Yesterday, I posted my first piece on this series exploring the minimum wage and demonstrating why utilitarian arguments are so powerful. Today, I will delve into the utilitarian idea surrounding the minimum wage, and consequently an economic analysis of this policy. Economic theory is an excellent way to understand the consequentialist impacts of a policy in marketplace, but this post will also cover the limitations of theory vs data (for the data analysis, see my subsequent post).
The Economics of the Minimum Wage
Economics allows us to understand how market actors and institutions impact the distribution and exchange of resources. Continue reading →
The minimum wage debate has reentered the political stage with special promotion by President Obama, starting with his State of the Union Address this past January. The political huffing and moral rhetoric surrounding the topic may give the impression that it is a straightforward issue; on one side are the corporate employers who are watching out only for their bottom lines and their profit margins, while on the other stand the working poor who could use a helping hand from legislators.
As is often the case in politics, the actual issues at hand are far more complex and interesting than the rhetoric would have you believe, and I think debate about the minimum wage misses not only a great deal of understanding of the other side, but also a great deal of research done on this topic. This series of posts (next and final posts) will construct a thorough picture of the motivations behind the minimum wage through an analysis of both the politics surrounding the minimum wage as well as the extensive economic research done in the past 20 years. Continue reading →
Recently, it has become fashionable to douse yourself in freezing cold ice water. Since the Ice Bucket Challenge has gone viral these past few weeks, I’ve wondered about the economic efficiency of the phenomenon. The marketing method has been highly successful; the ALS Association has raised over $15 million, obliterating the $1.8 million from the same period last year.
Source: www.stockphotosforfree.com. Licensed under Creative Commons Attribution 2.0 Generic License.
People are pretty excited to participate in a big cultural movement, especially if it’s as easy as shooting a 30 second video. Partaking in a cultural movement where not participating means not donating or raising awareness for charity pushes even more people to do it. It’s also easy (and important) for PR conscious celebrities (and also celebrities who care) to get in on the action. Continue reading →
The advancement of the digital age has transformed financial transactions, both in high powered trading and in everyday use. According to Nilson Reports, some $4 trillion in purchases occurred using credit, debit or prepaid credit cards in 2012. Online shopping is omnipresent, and smartphones have even rendered trips to your local bank unnecessary, as checks can be deposited directly into your account from wherever you are. The one area of payments that remained undisrupted by the digital age was the concept of currencies themselves. Continue reading →
Additionally, a nice post off Hacker News about Steve Jobs and Apple. While I do like many of Apple’s products, their culture always seemed a bit counter to the open and collaborative culture of the internet. This discussion of Steve Jobs helps explain why. Of course, it’s important to mention that Steve Jobs is extraordinarily accomplished and incredible, but his leadership came with a price.
Bitcoins are a relatively new form of currency incorporating aspects of cryptology, networking, and economics. For a more in depth understanding, check out this link off of Hacker News.
Bitcoins offer a mix of unique options. Their use is secured like other monetary transactions, but they’re also anonymous, as each bitcoin transaction is linked to unique public bitcoin key. Furthermore, bitcoins are governed by an open source algorithm, not a government, meaning that they cannot be arbitrarily created or destroyed, affecting the economy due to policy initiatives.
It can be difficult for people to accept that something that has no intrinsic value can work as a currency. While there are lots of fiat currencies, those currencies are often enforced by a government (Federal Reserve Notes must be accepted by law in the United States). But if enough places begin to accept bitcoins, and many websites are, their value will continue to grow.
The real question right now is whether the meteoric rise in bitcoin value is part of a bubble or not. Of course, since the value of any currency is based on what people’s perception of the currency is, as well as what you can buy with it, calling it a bubble is pretty easy; bitcoins’ value is of course artificial, there’s no denying that. The beginning of the rise in bitcoins’ value occurred when more websites started to accept bitcoins as payment. Whether the improved liquidity of bitcoins warrants their value at close to $70/coin is a more difficult question. I know I’m not buying any bitcoins right now, but knowing whether speculators will move out of the bitcoin space in the near future is almost impossible to tell.