The Swedish Academy awards the highest award in Economics to this 65-year-old Canadian with a doctorate from Princeton and who teaches at Berkeley, an expert in basic labor market issues.
A few days ago, the Spaniard Jorge Carrión wrote in The Washington Post that, and he said it in reference to the Literature Prize, awarded this year to another writer who writes in English and is a British resident despite his Tanzanian origin. “The criteria with which contributions to universal culture are evaluated and rewarded were born in colonialist Europe, were adopted by the academic institutions of the United States and perpetuate the logic of other times,” mused Carrión, a doctor of Humanities from the Pompeu Fabra University in Barcelona.
This reflection does not detract from the winners; Rather, it aims to broaden our vision of a multipolar world, as it is now called, in which there is life beyond Old Europe and the USA. That said, this year’s Nobel Prize in Economics celebrates three men of Anglo-Saxon culture and educated in American universities: David Card, Joshua Angrist and Guido Imbens.
Although the trajectory of the three would give for several articles, the journey of David Card (Guelph, Canada, 1956) is striking, who has delved into basic issues of the labor market, such as the negotiation of the unions, inequality, the minimum wage , unemployment benefits and welfare programs: everyday issues that are very present in societies such as Spain.
One of his best-known investigations is the one entitled (Does the minimum wage reduce employment? California case study, 1987-89). Card starts from a specific event: in July 1988, the minimum wage in California rose from $3.35 to $4.25. The author of this academic article adds two facts: during the previous year (1987), 11% of the state’s working population and 50% of California teenagers had earned less than the new state minimum wage.
“The general opinion is that the imposition of a compulsory wage floor will reduce the employment of the youngest and the least qualified”, Card began his dissertation, published in the Industrial and Labor Relations Review, in 1992. However, in the conclusion he said this: “I find no empirical support for the conventional prediction economists make about the effect of minimum wages on employment.”
The expert added: “Although the increase in the minimum wage in California raised the income of the workers with the lowest salaries, it does not appear to have significantly reduced employment, even in the retail industry.”
Mathematical Philosophers vs Labor Economists
David Card received his bachelor of arts from Queen University in Kingston, Ontario, in 1978; and earned a Ph. fascinated, but what he was reading had implications that extended to agriculture, which, as the son of farmers, was a matter of particular importance to him”, reported in 2015 from the BBVA Foundation, which awarded Card with the award Frontiers of Knowledge.
The new Nobel laureate has spent most of his professional career as a professor of economics at the University of California, Berkeley; He has been co-editor of the Journal of Labor Economics and Econometrica, and has received awards such as the Frisch Medal, in 2007.
“Economics as a whole is really a combination of two kinds of people: those who are very practically oriented and those who are more of a mathematical philosopher. The mathematical philosophers get most of the attention. They deal with the big questions.” no answer. Labor economists try to be more scientific: they look for very specific predictions and try to test them as carefully as possible. Mathematical philosophers are very frustrated by labor economists. They come up with a broad general theory, and we tell them that doesn’t fit the evidence,” Card said in 2006 on the Minneapolis Federal Reserve website.
Another of his experiments includes a study of how a sharp increase in emigration from Cuba to Miami affected wages and employment after Fidel Castro’s decision in 1980 to allow his compatriots to leave Cuba. According to The Guardian, in four months, 125,000 Cubans arrived in Miami, increasing the size of the working population by 7%, but the comparison with four other US cities “did not find detrimental effects on jobs or wages of underpaid workers.
Card says he hasn’t touched the minimum wage investigation since the 1990s, even losing friends for publishing his findings. In his defense, he insists that he stays away from politics and emphasizes that he never advocated raising the minimum wage: he only said that raising it in small doses would not have much impact on employment.
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