Arin Dube
@arindube
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Provost Prof. of Economics (UMass Amherst). Inequality, labor market policies, and competition. Book project: The Wage Standard. @nberpubs @MITshapingwork
Northampton/Somerville, MA
Joined June 2013
If you are interested in learning more about minimum wages, @attilalindner and I have a new, up-to-date review of the topic, coming out in the Handbook of Labor Economics. Here's the @nberpubs working paper. Link:
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As an American economist, I feel in part it's my own failing (and our collective failing) that so many our my fellow Americans don't yet understand how important and successful this President's economic policies have been.
Experts said that to get inflation under control we needed to drive up unemployment. We found a better way. Under my plan, unemployment has been under 4% for two full years now, and inflation has been at the pre-pandemic level of 2% over the last half year.
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There is no Great Resignation . people are not leaving the workforce. Prime-age employment rate is back to 2019 levels!. What we have is a Great Reshuffling: workers moving to better paying jobs. That's what a competitive labor market actually looks like!.
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Before I hear any more ideas of a payroll tax, bail out, or any other economic stimulus policy in response to COVID-19, I want to see a paid sick leave policy. It's insane not to do it.
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Mr. Dube and two co-authors found that. in just two years, the economy undid about a quarter of the increase in inequality since 1980. Much of that progress, they found, came from workers’ increased ability — and willingness — to change jobs.
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This great 1997 article by Bob Shiller has survey evidence on to why people dislike inflation: they don't believe wages would be very different if inflation were lower. They think inflation makes them worse off from higher prices, as wages would be the same w/o inflation. 🧵
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Pres. Biden can legitimately say: it took us 3 years to fix the inflation that was rising and when I took office. We're entering the fourth year with a lower inflation rate and lower unemployment rate than when I took office. We prioritized healing the economy. #BidenomicsWorks.
The 6-month core PCE change is now very well below the value when President Biden took office, even over half a percentage point lower. Because inflation was already on the rise in January 2021, as the economy started reopening from the global shock. /5
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Pleased to announce that our paper quantifying the overall effect of US minimum wages on low-wage jobs is now forthcoming at the Quarterly Journal of Economics. Here's the current version:
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I found out that my 9 yo apparently kept raising the price of lemonade they were selling on the sidewalk in order to better understand the price sensitivity of demand.
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Can't say this enough. Joe Biden inherited a country plagued by a pandemic, and an economy that was a wreck. Today we have an economy with low unemployment and low inflation, and high real wages that match or surpass pre-pandemic trends for most. It's an incredible feat.
Thing is, I was actually alive in January 2021, and I remember the reality that our covid-inflected lives were complicated, and the economy was a wreck, with millions of people out of work, widespread shortages, and tremendous uncertainty about our economic future.
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The greatest trick Elon Musk ever pulled was convincing the world he was more of an innovator than a rent-seeker. He is a rent-seeker.
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What if I told you that the college wage premium is falling right now, for the first time since 1970s?. Well, it is.
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The effort by center-left technocrats to say the problem was that Democrats went "too far left" in economics is one of the most ridiculous narratives to emerge in this era.
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Let me introduce you to a term: labor hoarding. Refers to when employers-faced w/ a downturn-don't lay off workers but keep them around even though there's not as much work. Why? Because it's costly to recruit/re-train. Right now, we want policies to incentivize labor-hoarding.
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At this point I think Dems need more leadership from the White House on the minimum wage issue than we have seen so far.
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If you want to understand how real wages have risen under Biden, look no further than what the Bills are paying their fans for shoveling snow
The Bills are paying shoveling fans $20 an hour this weekend. Here’s what they paid in previous years:. 1994 — $5/hour ($10.35 in today’s $). 2014 — $10/hour ($12.96). 2016 — $10/hour ($12.78). 2017 — $11/hour ($13.75). 2018 — $12/hour ($14.65). 2022 — $15/hour ($15.70).
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I'm old enough to remember when Republicans would call this high treason.
Trump says he would encourage Russia to attack NATO allies: I said I would not protect our NATO allies. In fact, I would encourage Russia to do whatever the hell they want
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Apparently not enough people have digested this fact so let me say this in plain English. Real wages for most American workers are not only higher than they were prior to the pandemic, but they are about what they would have been if the pandemic never happened.
Average real (inflation-adjusted) wages for Production/Non-Supervisory workers (>80% of US private sector workers) are 2.7% above Jan 2020 levels, and are at pre-pandemic trend. Average for all workers is ~1% above Jan 2020 levels, but below trend. Shows wage compression.
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Things to focus more on:.* Improve vaccine distribution, production.* Economic relief.* UI.* Child allowance.* Raise the Minimum Wage.* Voting rights. Things to focus less on:.* Psychology of GOP politicians.* Slate Star Codex and the Rationalists.
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This short thread summarizes my thinking the perennial question about minimum: "how high is OK?". Tl;dr: we don't yet know, and that's ok. 1/.
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One of the signatures of "third way" politics is to invent problems that don't exist, and offer unpopular solutions to solve non-existent problems. The best thing about the Biden administration is to refuse to abide by these pretend rules.
I hate this flavor of GOP politics so much. If Republicans campaign on destroying Social Security and Democrats campaign on reflexively defending it, that pretty much guarantees nobody is actually going to try to fix the very serious problems with this very important program. 😔.
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I agree as an economist - Biden's plans (if enacted) will likely lead to shared prosperity of sorts we haven't seen before.
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The $300 pandemic UI boost is causing labor shortage even across the pond in U.K.!.
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70% of those with at most high school degree, 66% with some college education, and 61% of college grads support at least as much student debt forgiveness as announced this week. Support is actually stronger among those without a college degree.
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Since there is talk about hierarchies in Econ, let me add another element in the mix besides gender and race. Departmental hierarchy. Can't tell you how many times I've had people who didn't know me looked at my name tag that said "UMass Amherst" and stop paying attention.
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I was asked by the UK Treasury to review intl. evidence on minimum wage, with focus on impact at higher levels. My review is now out. It aims to provide comprehensive, up-to-date assessment of how minimum wages affect labor market, esp jobs. 1/.
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It's almost as if the things some of us were concerned about in late 1990s and early 2010s--that NAFTA led to economic pain, or that proliferation of Walmart pushed down wages, and big corporations' choices mattered in setting wages--were (checks notes) actually correct.
NAFTA (signed by Bill Clinton) led to large job losses in historically low-income US counties which historically voted Democratic but began to move toward the GOP after NAFTA, from Jiwon Choi, @ikuziemko, Ebonya L. Washington, and Gavin Wright
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Tech bros thought they could outsmart the stupid MAGA types to get deregulation, tax cuts and maybe even more H1Bs. MAGA thought they could take tech bros' money and parade them out when convenient but have them shut out of power. I am not sure how it's gonna work out.
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Economist here. Reciting data, because that's what we do - if we're doing our job. Wages are rising strongly for most American workers, and much more so than prices. This is a success of the American economy and policies we've pursued.
I’m tired of economists reciting data to shame people into celebrating the economy when the price of groceries, gas, utilities, and rent is high. We need to go after big corporations and utilities pricing people out of the American Dream.
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I usually wouldn't comment on a N=8 scatterplot, but this particular example turns out to be very useful pedagogically, illustrating the impact of a single, *high leverage*, observation can have on the fitted regression slope. Inclusion of US (just 1 data point) flips the sign.
Proponents of “transitory” inflation cite rising prices as a global phenomenon. True, but 1) our inflation is much higher than peers and 2) there is, unsurprisingly, a relationship between pandemic fiscal response and prices. cc: @TheEconomist
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Hot take:. Wages are growing substantially faster than prices, and that's a very good thing.
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You know GOP Senators know they lost the presidency when they start talking about the national debt.
Senate committee talk from Graham: If we keep the Senate which I think we will and I become Budget chairman. I'd like to create a dialogue about how can we finally begin to address the debt.
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🚨 Difference-in-differences working paper alert 🚨. Our Local-Projections DiD offers a unified approach that encompasses many popular alternatives as specific instances; allows for extensions; and does it all using an OLS regression. 🧵
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Here is my @Slate piece celebrating the legacy of @Alan_Krueger. I owe so much to Alan. And so does the economics profession.
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Here's some data on how economists have updated their priors over time in light of evidence.
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In a better world, the American left would be defending the strong pro-full-employment policies pursued by Biden administration, and argue back against the specious claim much of the rise in inflation were caused by those. Esp since it helped raise wages and lower inequality.
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Is there any doubt that when we look back in time, everyone will agree that the post-pandemic rise and fall in inflation was a widespread, global phenomenon that had little to do with country-specific explanations?
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Beyond the most important task (ending the pandemic), I think if I have one overarching economic advice for the Biden Administration. Relentlessly pursue full employment, and don't let anything (including past practices, polite norms, etc.) stop you from this pursuit.
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The fact that this unhinged thread has 15K likes based on patent falsehoods (i.e., claiming government data on jobs is based on self-reported numbers from Indeed) is bewildering. It combines pseudo-leftist notions with right wing talking points for viral impact. Very bad!.
Here's a thread full of mathematical breakdowns of real numbers on why the economy is actually bad for the majority of participants.
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The college wage premium has *falllen* over the last two years, as my new work with David Autor shows. Here is a sneak peek. Cc @jasonfurman
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Howard Schultz’s problem is that he is a person of means while most Americans also care about variances.
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Fundamentally, there is a narrow set of progressives who have built their identity around covid, and it's very hard for them to let go. I hate to say it, but it's absolutely true.
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🚨New study using new bank-transaction level data: What did ending pandemic UI do to jobs, income, spending?🚨.We find:.*Large drop in share receiving UI.*For every 8 losing UI, 1 found job by Aug.*Added earnings made up for only 7% of benefit loss.*Large 20% drop in spending.1/.
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Compelling evidence presented at #NBERSI today by Attila Lindner & others shows how German national minimum wage raised wages, had no real employment effect overall - but led to substantial reallocation of workers from low-wage "bad" firms to high-wage "good" ones. 1/.
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In the real world, Biden's policies have brought up working class wages more than we've seen in generations, reducing pay gap with the upper class.
1/ @AmerCompass’s new survey reveals how Biden’s policies cater to the upper class and ignore the working class. At 62%, Dems dominate the upper class. The upper class has 3X as many Dems as it does Independents or Republicans, influencing the Biden admin’s priorities. 🧵
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Controversial claim. And I may be badly wrong. But:. In 4 weeks, in the Northeast, we'll likely be done with the pandemic (unless a new variant emerges). Vax+boosters+Omicron will have produced that. Progressives will need to decide how to talk about that fact, if that happens.
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Our "Unexpected Compression" makes it to the FT's chart of the week. Low earners in the US enjoy fastest wage growth
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Social democracy is good for capitalism is an argument not taken seriously enough by most people on the right or the left but is actually reasonably accurate.
There is a strong capitalist case for national health insurance. Note that rates of entrepreneurship are higher in Scandinavia than in the U.S.
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Great new work by @S_Stantcheva on why people hate inflation, following up on Shiller ('99). Big reason: people tend to ascribe wage gains to own efforts, and price inflation to policy. Esp true for those changing jobs (key source of recent wage gains).
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Been reading this paper by Rebecca Diamond & Enrico Moretti about local cost of living diff. It's just really amazing data work. Shows how sometimes basic measurement and descriptive statistics can dramatically improve our understanding about the economy.
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When you come at a thick literature, you best not miss. We had the goods in our 2019 QJE paper. We didn't do a "yet another paper." We showed how to estimate the total impact of the policy on jobs, and a full accounting of the literature to date. No other paper has done that.
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Yes, I sincerely believe @ewarren would make the best president of anyone in the race.
Admit it: you *know* in your heart that @ewarren would make the best president of anyone in the race. So let's celebrate Presidents Day by pitching in to make #PresidentWarren a reality. Donate $4.60, $46, $460, or whatever you can afford to her campaign:
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Min wage opposition often framed as concern for marginal workers who may lose their jobs. Yet in surveys, low-wage voters strongly support raising the minimum wage even as they think it may cost some jobs. You need a heavy dose of paternalism to oppose min wage on that count.
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Wage growth has decelerated and is close to where it needs to be for 2-3% inflation. That means whatever you think is causing price inflation, it's not an over-tight labor market. Pushing for a 5% NAIRU is deeply harmful to American workers.
New paper with @ojblanchard1 and @asdomash shows that the non-accelerating inflation rate of unemployment has increased to near 5 percent, implying a substantial overheating of the economy.
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I am proud of many of my papers but this paper is the one where I feel we really ventured out, and successfully so.
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Once quality improvements like Cheez-it stuffed with even more cheese is taken into account, real standards of living for the median American family has improved dramatically over the past few decades.
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The Black/white wage differential stopped falling by 1980. Since then, it rose from ~20% to ~24% in 2018. Then it fell, and stands under 16% today, an all time low. The tight labor market has led to a historic reduction in racial wage disparities.
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Joe Manchin is a conservative Dem whose politics I disagree with but who is one of the few Dems who can win in his state. Kyrsten Sinema on the other hand is . something else.
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Whatever you may think of the specifics of student loan forgiveness, Joe Biden has been more focused on helping middle and working class Americans ("building from the middle out") than any president for many, many years. Not just poverty relief, but helping the middle.
Biden: "I will never apologize for helping working class Americans & the middle class, especially not to the same folks who voted for a $2 trillion tax cut that mainly benefited the wealthiest Americans and the biggest corporations." . Points to PPP loan forgiveness as precedent.
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Morgan Stanley gets it right when it comes to the impact of raising the minimum wage.
NEW REPORT FROM WALL ST. TITAN MORGAN STANLEY: “Raising the federal minimum wage to $15 an hour would lift millions out of poverty while having little impact on employment levels.” .
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When the choice is between a well-meaning elderly man and a very ill-intentioned elderly man, well it's pretty clear how you should choose.
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Paper published in American Economic Review begs to differ.
@arindube @ArmandDoma I don't really think there is strong causal evidence that NAFTA (as opposed to post-Clinton and especially post-Obama Democrats becoming more left-wing on cultural issues) caused working class voters to abandon the Democratic Party.
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The only useful thing about the GOP proposal is that it reminds us exactly how glad we should be that Dems won the GA Senate races allowing them to pass things using reconciliation.
From what we know, the plan from 10 Republicans appears to cut from Biden’s plan:. — 3 months of UI (knocked down by $100/week).— $350B for states & cities.— Monthly child benefit.— $15/hr minimum wage.— Checks reduced from $1,400 to $1K.— Parts of school $. (list not exhaustive).
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Just your regular reminder that assuming really rich people have deep insights about how to run the economy is a very bad idea.
And 10 years ago he was saying that we couldn't restore full employment because Americans didn't have the right skills 3/
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That's quite a threat from Sweden's unions to fight Tesla's attempt to subvert the Swedish model of labor relations .
Good piece on Tesla's shameful attempts to union bust in Sweden. Solidarity with @ifmetall who are doing amazing work to hold them back
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NEW POLL: Voters strongly support Biden's proposed $400 billion investment into senior care and long-term caregiving. Our poll with @voxdotcom finds it’s one of the most popular provisions in the American Jobs Plan.
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I can't say this enough. 4 million families are getting completely cut off from unemployment benefits with about a month's notice. This didn't need to happen.
@mattyglesias 4 million families were given a month's notice to find a job.
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There are two very important facts you should know about current wage growth in America. 1. Real wages are rising (i.e., wage growth is outpacing inflation: blue, green > red). 2. Wage inequality is falling (i.e., wage growth is stronger at the bottom: blue > green)
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Since the 80s, we've created a landscape that favors a low labor cost strategy, by removing constraints on monopsony. So unsurprisingly, it's teeming with corporate policies that are ill-fit to survive in an environment of tighter, more competitive mkt.
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My paper on minimum wages and the distribution of family incomes is now out in AEJ: Applied Economics.
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This is Day 3 of NY Times reporters *choosing* to write about this issue after a clearly partisan report aimed to stir the pot. So the question answers itself.
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A reminder based on my lecture today:. The expansion of food stamps (now SNAP) led to important improvements in infant health. Moreover, these health gains persisted into adulthood. Punchline: the safety net matters. (H/t @HilaryHoynes @dwschanz )
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When Thanos destroyed a random 50% of all life in the universe in Infinity Wars, was the randomization stratified by planet?. He said half of humanity would survive, suggesting so. Hard to guarantee otherwise. But what about by continent, country, demographics (e.g., age)?.
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Couldn't agree more with @AOC . Biden is one of the most successful presidents in modern American history with an incredible legislative record to help the working class and fight climate change.
AOC: Trump is around the same age. They could have gone a high school together and Trump has 91 indictments and I know who I'm going to choose. It’s going to be the one on most successful presidents in modern American history that passed the inflation reduction act,…
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The idea that wages are set competitively, i.e., W=MRPL, is mostly false. But the idea that wages are set based on a standard model of monopsony, MCL=MRPL, may also be false. Rather, imperfect competition in labor market means wage setting is guided by a lot of "other stuff.".
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The idea that Trump is better at managing the US economy than Biden is at stark odds with facts.
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PSA for fellow male economists: don't engage in EJMR. Ideally, don't even look. I have looked a few times, as people forward me stuff, and I apparently attract a lot of hate there. But choose not to engage and post there. It's an act of solidarity with your female colleagues.
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Sometimes it's good to have a sense of history. For actual "cancelling" in economics, you can go back to the 1970s, when leftist economists with stellar credentials were systematically denied tenure at top tier institutions. Eg, Sam Bowles at Harvard.
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I think if we are being honest about failures on the left, failure to do cost/benefit analysis post-vax was an important one.
Controversial claim. And I may be badly wrong. But:. In 4 weeks, in the Northeast, we'll likely be done with the pandemic (unless a new variant emerges). Vax+boosters+Omicron will have produced that. Progressives will need to decide how to talk about that fact, if that happens.
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At this point we are seeing increasing evidence that the shareholder revolution as well as managerial ideology were important parts of the increase in inequality after 1980.
Establishments of firms that experience an increase in ownership by larger and more concentrated institutional shareholders have lower employment and wages. Shareholder power mainly reallocates rents away from workers to shareholders.
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Groper-in-chief offers us his expert opinion about the dynamics of groping.
The Al Frankenstien picture is really bad, speaks a thousand words. Where do his hands go in pictures 2, 3, 4, 5 & 6 while she sleeps? . .
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An update to work with @davidautor & @AnnieMcGrew1. The Unexpected Compression in wages has persisted, even as labor market tightness subsided. Tl;dr ~40% of the rise in wage gap between 10th & 90th percentile in 1980-2019 was reversed in past 3 years. 🧵.
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Bob Solow, RIP. Your wit and insights were an inspiration to me. Here I found your brutal quips on those who taught me macro at Univ Chicago to be quite memorable!
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One of the most surreal experiences during my graduate studies at Univ of Chicago was Gary Becker explaining to 1st year grad micro class in late '90s that domestic violence was not inefficient and "merely" a distributional issue, and that feminists were confused. Crickets.
Like so many, I was dismayed by this story. So, I decided to see what economics had contributed to our understanding of DV. To assess, I searched NBER for “domestic violence” in the title/abstract. I didn’t expect to find much. I didn’t. But what was there is powerful. Thread….
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At the end of the day, the only reason I went into economics was the hope my work had some chance of making a small difference in making the world a better place. If it weren't for that, I would never have pursued this career.
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@rortybomb @mattyglesias Instead of giving "free" books rationed with waiting lines, we should use book tax credits to build a book ownership culture.
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I don't know if reporting economic facts changes anyone's minds but someone has to do it. Glad Claudia is helping fill the void.
Most Americans are better off financially now than before the pandemic. Full stop. Jobs, paychecks, spending, wealth, and financial security have made big gains, offsetting the burden of higher inflation. That's true for most families. The good news goes far beyond the rich.
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In the real world, workers' pay isn't stuck at February 2020 level. For most Americans, pay has risen substantially more than prices since pre-pandemic: real (i.e., inflation adjusted) wages have grown. Ignoring that is malpractice.
These are the numbers people care about most. And indeed, they were better 4 years ago than they are now.
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New data through December shows wage growth strongly outpacing inflation. While the reduced gap between non-managerial vs managerial wages has remained (a good thing!), 2023 was a time of broad-based growth in real wages for most workers. An American success story!
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The idea of de-growth is a radical failure of imagination among part of the left. We can promise, and deliver, a much better future than that.
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Facts beg to differ. President Biden has presided over a historic reduction in wage inequality fueled by strong real wage growth at the bottom and middle--benefiting working class Americans.
Vance: The Biden Administration policies have benefited billionaires, Trump’s policies benefited working people
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A very useful interview with Esther Duflo about wage effects of low-skilled migration. I also want to use to use this to highlight how silly it is to argue that the Nobelists this year don't believe anything unless they are RCT's. They believe in careful empirical work.
"There is no reason to fear low-skilled migration.". Nobel prize-winning economist Esther Duflo says "the effect of low-skilled migration on low-skilled wages is zero".
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Having written extensively about how real wages have risen strongly for working class Americans since 2019, let me be clear about a few things, on both the facts, and how we should interpret them. 🧵.
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PSA: when Beyoncé sings "I quit my job" she is referring to job to job transition, not that she stopped working.
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In my @ProSyn commentary, I provide updated evidence on how the tight labor market has raised real wages for low and middle wage workers, and why policies by @JoeBiden deserve credit. 1/
While US workers experienced a 2.8% increase in real wages over the past four years, workers in other G7 economies faced stagnant or negative wage growth. That reflects US policies designed to tighten the labor markets, notes @UMassAmherst’s @arindub.
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PSA: if you find some workers are somewhat unwilling to enter a sector (restaurants) where risk of infection is still not negligible, consider twice before you attribute it to overly generous UI. After all, we heard a lot of this last summer too, which turned out to be false.
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