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  1. Economist Podcasts
  2. Wage against the machine: the distortions of minimum pay
Wage against the machine: the distortions of minimum pay

Wage against the machine: the distortions of minimum pay

Economist Podcasts · Nov 25, 2025

This episode explores the hidden costs of minimum wage, how AI is devaluing cover letters, and Florida's radical homeschooling experiment.

High Minimum Wages Degrade Job Quality and Safety, Not Employment Levels

Contrary to classic economic theory, raising the minimum wage doesn't significantly increase unemployment. Instead, its hidden costs manifest as lower-quality work, such as unpredictable schedules and reduced workplace safety, as employers push workers harder to compensate for higher labor costs.

Wage against the machine: the distortions of minimum pay thumbnail

Wage against the machine: the distortions of minimum pay

Economist Podcasts·3 months ago

Florida's Radical Homeschooling Experiment Lacks Data to Measure Student Outcomes

Despite the rapid shift to a decentralized, market-based education system, Florida lacks basic accountability measures. The state has no subject requirements for homeschoolers, and while students take standardized tests, the results are not published. This means policymakers and parents have no reliable data to determine if this experimental approach is helping or harming children's education.

Wage against the machine: the distortions of minimum pay thumbnail

Wage against the machine: the distortions of minimum pay

Economist Podcasts·3 months ago

Minimum Wage Hikes Are an Ineffective Anti-Poverty Tool Compared to a Strong Welfare State

Raising the minimum wage often benefits individuals in higher-income households (e.g., teens with summer jobs) rather than the poorest families. The most vulnerable are often not in work. A more generous welfare state that directly provides money to poor households is a more targeted and effective way to reduce poverty and inequality.

Wage against the machine: the distortions of minimum pay thumbnail

Wage against the machine: the distortions of minimum pay

Economist Podcasts·3 months ago

AI-Generated Cover Letters Create a 'Market for Lemons' That Lowers Wages for Top Candidates

AI tools enable all candidates to produce polished cover letters, destroying their value as a signal of effort and quality. When employers can't differentiate between good and mediocre applicants, they become unwilling to pay a premium for top talent. This paradoxically lowers wages for the best candidates and erodes overall market efficiency.

Wage against the machine: the distortions of minimum pay thumbnail

Wage against the machine: the distortions of minimum pay

Economist Podcasts·3 months ago

Employers Are Replacing Cover Letters With Un-Fakeable Skills Tests and AI-Assisted Interviews

As AI renders cover letters useless for signaling candidate quality, employers are shifting their screening processes. They now rely more on assessments that are harder to cheat on, such as take-home coding challenges and automated AI interviews. This moves the evaluation from subjective text analysis to more objective, skill-based demonstrations early in the hiring funnel.

Wage against the machine: the distortions of minimum pay thumbnail

Wage against the machine: the distortions of minimum pay

Economist Podcasts·3 months ago

Florida's Homeschooling Model Is an 'À La Carte' Marketplace, Not Traditional At-Home Learning

Fueled by an $8,000 per-child voucher, Florida's homeschooling trend is not about kitchen-table learning. Parents act as 'general contractors,' curating education by choosing from a diverse ecosystem of micro-schools, co-ops, and even a la carte classes from public schools. This creates a highly fragmented and customized educational experience.

Wage against the machine: the distortions of minimum pay thumbnail

Wage against the machine: the distortions of minimum pay

Economist Podcasts·3 months ago