The Reports: December 30-January 3
On the podcast this week: the irrelevance of the federal minimum wage, the limits of economic theory, the millennials are coming, and more!
The national pay floor for workers stands at $7.25 an hour. It hasn’t been adjusted for a decade, which represents the longest period it has ever gone unchanged. With Washington policymakers remaining polarized on virtually every key issue, there is little chance that the federal minimum wage will be altered anytime soon.
As indicated by writer Ben Casselman, one would have been forgiven during a few weeks this summer for thinking that America was racing headlong into a recession. Financial markets were turbulent, the yield curve inverted, business leaders were becoming nervous, and seemingly every financial news outlet was indicating that the U.S. economy was in trouble due to worsening trade tensions and a weakening global economy. For now, those fears have been utterly extinguished.
Fewer than a tenth of the students who take an introductory economics course will major in economics. Among those who choose to major in economics, fewer than one in one hundred will become economists.
It’s not supposed to work this way. When Americans borrow more money, including our federal government, interest rates are supposed to rise. This presumption is built into virtually every economic forecasting model.
As indicated by writer Jeffrery Sparshot, America’s suburbs are welling again. Millennials priced out of many popular large cities are flocking to suburbs. U.S. suburbs now account for 14 of the 15 fastest growing communities with populations in excess of 50,000.