There’s a new paper about the minimum wage and its effects on crime. I wrote a paper (with Amanda Agan) about the minimum wage and crime (here’s a slightly older ungated version). I have received several requests to comment on the new paper because, based on the abstracts, our papers appear to generate conflicting results. Spoiler alert: they don’t. Sorry to disappoint those who came looking for an academic blood bath.

I am happy to talk about the new paper, by Fone, Sabia, and Cesur (FSC), but let’s get the big part out of the way. Our paper on the minimum wage looks at criminal recidivism, defined as a return to prison, for those who have been released from prison. These are people whose conviction resulted in them being in incarcerated in a prison (not jail) who, on average, served nearly 2 years and were subsequently released at age 35. The FSC paper uses arrest data. Their principal observation regards property crime arrests committed by 16-24 year olds.

Our two papers identify fundamentally different results about fundamentally different populations that, in my opinion, hinge on completely different mechanisms.

Our paper is old news, so I won’t belabor the point. Succinctly, we found that minimum wage increase of $0.50 reduced the probability an individual returns to prison within 3 years by 2.15%. The availability of state EITCs also reduced recidivism, but only for women.

The FSC paper use’s Uniform Crime Report data to look at arrests. Here’s the figures and tables that I’ll focus on for our discussion:

FSC find that property crime arrests increase for 16-24 year olds in an event study estimate, where an increase in the minimum wage of at least $1 serves as an “event”:

Property crime arrests in their diff-in-diff estimate reaffirm this estimate. They also, however, observe negative effects on property crime arrests on 35-49 year olds, though the coefficient is too noisy to be statistically significant. These results are similar to ours, though because we were looking at individual recidivism we had the benefit of estimating over ~6 million observations (vs the 45 thousand county-years of FSC).

When FSC dig into the crime categories further, there is no effect on burglary, robbery, or auto theft. The property crime effect is entirely in larceny. Let’s also note the positive effect of the minimum wage on vandalism.

Here’s an important tidbit: UCR data does not distinguish between misdemeanor petty (petit) larceny and felony larceny. One last result: employment is noisily declining for 16-24 year-olds who have not yet completed high school.

Let’s add it all up: when a state increases the minimum wage by at least $1, we observe an increase in larceny and vandalism arrests of 16-24 year-olds, without any effect on robbery, burglary, auto theft, or violent crime, all while reducing the employment of 16-24 olds who have not yet completed high school. Can you see where I’m going with this?

Shoplifting. When states significantly increase the minimum wage, employers stop hiring teenagers. Those teenagers, laden with time but bereft of spending money, rediscover the allure of the five-finger discount. That is my interpretation of these results and nothing about these results seems strange to me or at odds with the earlier findings in our paper on the minimum wage and recidivism.

I don’t think the authors have really done anything wrong here. I could manufacture some of the usual gripes if I really wanted too, but the identification strategy seems at least broadly sound and the data is widely used. The estimated magnitudes seem plausible. If I was going to complain about anything, it would probably be the imputed $766 million dollar price tag placed on the externality, but I’m also not well-versed in the costs of shoplifting (and in case you’re reading something into my tone, I do not think shoplifting can be dismissed as unimportant). If I had to hang my hat on something, though, I’d say that’s probably on the hefty side. In footnote 48 they consider a a more conservative estimate of a $128 million dollar externality. That seems more plausible to me.

The minimum wage literature is one we all, every single one of us, bring our own political and economic baggage to. When our paper found that the minimum wage reduced criminal recidivism, a lot of people latched on to it because what they heard was “minimum wages stop crime”. I’m sure a lot of people will latch on to FSC’s new paper because they want to hear “minimum wages cause crime”. The reality, of course, is vastly more nuanced. We should expect these laws to have heterogeneous effects born of complex interactions, particularly when we stratify populations into those interacting with an institution as rife with peculiarities and pathologies as the US criminal justice system.

I think the single most under-considered development in labor economics has been the revolution in the real-time measurement of labor output over last decade (although there was an interesting article recently in AEJ: Applied looking at the shift in the late 70s from standardized to variable wages within firms). A lot of ink has been spilled agonizing over why “no one wants to work” in fast food establishments for $15-$20 an hour, without appreciation for how much those jobs have been transformed by operations monitoring and management. Simply put, there’s no hiding on the line anymore. You’re either producing or you’re not and everyoone knows. Now, whether subpar performance will quickly result in termination is unclear in such a tight labor market, but you can be sure that your inadequate productivity will be quantified and communicated to you. These numbers may create a feeling of shame or inadequacy, perhaps even sufficient to make you work harder, increasing the disutility of labor faster than your earnings increase. Your prospects for advancement or a pay increase will correlate directly with your measured productivity. The spread of such indignities, previously reserved for those working assembly lines, sales, or independent contract work, are not limited to fast food:

“Workers at the plant told Bloomberg News that Tesla monitors keystrokes to track how long employees spend per task and how much of the day they spend actively working.“

⁦@josheidelson⁩ with a big $TSLA scoop https://t.co/vG2bsn84Yb

— Sean O'Kane (@sokane1) February 14, 2023

There have long been lines of work where work could be paid “piecemeal” i.e. paid per unit output. These jobs were typically limited to those where labor’s output was discrete, easily measured, and where quality could be distilled into sufficient/not sufficient categorization. Great for sewing textiles, bad for writing code or making gourmet food. When you’re working a piecemeal job you can be rewarded for high output, but it’s a double-edged sword. There’s no obscuring your contributions within the uncertainty of productivity or the efforts of others. It’s the difference between singing in a 50 person choir or playing golf. No one listening to that choir will ever know I can’t hit a note, even after dozens of performances. My fraudulence on a golf course is transparent after a single swing.

The revolution in labor measurement has all kinds of ramifications for the nature of work, management-labor relations, and the distribution of income.

1) Being watched is stressful, being measured doubly so.

2) Nobody likes being judged. Always being watched will only heighten labor skepticism and antagonism towards management.

3) Bigger rewards for higher producers can only increase income inequality even if wages rise for everyone

Better measurement could increase labor’s share of their marginal revenue product simply by reducing uncertainty and risk. This increased share, combined with greater productivity, could raise incomes for all laborers. Even under these assumptions, however, greater measurement is can still increase income inequality because it will likely reward the most productive workers more than the least.

It’s hard to usefully speculate on the exact mechanisms through which transitioning to piecemeal work affects labor. Perhaps it’s safer to just be grossly reductionist: increased monitoring and measurement of labor threaten’s every worker’s god-given right to do a half-assed job.

Worker’s, like all of us, are under-appreciated in the guile and sophistication they bring to bear when maximizing their utility. It’s not just where and when we work, it’s how we work. Some want to climb the ladder, some don’t. Some work to live, some live to work. Some jobs sustain us while we participate in high risk-reward labor tournaments in our side-hustles (music, art, indie game design, etc).

Doing a half-assed job is a tried and true strategy to living a great life if you have the tremendous fortune of living in a wealthy country. Employing half-assed workers, however, is a bit trickier and I suspect the rise in monitoring and measurement is a market response that reveals that the conflict between half-assed labor and management has never solved.

How will such conflicts be reconciled? My suspicion is that this will eventually come out as a mutually beneficial gain, on average, for all parties. Workers will be monitored and measured more tightly, which will make work less pleasant, but they will be paid more and work less. I suspect many of us would actually prefer to work 40% harder for half the hours and make double the pay. There will be people who lose in the transition, however. Every workplace has a slacker who floats from job to job, doing far less than the bare minimum, riding the wave of uncertainty that keeps their unemployment at least temporarily intact. For many occupations that strategy will cease to be viable. I’d feel bad for them…but I don’t. Maybe that makes me a grumpy old man, but if if anyone was taking bets I’d put a lot of money down that for the last 50 years it’s been mostly white men riding off the labor of others…and it’s been mostly the over-contribution of women to marginal output that has subsidized their quarter-assed counterparts.

The days of management trying to increase productivity by exhorting motivational platitudes while dangling the carrot of advancement while pretending to know who deserves credit are over. We know who’s doing the work. Which means that even if you are still formally receiving a salary, your salary will so tightly hew to your productivity that it will effectively be a piece rate. That also means, by the way, that management has no excuses anymore, either. You know who’s getting the work done. The same forces undermining a half-assed labor strategy will hopefully continue to undermine casual cronyism and discrimination as well.

But don’t worry, humans are clever. We’ll game each new system along the way. You’ll never find a more whole-assed effort than someone trying to figure out how to half-ass their job.

What would you guess SMET is?

Would you like to do SMET?

What if you got caught looking at SMET?

SMET was the first acronym used by the National Science Foundation to stand for “science, technology, engineering, and mathematics”. There was a re-branding of the name that we owe to the American biologist Judith Ramaley. The STEM acronym sounds much better!

Does a cosmetic change matter? Will more students study STEM than SMET? The US government funds initiatives aimed at encouraging students to study STEM fields, so answering this question is important.

Some of these initiatives date back several decades, such as the National Science Foundation’s (NSF) Advanced Technological Education program, which was started in 1992 to provide funding for two-year colleges to develop programs that promote STEM education and prepare students for technical careers. The National Math and Science Initiative (NMSI) was established in 2007 and offers training and support for teachers to improve STEM instruction in K-12 schools. In 2009, the White House launched the “Educate to Innovate” campaign, which aimed to improve STEM education in American schools and increase the number of students pursuing STEM careers. Additionally, several federal agencies, including NASA and the Department of Energy, have launched initiatives over the years to promote STEM education and provide opportunities for students to engage in STEM-related research and projects. These efforts reflect a recognition of the importance of STEM fields to the country’s future economic competitiveness and national security, and a commitment to ensuring that all students have access to the skills and knowledge needed to succeed in these fields.

There is something to be said for branding and marketing in relation to science education. However, I see this as an open question: How much does branding matter, as opposed to the fundamentals of the pay and quality of available jobs that students can get in STEM fields?

I’m preparing a public lecture on my “Willingness to Be Paid” paper. Using an experiment, I examined what factors affect a student’s decision to do a computer programming job. I tried out an encouraging message which turned out to not work in the sense that it did not increase participation. I’m planning to open my talk with the SMET affair as an example of what is being tried with messaging and the tech labor supply.  

I like Patrick Maholmes and, all else equal, prefer the Kansas City fan base if for no other reason than they seem less interested in settting things on fire.

But alas, the Eagles are probably going to win because the value of quarterback play became so dominant that the incentives to innovate and invest in alternative strategies has finally resulted in an equilibrium where the opposing team is dominant in every other area of play. Which is a long-winded way of saying that annoying old people who rail on about line play, running the ball, and defense, who have been consistently wrong about everything for 20 years, finally get to have their moment in the sun and say “I told you so” and you, smart person who values your mental health, will simply smile and nod and not take the bait to argue with them further.

Or maybe Maholmes’s ankle is back to 70% and they win? Who knows? We’re talking about a sport that, 19 games deep, is almost entirely determined by the two interacting random probability generators: injuries and general luck.

Enjoy the excuse to socialize and eat junk food, which for many of us is 90% of the utility proposition in watching the game.

*probably

Policies can create their own entrenched consituencies, bad policies doubly so. Restrictions have long strangled the supply of housing in California, much to the detriment of the states inhabitants. This cost, of course, was spread across the entire population, while the resulting dramatic increase in housing prices proved to be a windfall for incumbent property owners. The immediate constituency of beneficiaries, however, has probably been less important than the capital committed property owners that followed, taking on larger and larger debt obligations, each generation of new homebuyers more terrified than the last that the rug might be pulled out from under them, more committed to maintaining an obiviously terrible status quo that they nonetheless found themselves bought into.

Economists refer to this as a transitional gains trap. Once the effects of the policy are internalized into the market, no one subsequent to the first generation of incumbent beneficiaries ever benefits. But, and this is most important, if the policy is *undone*, those who bought into the market after the policy was in place stand to lose. In the case of California housing, the potential losses could be significant.

Imagine you bought this house today (care of Andrew Baker’s cheeky tweet):

Now imagine you just bought this house today, only to read this headline tomorrow:

Darrell Owens gives all the necessary details. The point isn’t whether this or other policy eventswill the be the final blow to the California housing blockade. Or this legal case. Or this political agenda. The point is that the walls are closing in. Transitional gains traps depend on sufficiently concentrated benefits and diffuse costs. It may be the simple case that the costs of the California housing are so enormous that they are economic crippling for the majority of the population. The costs are too big to politically diffuse.

Transitional gains traps are impossible to costly get out of. Someone always loses. All you can really do is try not to fall in them yourselves. Even if the house actually does have good bones.

Yesterday Noah Smith wrote a persuasive blog post about what police reform might look like. Similarly Jen Doleac wrote a thread about policing reform, in the comments of which Kevin Grier absolutely gave me the business while righteously criticizing the implication that law enforcement institutions could be even remotely trusted to reform themselves. I always find it awkward trying to respond to criticism when I essentially agree with every point being made.

she left murdering unarmed citizens off her list of favorite strategies. Not every post that mentions you is worth amplifying Mike!!!!

— Angus “burnt ends" Grier 🦧🍄🚀🥃 (@ez_angus) January 29, 2023

I’m fine with Kevin’s criticism, to be clear, because I think it comes from the frustration that policing has arrived at it’s state along a tide of winking half-asssed internalization of some reforms exceeded only by the whole-assed petulant refusal of others. While the broader chattering classes and technocrats have been trying to adjudicate whether the dominance of White Supremacy within the culture of policing necessitated its wholesale defunding, law enforcement has managed to quietly be on an apathetic half-strike in major cities while bearing no material cost that I am aware of and remaining as militarized as ever.

What I do want to reconcile is the notion that the decentralization of policing across states, counties, and cities is an opportunity for reform because I’m not optimistic we’re going to get any meaninful action at the national level. What we can hope for, agitate and campaign for, is state and local reform. No one is getting elected to the presidency if they can have the “defund the police” label successfully slapped on them. A town, however, can fire its police and reform an entirely new force under different job expectations, with different hiring objectives (de-escalation, human services), qualifications (higher training bars), and bigger salaries. A town or small state can change the burden on police unions or even hire entirely parallel to them. We can decide that law enforcement is important work where you can make a professional salary with attractive benefits, but like other such jobs you can be fired with or without cause because someone else wants your job and might be able to do it better.

Yes, we've innovated our way right to the top of the table. pic.twitter.com/1RmJipdsNl

— Angus “burnt ends" Grier 🦧🍄🚀🥃 (@ez_angus) January 29, 2023

I don’t want to give the impression I think the problem of law enforcement in America can be solved with a few paragraphs. I guess all I want to do is remind you that Charles Tiebout has a pretty good point: local public goods always face the competition of those offered by their neighbors. Maybe the single most important contribution any of us can make to improving the deadly, destructive disaster that is the current state of law enforcement is to push your local government for reform. Your state could end police retention of seized property or end qualified immunity. Your sheriff’s office deputies could be at-will employees. Your city could require the police union to self-insure against civil lawsuits.

Because it only takes one place to start a Tiebout chain reaction, a place where people want to live and work that much more because they’re less afraid that the police are going to hurt their family or friends. Less likely to ignore theft and assault. Less likely to tase their teacher to death. Beat their neighbor to death. That’s sounds like a nicer place to live or start a businesss. The time for half measures is over, which unfortunately probably means the opportunity for national reform has passed. There are 18,000 police departments that can and need to be reformed.

Maybe we can start with yours.