Professor at UC Berkeley. Labor economics.
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Two perspectives on manufacturing in the US that show a different trend post-2022: payroll employment (left) and real value added (right).
With productivity growth, we should not expect manufacturing employment to track overall productive activity.
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Gas prices in CA are persistently high. Did Jones Act waiver that increased fuel shipments to CA reduce this gas premium? Here's the raw data.
"One bright spot for California: imports from Texas. The amount of fuel flowing from the Gulf Coast to the West Coast surged nearly sevenfold from February to May. The increase happened after the Trump administration issued a 60-day waiver of the Jones Act..."
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Near-full price pass-through of minimum wages.
I changed my mind on minimum wage after reviewing the data. I used to believe in letting the free market handle it, like most of you.
However, when California raised the minimum wage for fast-food workers, it increased prices for consumers by pennies (~1-2%).
There was zero downside... it didn't drive massive automation, nor did it cause businesses to shutter.
Exactly the same result as Australia and other American cities... no changes in jobs; restaurants didn't close.
We are at record profits for corporations.
We are at a record low in unemployment in America over the past five years.
We are at maximum social unrest due to wealth disparity.
We should WANT to see the lowest-earning Americans go from $12 to $15, to $20, and then to $25 an hour over the next decade.
This isn't virtue signaling; this is good business!
Why?
Individuals earning under $40,000 a year spend 100% of their income.
They save nothing... they just spend it at the same companies they earn it at (Amazon, McDonald's, the Apple Store, DoorDash, Uber, etc).
It increases monetary velocity.
Take the time to research all of this, and you'll find the only downside is for teenage workers, who aren't worth $15-20 an hour. It does depress those jobs, so we should keep teenagers at a lower rate.
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Health care spending inequality has been rising since 2018.
Regression-adjust Per Capita Total Health Care Spending from Cliff and Meille (2026)
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The U.S. federal deficit is at 6% of GDP and trending up.
The deficit has never been this high during an economic expansion. If not addressed we face a bleak future of high interest rates, high inflation and low growth.
This is a crisis that few are taking seriously.
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Very excited to be in Berlin to present on my Handbook Chapter on non-wage amenities in the RFB Masterclass as well as my new paper "The Labor Market as an Equilibrium Newsvendor Problem".
What a lovely city, and the first thing I was walking out of arrivals was a family with a "Welcome Home Freddy" sign. Probably a coincidence, but could it be?
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More people want to migrate to the U.S. than any other country.
The promise of opportunity and freedom is powerful.
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Changes in Social Security are coming one way or the other in the next 6-8 years.
By proposing the elimination of the payroll tax cap, the just released Moreno-Warren proposal puts the entire burden of restoring solvency on workers, and not current retirees.
However, if Congress does not act, benefits will be cut, and the burden falls entirely on current retirees.
The burden can be partially shared by increasing (not eliminating) the tax cap and increasing the amount of benefits subject to income taxation, as long as the beneficiary's income is sufficiently high. Like in the provision below that was scored by the Social Security actuary.
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My paper "The Impact of Unions on the Wage Distribution: Evidence from Higher Education" with Michael Baker, Yosh Halberstam, @KoryKroft, and Derek Messacar is now in print at AER: Insights.
The June 2026 issue of AER: Insights (8, 2) is now available. aeaweb.org/issues/848
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My chapter on non-wage amenities is now published in the Handbook of Labor Economics, Volume 6.
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Employment probabilities after an initial felony conviction.
Sealing criminal records from employer background checks has a limited impact on employment rates and earnings, from @amandayagan, @andy_garin, @dkoust, @AMLabEcon, and Crystal Yang nber.org/papers/w32394
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We stumbled upon a spawning endangered coho salmon while exploring a creek (~30 miles from ocean). It was fast but I managed to film it. Later we learned that they hadn’t been seen here in 20 years.
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Employment in nursing and residential care facilities. I believe this accounts for most of the drop in employment in health care services since Covid.
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My 7 year old led me up the face of a cliff during a causal walk. We made it to the top, and lessons were learned along the way.
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I'm having fun looking at Zillow owned transactions. Here's one where they purchased a home on 10/18 for $464k and listed it on 10/29 for $454k. As the old joke goes, we lose money on every sale, but we make it up on volume.
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This figure is quite something.
Ports are moving more containers in and out than in any year since 2000. whitehouse.gov/cea/blog/2021…
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I'd like to hear more from @LHSummers on his thinking behind this.
time.com/6053319/larry-summe…
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Three candidates for this shortfall in manufacturing.
1. Demand isn't fully back.
2. Labor supply (UI, hesitancy)
3. Adjustment costs
Prob all of the above. You have reports like below that point to 3+supply chain problems. Can't rule out 1. UI is relevant and other LS shift.
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Logging is tiny, but interesting case. Employment collapsed why? Reports were crashed global pulp and paper markets and housing starts. Lumber prices are now high, housing starts are back, don't know about p+p but employment hasn't recovered. Plausible story is adjustment costs.
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It is not crazy to have the view that if LFP is lower because people optimize (even due to fear), then there is a limited policy role. The economy can compensate with higher productivity. In fact, productivity has substantially jumped (through Q1 2021).
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Apropos of nothing, this is my favorite graph from a paper I co-wrote that never made it to the published version. Vertical lines are points where maximum benefit levels were reached in the UI schedule in MO in 2005 and 2008.
drive.google.com/file/d/1BO5…
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Did any Princeton grads out there live in the Butler units? This is where they used to be. There are many deer, roving packs of human kids on bikes, occasional fox, coyote.
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My Twitter account has been gestating for 17 years. Perhaps its demise will be as quick as this fella’s.
#econtwitter #cicadatwitter
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