As a school kid growing up in Killingworth, a rural town on the Connecticut seacoast, Brian Phelan remembers excelling at math. “But I didn’t know then how I could use it as an adult,” he says.
That changed when he entered nearby Wesleyan University. “I was hooked by economics from my first course as a freshman in college,” he recalls. “I immediately loved—and continue to love— the way economics imposes a simple structure on behavior, based on common individual and firm objectives, that provides deep insights into real-world outcomes.”
Phelan went on to major in economics at Wesleyan, and then earn master’s and PhD degrees in this subject from Tufts and John Hopkins universities, respectively.
Since 2012, Phelan has been sharing his passion for economics with students at DePaul University, where he is an assistant professor at the Driehaus College of Business. This past fall, Phelan was honored with the university’s Excellence in Teaching Award for the high quality of his classroom instruction. His accomplishments also extend to his scholarship. He has co-written a forthcoming study for the Economic Journal that looks at a timely issue—the impact of minimum wage hikes.
Phelan talks more about his teaching and research at DePaul:
What was your first job?
My first job after college was at an economic consulting firm where I worked with a group of PhD economists who were hired by firms to investigate the competitive implications of mergers. While I was not particularly interested in industrial organization as a field of economics, I was incredibly impressed by my bosses, including their grasp of economics and the ways they used statistical analyses to support their arguments. That experience and the example of these mentors opened my eyes to the fact that economics has a life outside of the classroom that is highly valued by businesses and governments.
What do you teach, and what is your teaching philosophy?
I currently teach three courses: Principles of Microeconomics (ECO 105), Introductory Econometrics (ECO 375), and graduate Labor Economics (ECO 518). I love this mix of classes because the topics align with my research interests and they allow me to interact with economics students at all levels—from first-time economics students to more advanced economics majors and graduate students.
My teaching philosophy emphasizes the importance of intuition, real-world applications of economic ideas, honest discussions about the limitations of economic theory and hands-on practice with actual data. While this philosophy manifests itself differently across the different classes I teach, I have found that these methods best achieve my three goals as a teacher: developing a strong theoretical foundation in my students, challenging students to see the relevance of economic ideas in a broad range of applications, and engaging students to think critically and become active participants in the discipline.
What do you like best about teaching at DePaul?
The students at DePaul are great. They are curious, hard-working, unpretentious and motivated. The top students at DePaul are as gifted and smart as the top students at any college in the country. One quality that particularly impresses me about many of my students is the determination with which they pursue their educational goals–often while also balancing part-time jobs, internships and family obligations.
You recently completed research with Federal Reserve Economist Daniel Aaronson on whether employers are likely to replace workers with technology if the minimum wage goes up. What did you find?
State and local governments are increasingly turning to the minimum wage as a way to improve the standard of living for the working poor. Despite popular support for this legislation, it is important to understand the extent to which changes in the minimum wage may alter the hiring practices of firms, since maintaining employment is essential if the policy is going to have its desired effect.
In my paper with Dan Aaronson, we examine whether minimum wage hikes, which change the relative prices of capital and labor, cause employers to replace workers with automation technology, such as replacing cashiers with kiosk-based ordering systems. We find that minimum wage hikes in the early 2000s did cause employment declines in routinized occupations susceptible to automation. Somewhat surprising to us, however, was that states that increased their minimum wages tended to experience employment growth in other types of low-wage employment that largely offset the losses in routinized employment during the first two years after the minimum wage hike. For example, a grocery chain may cut cashier jobs after introducing self-checkout kiosks, but create new customer service positions to help shoppers navigate the system.
Thus, while our results suggest that minimum wages are expediting the automation of low-wage jobs, we find that the costs of this automation on individual low-wage workers do not appear to be particularly large in the short run due to the concurrent employment growth in other types of low-wage employment.
What else are you currently researching?
I am still very much interested in this question of whether minimum wages expedite the automation of low-wage jobs. While my paper with Dan Aaronson is suggestive that this is taking place, I would like to analyze more-direct evidence of technological adoption following minimum wage changes. Unfortunately, there is no publicly available data on technological adoption in the low-skill service sector, where most minimum wage workers are employed. Therefore, I am in the process of collecting data about the use of automation technologies from Yelp restaurant reviews. Since restaurant reviews on Yelp are location specific and the reviews are dated, this data should allow me to analyze the timing and location of automation adoption in the restaurant sector and its relationship to the minimum wage.