This Week in Economics: 3 Stories You Should Know About

This week we had some interesting economic developments in both monetary policy and regulatory policy. Here is a look at the top stories you should pay attention to: 1) House Democrats vote to raise minimum wage to $15 per hour. Yesterday House Democrats voted almost unanimously in favor of raising the federal minimum wage to $15 an hour. Only six House Democrats voted “no” while only three House Republicans voted “yes.” You can see those who bucked the party leadership here. Putting aside the fact that the Congressional Budget Office estimates this legislation would destroy 1.3 to 3.7 million jobs,

D.C. Voters Upend Tip System, Raise Minimum Wage for Tipped Staff

On Tuesday night, District of Columbia voters approved Initiative 77, a referendum to raise the minimum wage for waiters and other tipped workers from $3.33 an hour plus tips, to $12.50 an hour plus tips. Most places in the U.S. have a different minimum wage for tipped workers that is much lower than the regular minimum wage, based on the assumption that tips will bring the workers up to and even far above the regular minimum wage. As Jonathan Decker has written here, this system has often worked to the benefit of both the workers and employers. However, Initiative 77 would

Why New York’s Proposal to Abolish Tipping Is a Terrible Idea

Recently, I had the pleasure of visiting Europe for the first time. It was a fantastic trip, and there were many things I loved about the continent, including its architecture, churches, mountains, food, and wine. My Instagram was totally lit. But amidst all these items that make Europe such an awesome place to visit, there was one thing that was most definitely not so great: the service in restaurants. As you may know, Europeans do not tip the way that we do in the United States. While a customer may round up a check to the next dollar, tipping pretty

New Study: Raising Minimum Wage Harms Low-Income Workers

A paper released yesterday by a group of researchers at the University of Washington reveals that, as conservatives and economists have predicted, drastic minimum wage hikes may indeed harm the very people that they were put in place to help. The study, which was published by The National Bureau of Economic Research, analyzed the impact of Seattle’s recent minimum wage increase: This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 per hour

Santorum Says Stagnant Wages the Problem

Breaking from libertarian orthodoxy, Sen. Rick Santorum endorsed a modest raise to $8.75 in the minimum wage over three years to show voters Republicans care about stagnant wages. “I’m not for what Barack Obama wants to do,” he told the Missouri Republican Party’s Lincoln Days gathering, (raise the minimum wage to $10.10 an hour). “But, the idea that the Republican Party, at a time when median wages are stagnant, is opposing the minimum wage is stupid politics. . .Sometimes when someone is hurting, they want to know that one thing more than anything else. People don’t think we care.” I