As the federal government shutdown drags on, and more than a million American workers miss their paychecks, there is sure to be negative ripple effects across the economy. But measuring those effects will be harder for researchers, as one of the victims of the shutdown is the federal agency that collects detailed employment data. Julia Wolfe of the Economic Policy Institute explains:
The Current Population Survey (aka the Household Survey), which is used to measure the nation’s unemployment rate (along with many other measures of labor market health), is collected and analyzed through a partnership between the Bureau of Labor Statistics (BLS) and the Census Bureau. Every month, a few weeks after BLS releases the monthly jobs report with CPS-derived estimates of unemployment and labor force participation, Census releases a version of the CPS microdata for public use. These public-use extracts allow for analysis beyond what’s available in tables published by BLS. For example, the jobs report includes an enormous amount of information on employment status by race/ethnicity, gender, age, education, and a variety of other demographic characteristics. However, to look at how the employment status of young people with a high school degree differs by race, you need to use the CPS microdata to run your own analysis. The CPS microdata is also a key source for assessing trends in wage growth for workers at different points in the wage distribution—an assessment we make annually at EPI and which will be delayed by this weeks’ announcement.
Revenue stalemate continues
House Speaker Taylor Barras continued on Thursday to ignore the advice of three state economists who say the state’s revenue projections have improved since last spring. The Revenue Estimating Conference, a four-member panel that determines how much the state can spend each year, requires a unanimous vote to update its official forecast. Barras’ refusal to act means Gov. John Bel Edwards will have to build his executive budget proposal on an outdated revenue forecast. It also means $43 million in spending planned for the current year remains on hold. The AP’s Melinda Deslatte has more:
The stalemate has political implications this election year, threatening Edwards’ plans to include a teacher pay raise in his budget proposal to be released next month. Already, Barras’ blocking of the forecast increase stalled a $43 million list of spending plans, mainly on corrections, juvenile justice and local sheriffs. Economists for both the Legislature and the administration said tax collections are coming in better than expected, and they’ve described their proposed changes as cautious. They recommended the Revenue Estimating Conference bump up the forecast for the budget year that ends June 30 by more than $125 million and the next budget year by at least $67 million.
ExxonMobil denied tax exemption
After a marathon meeting, the East Baton Rouge School Board voted to reject two property tax breaks sought by ExxonMobil for projects in the capital city that had already been completed. The school board meeting, which lasted seven hours, brought out a large crowd of teachers, nonprofit organizations and community activists, all who expressed the dire need for more K-12 education funding in East Baton Rouge Parish. Charles Lussier of The Advocate has more:
The company was seeking exemptions from school property taxes worth about $2.9 million over 10 years. The work in question was completed in 2017, and ExxonMobil had a difficult time explaining while it still need a tax break for them. … Thursday night was the third time the School Board has been asked to weigh in on an ITEP tax break request since Gov. John Bel Edwards in June 2016 ordered that local government have a say in the state’s decades-old program. And it’s the first time the board has said No.
Little research exists on preemption
Louisiana is one of five states without a minimum wage, adhering to the federal level of $7.25 an hour that has not been raised in a decade. Louisiana also preempts local municipalities from establishing their own minimum wage. The Urban Institute’s John Marotta and Solomon Greene discuss the reasons behind preemption:
Twenty-five states have passed laws that preempt localities from setting their own local minimum wage (von Wilpert 2017). Consequently, minimum-wage ordinances have been overturned in at least 10 localities. Of the 25 states that have passed a minimum-wage preemption law, 14 adopted their minimum wage preemption law in or after 2013. The primary justifications for minimum-wage preemption laws are (1) concerns about having a patchwork of wage levels across the state and (2) claims that a higher local minimum wage puts the city or county at a competitive disadvantage relative to surrounding areas.
These beliefs on the effects of preemption are wide-held, but Marotta and Greene believe they have yet to be rooted in actual research.
As mentioned, a frequent argument in favor of state preemption of local minimum wages is that a“patchwork” of wage levels across the state creates undue complexity for businesses and therefore renders the state a less attractive economic environment. But research on this theory is scarce, and further research can help us develop a more robust understanding of the potential impacts that varying minimum wage levels across a state have on business location or expansion decisions.
Note: The Daily Dime will not publish on Monday in observance of the Martin Luther King Jr. holiday.
Number of the day
$6.09 – What the federal minimum wage purchasing power has eroded to since it was last raised in 2009 (Source: Bureau of Labor Statistics)