restaurants. The authors also find smaller amounts of measurement error than characterized the earlier studies, and so they can reject previous negative employment estimates with greater confidence. Fast-food and table-service restaurants responded differently to the policy, with a small price increase and substantial increases in job tenure and in the proportion of full-time workers among fast-food restaurants, but not among table-service restaurants.

Credible Research Designs for Minimum Wage Studies

We provide the first estimates of the effects of minimum wages on employment flows in the US labor market, identifying the impact by using policy discontinuities at state borders. We find that minimum wages have a sizable negative effect on employment flows but not on stocks. Separations and accessions fall among affected workers, especially those with low tenure. We do not find changes in the duration of nonemployment for separations or hires. This evidence is consistent with search models with endogenous separations.

The Microeconomics of Conflict and Hierarchy in Capitalist Production

We discuss an emerging employment system characterized by a high degree of employment security with flexible job assignments, employee involvement in problem solving and continuous improvement, and continuous training of employees. We call this model the SET system (for Security, Employee involvement and Training) and examine case studies of five U.S. firms that are attempting to establish or maintain a SET system. We find that SET systems are difficult to implement in a gradual and partial manner. The three elements of SET reinforce one another and firms that are successful in adopting SET have made an investment to implement all three SET elements simultaneously.

Social Structure of Accumulation Theory

The authors assess the critique by Neumark, Salas, and Wascher (2014) of minimum wage studies that found small effects on teen employment. Data from 1979 to 2014 contradict NSW; the authors show that the disemployment suggested by a model assuming parallel trends across U.S. states mostly reflects differential pre-existing trends. A data-driven LASSO procedure that optimally corrects for state trends produces a small employment elasticity (–0.01). Even a highly sparse model rules out substantial disemployment effects, contrary to NSW’s claim that the authors discard too much information. Synthetic controls do place more weight on nearby states—confirming the value of regional controls—and generate an elasticity of −0.04. A similar elasticity (−0.06) obtains from a design comparing contiguous border counties, which the authors show to be good controls. NSW’s preferred matching estimates mix treatment and control units, obtain poor matches, and find the highest employment declines where the relative minimum wage falls. These findings refute NSW’s key claims.

Labor in the era of globalization

This paper develops a formal model of worker-employer relations within capitalist firms. The results illuminate the effects of property rela tions on the organization of work, the monitoring of workers, the extent of wage hierarchies and incentives and inefficiencies in such firms. A comparison model of a workers cooperative demonstrates that the nature of the political-economic system, not just technology or information and transaction costs, affects produc tion conditions.

Micro-Macro Linkages in High-Performance Employment Systems

In this two-volume set, the editors present seminal articles by leading SSA scholars describing the development of SSA Theory and its wider application.