The Muriel boat lift, for example, raised unemployment rates by 2% for a few months in Miami, but eventually internal migration resolved that issue. But internal migration is a cost, Esther,. Saying that eventually over time the effect is gone does not count the adaption costs.
The adaption costs can be very high even because the minimum wage is government regulated. We might have a lot of unemployed dying at the age of 48 on the streets of LA, but these internal migrants are not counted, they are not unemployable. The effect on minimum wages is minimal because the regulated wage is unreachable.
Esther is trying to assume constant returns to scale and that requires a lot of internal migration which she does not count. She is a string pusher., trying to take her local experiments and apply them in a central based string pushing. It does not work.
No comments:
Post a Comment