Morning, all. Here's a glance at my midweek morning reading:
The beat goes on about the minimum wage
The Manhattan Institute's Scott Winship says a long piece in Sunday's New York Times made the case for a minimum wage increase appear "stronger than it really is." Some research purports to show that raising the minimum wage does not increase unemployment. If that were the case, by all means, raise it. And raise it not just to $15 an hour but to $50 or $100. Winship says some of the data showing no effect on unemployment from a higher wage floor is flawed. That leaves us with basic logic, not to mention the irrefutable law of supply and demand. If you raise the price of something, be it a good, service or labor, what happens to the demand for it?
It was never intended to be an anti-poverty program
The American Action Forum has a nice study on the minimum wage, starting with its history: It was introduced during the Great Depression to protect children and factory workers from harsh conditions. It was never intended as an anti-poverty program. There are better ways to help the poor without setting up a barrier to entry for unskilled labor. The AAF provides lots of facts and tables as well. Only 3.2 percent of hourly workers -- and 1.9 percent of all wage and salary workers -- earn the minimum wage or less. "Since so few working people in poverty actually earn at or near the federal minimum wage, very few would benefit from a minimum wage increase," AAF policy analyst Ben Gitis writes. What other subject inspires so much research and attention yet affects so few individuals?
About those drones
Not so fast, says Massachusetts Senator Ed Markey. He was talking about Jeff Bezos' "60 Minutes" segment on Sunday, where the Amazon.com CEO unveiled a futuristic initiative to deliver packages via drones: From Amazon's fulfillment centers to your front door in 30 minutes. Markey wants federal regulations in place before any package-delivery drones take to the skies. Bezos is aware of the regulatory hurdles but says "It will work, and it will happen, and it's [going to] be a lot of fun." As a devoted Amazon Prime customer, I'll bet Bezos can deliver on the drones, or the equivalent thereof.
Gross says don't fight central banks, but be afraid
Pimco's Bill Gross is out with his December investment outlook, in which he defends active management -- Pimco is a $2 trillion active manager -- and issues a few warnings. "Investors are all playing the same dangerous game that depends on a near perpetual policy of cheap financing and artificially low interest rates in a desperate gamble to promote growth," Gross writes. "If monetary and fiscal policies cannot produce the real growth that markets are priced for (and they have not), then investors at the margin -- astute active investors like Pimco, Bridgewater and GMO -- will begin to prefer the comforts of a less risk-oriented migration." The Fed's asset purchase program is premised on that migration. So if Gross is right -- about the lack of growth and migration out of risk assets -- the Fed is going to have to come up with Plan B. Or is it Plan C? Or D?
What does it really cost ?
Today's infographic from CNN lets you travel across the U.S., put your cursor on any of the 50 states and District of Columbia, and learn what a mid-range plan on the healthcare exchange will cost without a subsidy. Guess which state is most expensive at $413 a month? See for yourself. I'm not going to give it away.
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