By Victor Zhao Published March 13, 2015
Walmart, a company notorious for its ruthless commitment to cutting costs, has recently voluntarily decided to raise the minimum wage for its employees to $10/hour. The move is part of a growing national sentiment and campaign to increase the official minimum wage set by federal law of $7.25/hour.
By Victor Zhao Published October 24, 2014
If the study of economics is about maximizing utility from scarce resources, then parking defies every rule in the economics toolkit. A tremendous amount of land and money is spent building spaces for parked cars on the road and in lots; yet, lack of parking is a perennial complaint for many, particularly those in urban or even suburban areas. The problem is not the lack of parking spots but rather their cost - free. The solution to the parking problem is to view it from an economic perspective and allow the fundamental facilitator of economic activity - prices - to produce a market clearing outcome.
By Victor Zhao Published April 24, 2014
Net neutrality is an issue of economic fairness. Only by preserving open, equal access for all its users can the Internet's democratic potential be fully realized. Despite the federal court decision striking down its proposed rules, the FCC must continue to advocate for, and work towards, the goal of keeping the Internet open for all.
By Victor Zhao Published April 5, 2014
Basic microeconomic models of supply and demand hold that price floors are fundamentally distorting to efficient markets. Artificially raising the price of a good above the market-clearing, equilibrium price creates an excess of supply to demand and deadweight loss to the overall economy. Applying this logic to the labor market would seem to indicate that a high minimum wage is a recipe for unemployment, as it would lead to greater supply (workers willing to work) than demand (open positions companies are looking to fill). This analysis, however, fails because the labor market is fundamentally different. The inefficiencies and friction of the labor market, as well as the societal benefits of higher wages, makes raising the minimum wage a sound economic policy.
By Victor Zhao Published May 1, 2013
By now, we are more than familiar with proclamations of wasteful government spending; Republicans have been on the drumbeat about the size of the federal budget deficit for seemingly forever (actually, since Barack Obama replaced the last Republican president in the White House). But it isn't just the Republicans who are guilty of this; Democrats, too, including President Obama, have made a premature pivot to deficit reduction, by proposing cuts in a number of social programs funded by the federal government.