The Atlantic, who should really know better, profiles a program called Platform to Employment. The subtitle of the article says that it is "successful" but in fact the article does not even attempt to provide plausible evidence of causal effects on labor market outcomes, presumably because there is no such evidence, even though some states are now providing the program at, in Connecticut, about $7,000 per participant.
What the article does provide is the information that there is an 80 percent placement rate. That sounds good, especially if you miss the one mention of the fact that the program serves "a selected group" of the long-term unemployed. Presumably, they are selected for employer appeal, which makes the placement rate even more meaningless as a measure of program success than it otherwise would be.
In addition to the lack of any causal evidence on the program's effectiveness, the Atlantic writer also seems woefully ignorant of the policy environment in which the program operates. The services provided by the program are not that different from what the Workforce Investment Act (WIA, soon to have the exciting new acronym WIOA) provides to someone who receives "intensive" job search assistance followed by subsidized on-the-job training. (OJT). WIA's caseworkers perform the same sort of selection when recommending clients to employers for subsidized OJT as PtE's caseworkers do. More broadly, the community college system offers vocational training for free (yes, already, someone please tell our beloved leader) via Pell Grants and/or WIA to those with low incomes and at a highly subsidized price to those without low incomes.
Some of these difficulties appear to arise because the author relies solely on the program itself, program participants, and advocacy organizations as sources. The Atlantic can, and should, do better.
This may be the best ethnography I have ever read, and I have read a bunch of them starting when I was in college. It studies the home front of mass incarceration via the lives of young men in a poor African-American neighborhood in Philadelphia.
Why do I like it so much? First, it is brutally honest. There is no sugar coating here and no romanticizing of the poor or of the police or of social workers or of academics. Second, there are no overt politics (not even the heretofore seemingly obligatory bad policy chapter at the end). There are lots of clear policy messages in the book, but they are all implicit in the descriptions of institutions and events. Third, the material does not require obtuse theoretical structures for its value. Goffman recognizes that and just lets the agents and events speak. As a result, she avoids the situation in some ethnographies, such as Drylongso by John Langston Gwaltny, where the observed seemed to be saying one thing and the observer quite another. Fourth, the author really seems to just want to understand how the individuals she studies see themselves and their actions. That, to me, is both what good history and good ethnography should do: allow you to see how other people see themselves and make sense of their world. Fifth, and finally, the book also functions as a sort of academic coming of age story of the author, one that I found quite moving and memorable. Oh, and be sure to read the methodological note at the end. It contains some of the best material in the book.
There is no question that it is tough to find econometric evidence of capital-labor substitution in response to minimum wages. Some interpret that to mean that it does not occur, others that it occurs with long and variable lags that make it tough for our usual design-based strategies to sort out. I tend to favor the latter, based in part on my experience of going to China, where labor is very inexpensive and where, as a result, you are often out-numbered by the staff when you go to a store. Sometimes having more variation in the independent variable helps to clarify the sign and magnitude of the coefficient.
And, really, what we should be having a policy discussion about is not the minimum wage but about how to reduce the number of workers whose marginal product is of such a low value that the minimum wage can easily exceed it.