This is sort of a low-priority topic but it’s a funny video.
Archive for the ‘Free markets’ Category
Trade, automation, and employment
December 17, 2016This is sort of a rambling post about items I’ve come across recently that are loosely related.
ReasonTV released this clip this week.
This pretty much confirms what I’ve read about NAFTA. And that’s one reason I’ve never been happy about Trump’s bashing free trade agreements, NAFTA in particular.
Trade’s not a case of one-side-wins-while-the-other-side-loses. Trade works to mutual advantage: that’s why people engage in it, after all.
The only point I can take from Trump’s comments is that the U.S. is big enough to gain concessions by threatening to stop trading so freely. (He may be correct about that but I think it would be a bad idea.)
Being a free trade kind of guy, I was more than a little surprised to read about Stephen Moore’s turn to "the Dark Side."
If you know anything about Moore’s background, his new position is a fundamental shift for him. (For example, the Wikipedia article about him says, "Moore is known for advocating free-market policies…")
But read this whole thing to find out why Moore now backs Trump’s approach to trade and the economy.
I stirred up some controversy last week when I told a conference of several dozen House Republicans that the GOP is now officially a Trump working-class party. For better or worse, I said at the gathering inside the Capitol dome, the baton has now officially been passed from the Reagan era to the new Trump era. The members didn’t quite faint over my apostasy, but the shock was palpable.
I emphasized that Republicans must prioritize delivering jobs and economic development to the regions of the country in the industrial Midwest — states such as Michigan, Pennsylvania, Ohio, Indiana, Wisconsin, Iowa, and Missouri. These are places that, for the most part, never felt the meager Obama recovery and where blue-collar Reagan Democrats took a leap of faith this election and came back to the Republican party for the first time since 1984. The GOP will be judged in 2018 and in 2020 on whether they deliver results for this part of the country and for the forgotten middle-class men and women (“the deplorables”) whom Democrats abandoned economically and culturally. This is all simply a political truism.
What roused the ire of some of my conservative friends was my statement that “just as Reagan converted the GOP into a conservative party, with his victory this year, Trump has converted the GOP into a populist, America First party.”
One friend lamented that I must have been drunk when I said this.
No. I meant exactly what I said, but I will clarify. […]
And here’s an interesting TED Talk by David Autor, professor of Economics and Associate Head of the MIT Department of Economics. It was published at the end of last month.
Prof. Autor has some explanations for the fact that the more we automate, the more people we have working. There are more jobs, not fewer.
Near the end of the clip, he makes a good point about the influence of culture on the employment picture.
Update 12/19/16:
I ran across an interesting post at pseudoerasmus that goes into detail on Prof. Autor’s topic. Despite its mocking tone and focus on conspicuous consumption, I think it’s a pretty fair explanation of how employment can increase despite increasing automation. (It doesn’t have a lot to say about people working in fields that weren’t even possible before automation enabled them, unfortunately.)
The emptiness of life will save us from mass unemployment
I don’t I have much to add to the debate about the dystopian robot future scenario envisioned by many people. But I do think the nightmare scenario is less mass unemployment than a kind of revamped neo-mediaevalism. I’m not predicting that, so much as saying that’s the worst-case scenario. {Edit 28/12/2016: This was written more than 2 years ago as a half-joke to mock trends in luxury consumption more than anything else.}
In the past 250 years, technological progress has not caused unemployment because human wants have been infinite. Every time productivity (output per unit of input) rises, the implied extra income in the economy still gets spent on something (at least when there isn’t a recession), and extra work gets created to produce that something. In other words, fewer inputs may be used to make one unit of output, but more output always gets desired / created. (OK, that sounds Say’s Law-ish, but please be patient.)
Environmentalists understand keenly that when energy prices fall, people frequently just drive more or fly more, or the savings get spent, ultimately, on something else that uses energy. Productivity growth produces the same effect. Which is why, as of now, we’ve never had permanent mass unemployment from technological displacement.
After the basic needs of food and shelter are satisfied, people go in search of other fulfillments — more caloric, varied, and exotic diets; more living space to fill with ever more stuff; 58 changes of clothes instead of 2 per year; more leisure in the form of vacations and entertainment; and ever more marginal extensions of life expectancy. That’s all very obvious.
But as people get wealthier, they demand not only more quantity of stuff, but also ever more trivial and even imaginary increments to the quality of goods and services. How else to explain the market for, say, honey in a jar that’s ‘raw’, unfiltered, unpasteurised, ‘fair-trade’, non-GMO, single-country-origin, single-bee-colony, and single-flower-species? […]
Finally, I learned yesterday that the Cato Institute has a session scheduled next month with the author of Men Without Work: America’s Invisible Crisis. From the descriptive blurb at Amazon:
Today, nearly one in six prime working age men has no paid work at all—and nearly one in eight is out of the labor force entirely, neither working nor even looking for work. This new normal of “men without work,” argues Eberstadt, is “America’s invisible crisis.”
I have to wonder if all these people are really unemployed or whether some of them are simply working off the books in the underground economy.
Crony-in-chief?
December 4, 2016Peter Suderman writes an interesting column at Hit & Run about Trump, politics, and free markets.
The president-elect was a crony capitalist businessman. Now he’s set to become a crony capitalist politician.
As a real estate developer, Donald Trump made and sought special deals designed to use the power of government to improve his personal bottom line.
The first building project he ever developed, the Grand Hyatt hotel in Manhattan, was completed using a multi-decade tax abatement obtained using his father’s connections. This was not a broad-based tax cut so much as a state-granted subsidy that granted Trump’s project the financial wherewithal to proceed. In 1994, Trump proposed that the city of Bridgeport, Connecticut, become a partner with him on a $350 million theme park project, allowing him to get access to land by declaring a number of businesses as condemned properties. Over the course of his career as a developer, he repeatedly pressured the government to use eminent domain to clear private property owners out of the way, including one instance in 1994 in which he requested that the government kick an Atlantic City widow out of her home in order to replace it with a limousine parking lot. While campaigning for president, he aggressively defended the use of eminent domain, calling it a “wonderful thing,” and describing it as necessary for construction projects that create jobs.
For Trump, this is not merely a business strategy. It amounts to a working theory of how government and the private sector should interact. And it is one that should worry anyone concerned about maintaining a fair and proper division between the state and the private sector. […]
He doesn’t believe that the government’s role is to set clear ground rules and let market competition work things out. […]
Remember all the well-deserved grief Obama took for Solyndra and Fisker?
Meet the new boss, same as the old boss…
.@mike_pence: Donald Trump will make decision to intervene with companies talking of moving jobs overseas "on a day-by-day basis." #thisweek pic.twitter.com/sbxqI00VO9
— This Week (@ThisWeekABC) December 4, 2016
How a market works
December 2, 2016This is an interesting story that I read on Dan Lewis’s Now I Know list. (Now I Know is worth a look, if you’re not already a subscriber.)
To set the scene: Herbert Dow, founder of Dow Chemical, came up with a new way to refine bromine in 1891. That was the good news; the bad news was that he got into a trade war with an international cartel when he tried to sell his bromine outside the U.S.
Here’s the bulk of Dan’s article, called The Bromine Gambit:
Before Dow came onto the bromine scene, a German government-backed cartel named the Bromkonvention had a monopoly on bromine. As Investopedia explains, the Bromkonvention “sold bromine at a fixed price of 49 cents per pound, but it would implement a predatory pricing strategy quickly, if challenged.” And Dow Chemical posed such a challenge.
Dow Chemical operated independently of the Bromkonvention, which didn’t make the Germans all that happy, but they were willing to coexist so long as Dow kept its bromine sales within the United States. And considering that Dow was selling bromine at 27 cents per pound — about 45% less than what the Bromkonvention priced it at in Europe — the Germans saw Dow as a real threat. So the Bromkonvention made a threat of their own: if Dow entered markets outside the United States, the Bromkonvention promised to use its huge supplies of bromine to force Dow out of business by selling it cheaply — below cost — in the States.
Dow called their bluff, selling bromine to England. And the Bromkonvention retaliated. The cartel began dumping bromine in America, offering it for sale at 15 cents per pound. Dow couldn’t compete, and it didn’t have any other products to make up for the shortfall. This put Dow’s business in jeopardy — in theory at least.
In practice? Something went wrong, at least from the perspective of the Bromkonvention. American demand for bromine went up, as expected, but by leaps and bounds — no matter how much bromine Bromkonvention sold there, it would sell out, and Dow was still able to find customers at its 27 cents/pound price point. Not only did Dow not go out of business, but it expanded. Dow began selling its bromine — still at 27 cents per pound — in Germany itself.
How was this possible? Instead of dropping its price to meet that set by the Bromkonvention, Dow became buyers, as Investors Business Daily (via the Indianapolis Recorder) explains: “[Herbert Henry Dow] had an agent secretly buy up hundreds of thousands of pounds of the cut-rate imported bromine.” And what do you do with that bromine? IBD continues: Dow would then “repackage [the cheap bromine] and export it back to Europe.”
The Bromkonvention, at first, wasn’t sure where the cheap European bromine was coming from; in that interim period, they also continued their price war against Dow and continued to lower the price in the U.S. (ultimately to 10 cents/pound). In the end, there wasn’t a price low enough to force Dow out of business, as Dow was well-enough capitalized to buy up the dumped bromine and arbitrage its way to success. (And besides, the Bromkonvention made it easier and easier by lowering the price.) A century plus later, Dow is still around; the Bromkonvention is long gone.
Dan writes that Dow Chemical had the capital reserves to buy up the "dumped" bromine. But I’ll guess that in this case it wouldn’t have been to hard to find speculators – or banks – willing to loan the money to buy the under-priced bromine.
What’s it worth to you?
September 19, 2016Mark Perry at Carpe Diem has a good post about what I’ll call the Information Economy (for lack of a better term). He starts out writing about the different ways music has been delivered for sale and then moves on to the more general point of how information of all kinds gets delivered now.
I particularly liked the "What’s the internet worth to you?" question.
[t]he limitations of GDP accounting
Thanks to the advances in computer technologies, the Internet and smartphone apps, consumers are getting more and more services like GPS for free (or at a significantly reduced cost compared to the past) today and displacing services that used to get accounted for as market-based production (maps and road atlases). In past decades like the 1950s, maybe economic output measured by GDP was a pretty good measure of both economic performance and Americans’ economic well-being. In 2016, that may no longer be the case.
Finally, the video below captures the point I’m trying to make by asking people:
How much would someone have to pay you to give up the Internet for the rest of your life? Would a million dollars be enough? Twenty million? How about a billion dollars?
“When I ask my students this question, they say you couldn’t pay me enough,” says Professor Michael Cox, director of the O’Neil Center for Global Markets and Freedom at Southern Methodist University’s Cox School of Business. The free market, says Cox, creates a huge gap between what consumers would be willing to pay for Internet access and how much it actually costs.
From the video: Since we’re getting something that we really value that is almost free, and wouldn’t give it up for even $1 million or more, “In some ways, maybe we’re all millionaires and billionaires, if we have something that’s worth that much to us… You might just be richer than you realize…”
Update/Related (HT: Joe Sullivan): From a July 2015 WSJ interview with Hal Varian, Google’s chief economist — “Silicon Valley Doesn’t Believe U.S. Productivity Is Down: Contrarian economists at Google and Stanford say the U.S. doesn’t have a productivity problem, it has a measurement problem”:“There is a lack of appreciation for what’s happening in Silicon Valley,” says Hal Varian, “because we don’t have a good way to measure it.” One measurement problem is that a lot of what originates here is free or nearly free.
Take, for example, a recent walk Mr. Varian arranged with friends. To find each other in the sprawling park nearby, he and his pals used an app that tracked their location, allowing them to meet up quickly. The same tool can track the movement of workers in a warehouse, office or shopping mall. “Obviously that’s a productivity enhancement,” Mr. Varian says. “But I doubt that gets measured anywhere.”
Consider the efficiency of hailing a taxi with an app on your mobile phone, or finding someone who will meet you at the airport and rent your car while you’re away, a new service in San Francisco. Add in online tools that instantly translate conversations or help locate organ donors—the list goes on and on.
Anyone need the services of a former MEP?
June 24, 2016Daniel Hannan argued that voters should fire him from his job as MEP by voting for Brexit. He got his wish.
Can this cat talk or what? What an orator! His closing lines here are by Tennyson:
“Though much is taken, much abides; and though
We are not now that strength which in old days
Moved earth and heaven, that which we are, we are”
I don’t know whether Brexit was a good move or not. I hope it was because Mr. Hannan makes such good sense on other, related topics. ‘Twould be a pity if he were wrong about this one.
Update 2: The headline of Matt Taibbi’s Rolling Stone piece says it all:
The Reaction to Brexit Is the Reason Brexit Happened
If you believe there’s such a thing as “too much democracy,” you probably don’t believe in democracy at allIn 1934, at the dawn of the Stalinist Terror, the great Russian writer Isaac Babel offered a daring quip at the International Writers Conference in Moscow:
“Everything is given to us by the party and the government. Only one right is taken away: the right to write badly.”
As a rule, people resent being saved from themselves. And if you think depriving people of their right to make mistakes makes sense, you probably never had respect for their right to make decisions at all.
This is all relevant in the wake of the Brexit referendum, in which British citizens narrowly voted to exit the European Union. […]
Update: Here’s an interesting column about Brexit at Hit & Run.
‘Who Rules Over You?’ Is Democracy’s Most Important Question
If there shouldn’t have been a Brexit referendum, should there even be elections?The Washington Post headline bluntly declares “Brexit is a reminder that some things just shouldn’t be decided by referendum.” [Sounds like Mr. Hannan quoting Jean-Claude Juncker, doesn’t it? Ed.]
Writer Emily Badger, whose focus is generally on urban policy, brings up American ballot initiatives—particularly those in California — as an example of how referendums can lead to bad outcomes, or rather outcomes that certain people don’t like.
After talking about a handful of Brits who publicly regret their vote (keep in mind that millions of people voted to leave), Badger points out correctly that public referendums can be used to undermine democratic institutions, both purposefully by special interest groups ranging from public sector unions to private corporations by directing taxes and government programs in their directions and by simple and not-so-simple unintended (or unpublicized) consequences.
Still, even when making this point, Badger commits some possibly unconscious biases to print when she writes about California, “Back in 1978, California voters generously decided in a ballot measure to cap their own property taxes in a way — amending the state constitution — that has hobbled ever since California’s ability to generate revenue and create reasonable housing policy.” The bold emphasis is mine to point out that her idea of a problematic referendum seems to inherently be anything that restrains the authority of the state. California’s ability to generate revenue has most assuredly not been hobbled even with this one restriction. It’s got some of the highest taxes and fees in the country. She uses “hobbled” to describe the idea that there are limits to what the state of California can afford to do, assuming that these are things that should be done.
But what should also be obvious during this entire “populist” vs. “elites” political battle happening both in the United States and Europe is that representative democracy under legislators has also led to taxes and government programs being directed to interest groups and all sorts of unintended or unpublicized consequences. And it’s an issue that some these same people do not want to seem to deal with. Instead, we get the “uneducated poor people voting against their own self-interest” arguments, like we see about Wales.
These responses are of the “These communities get more money from the European Union than they pay in” vein. We have seen similar arguments about American states who get more “money” from the federal government than they pay in taxes. Such an argument ignores the fact that these targeted communities don’t actually get more “money” than what they pay into the pool; what they get is more government administration and programs put together by various interest groups that tend to direct these subsidies to those with the right connections (in other words—”elites”). […]
The question of who rules over you is an elemental, central component of having a democratic republic. Treating Brexit like it’s just some complicated but very broad referendum is ignoring the nature of the question behind it. If British citizens shouldn’t get to vote whether to be in the European Union because they don’t “understand” all the issues involved, then why should they even get to vote on their legislators? Indeed, why have them vote at all?
The State is not your friend
May 9, 2016Here’s ten minutes of video about an FDA case (that I’d never heard of) against Vascular Solutions. I’ll bet most people haven’t heard about this case.
It’s a little long, but listen to the comments from Vascular Solutions’ employees and the letter that Mr. Root received from a juror after the trial.
Heh (3)
April 16, 2016I found this pretty amusing not only on its face but also because it reminded me of a similar discussion I had in the summer of 2000. At the time, I was managing a small development group in Minneapolis. One of the group members was a fairly hippie cat who wrote Java for the company’s web site. We came to get along fairly well and we spent a few evenings eating pizza (in the office) and discussing his Java and whether it was good object-oriented design.
I recall one day he was telling me about how he disliked American Consumerism (whatever that means) and how cool it would be instead if people could only trade with each other. I asked him if he meant that everyone would be bartering with one another.
No, he told me, it would have to be more flexible than that. So I asked if his "trading" scheme wouldn’t lead to some type of markets. He admitted it would and added that the thought discouraged him. I was a little bemused by that.
A Hippie Discovers Economics, And You’ll Never Guess What Happens Next!
What if we all grew crops and traded with each other? And what if we discovered the science of economics?A post from Facebook has been making the rounds, where I came across it by way of my Federalist colleague Scott Lincicome.
Here’s the mind-blowing argument: “If we each grow a large crop of different food, we could all trade with each other and eat for practically free.”
Where to start?
Well, for one thing, growing your own food isn’t exactly “free,” not even “practically free.” As anyone who has his own vegetable garden knows, it requires seeds, fertilizer, irrigation, weeding, protection from insects and birds and animals, and a lot of work. The cost may not all be measured in monetary terms, but it isn’t free. In fact, it’s notoriously easy for a vegetable garden to end up costing more money than it saves, which is why most of us do it just as a hobby. […]
But let’s not pick this apart. Let’s take the idea seriously. Hey, what if we all became small farmers and traded with each other? As they say on the Internet: you’ll never guess what happened next.
Maybe instead of everybody growing the same things, we could all produce what we’re best at and trade with others for what we need. We could come up with a catchy name for this, like “division of labor.” And we would need somewhere to exchange these goods with each other, which we could call a “market.”
Don’t Stop There!
Maybe we could get even more specialized. Some people could devote themselves just to growing young plants in greenhouses in the spring for others to plant when the weather gets warmer. Or they could provide seeds for other people to use, or breed hybrids with better yields or other desirable characteristics.
And maybe some crops would grow better in different areas, or at different seasons. I’ll bet you can’t grow blackberries in the middle of winter, but there are other areas of the country, or of the world, where these things still grow even when they won’t grow in your front yard. Maybe you could trade with people who live in those places.
Still, crops come ripe at different times, so maybe we need a system where I can trade my spring harvest of peas for somebody else’s fall harvest of pumpkins. Maybe we could write this all down on little pieces of paper which we pass between us to make trades. Has anybody ever thought of that? […]
It’s a tough problem to design a replacement for a system which generates an enormous bounty but which still doesn’t give the results you like. It’s an attitude I hear from Senator Sanders when he says things like, "You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country."
I take Sen. Sanders claim about hungry children as just more political hyperbole. Here’s a fact-checking article about how measures of "food security" have replaced measures of going hungry because, basically, there aren’t many children who actually go hungry. These days, there are just varying amounts of food in the pantry.
I won’t say that children never go hungry or are never poorly nourished but I suspect that when they do (or are), it’s not for lack of food but instead for lack of responsible parents or care-givers.
I’m not sure what the relationship is between "too many" choices in the consumer market and the number of irresponsible parents. I don’t think Sen. Sanders knows that relationship either.
Cognitive dissonance strikes again
April 9, 2016I’ve had my share of minimum-wage or low wage jobs; I’ve even held more than one at a time, years ago. I’ve been nickle & dimed, as Barbara Ehrenreich would call it.
So I’m all for people who work low-skill jobs getting all the pay they can. (For that matter, I’m all for people working any type of job to get all the pay they can.)
But letting the government set minimum wages is effectively saying that those people have no flexibility – they can’t bargain about wages because it becomes unlawful. That’s a nasty handicap if you’re new to the job market, or you’re new to a line of business, or you’re new to a particular area (see below).
I’ve mentioned before that Mark Twain claimed the best way to get the job you want is to go to work for free. When your value becomes apparent, the pay will follow. If it doesn’t become apparent, you’ve learned a lesson. That’s not possible when the law makes such a bargain illegal.
When did the U.S. repeal the law of supply and demand?
Back in October, The New York Times reported that the law of supply and demand still works. “Yes, Soda Taxes Seem to Cut Soda Drinking,” the newspaper told its readers, relating the results of Mexico’s new tax on sugary beverages. Mexico’s measure imposed a 10 percent tax on soft drinks, and so far has cut consumption from 6 percent to as much as 17 percent among the poorest Mexicans.
The efficacy of the soda tax comes as no great surprise. After all, as the news story noted, “the idea for the soda tax is in some ways modeled on . . . tobacco taxes. . . . A robust literature now exists showing that the resulting higher prices really did push down cigarette sales, particularly among young people.”
The paper’s editorial page soon came out in full cry demanding higher soda taxes for Americans, too. Noting that “a big tax on sugary drinks in Mexico appears to be driving down sales of soda,” the editors urged “lawmakers in the United States to consider comparably stiff taxes.”
Some already have. Soda taxes have become a chic cause in progressive enclaves, from Berkeley and San Francisco to Philadelphia and New York.
But if you want to make liberal heads in those same enclaves explode, dare to suggest that raising the minimum wage might reduce employment.
Thanks to legislation their governors signed Monday, California and New York are hiking their minimums to $15, the target hourly rate of a national campaign by labor activists. Earlier this year The Times encouraged Hillary Clinton to join Bernie Sanders in demanding a $15 minimum for the entire country. “Mrs. Clinton has argued that $15 might be too high for employers in low-wage states, causing them to lay off workers or make fewer hires,” the paper noted, but then argued: “There is no proof for or against that position.”
Sure there isn’t — not if you don’t remember the argument for soda taxes, anyway. […]
In San Francisco and Oakland, Calif., employment growth has been cut in half. In Seattle, job growth has plunged from 4.6 percent to 1.8 percent — even while restaurant hiring rose more than 6 percent for the rest of Washington State.
Sure, you can find studies that purport to show small hikes in the minimum wage don’t hurt jobs. You can find a lot more that say they do. But the more honest advocates for a higher minimum wage acknowledge that it will cost some people their jobs. But some argue that’s no big deal and might even be a feature, not a bug: “What’s so bad about getting rid of crappy jobs?” asks public-policy professor David Howell.Which is easy to say if the job being gotten rid of isn’t yours.
Now here’s the interesting part. Gov. Jerry Brown says (my emphasis):
Brown, traveling to the state’s largest media market to sign the landmark bill, remained hesitant about the economic effect of raising the minimum wage, saying, “Economically, minimum wages may not make sense.”
But he said work is “not just an economic equation,” calling labor “part of living in a moral community.”
“Morally and socially and politically, they (minimum wages) make every sense because it binds the community together and makes sure that parents can take care of their kids in a much more satisfactory way,” Brown said.
In this same vein, here’s an account by Mitch Hall about his job search in Seattle (which I assume happened late last year).
70 Tries After Seattle Raised Its Minimum Wage, I Still Can’t Find A Job
States nationwide are beginning to join the ‘Fight for $15.’ My job experience in Seattle, Washington helps illustrate why that’s a bad idea.Over the weekend, lawmakers and labor unions in California, the nation’s most populous state, reached a tentative agreement to gradually raise the minimum wage to $15 an hour over the course of the next several years. […]
Twenty-nine states have minimum wages that exceed the federally mandated $7.25 per hour. Heading into the 2016 election, the issue remains hotly contested and politically potent, with Republican presidential candidates in fierce opposition to, and Democratic candidates in strong support of, a dramatic increase in the federal minimum wage. […]
My opposition to minimum wage increases comes as a direct result of my own experience searching for jobs as a new resident of Seattle, Washington, a city that currently has one of the highest minimum wages in the nation. In June 2014, the Seattle City Council, composed of just nine members, unanimously voted to increase the city’s base pay to a whopping $15 an hour, to be gradually implemented over the course of several years.
I’ve spent the majority of the last two months stalking online job sites and entire days traversing the various neighborhoods of Seattle.
On January 1, 2016, the newly mandated minimum wage rose to $13 for larger companies (those that have more than 500 employees in the United States), and $10.50 for smaller employers (those with fewer than 500 employees in the United States). On top of this, Washington state law now requires businesses to adhere to this minimum even for tipped workers, a rule that only six other states have on the books.
In December, I found myself needing a break from college, for a variety of reasons. So at the close of last semester, I decided (rather impulsively, as young people are wont to do) to take my spring semester off from the College of William and Mary and move out west to try my luck in Seattle, a place I had only visited once before. […]
Having a combined two years of serving experience and close to five years of total experience in the customer and food services industries (which is literally as much as you can ask for from a 20-year-old college student), I assumed I’d be able to find a restaurant gig in no time. So, after reassuring my parents all would be well in the financial department, I boarded a plane in Philly a few weeks later and made the move.
Yet seven weeks and more than 70 job applications later, I still have yet to land a part-time, minimum wage job. I’ve spent the majority of the last two months stalking online job sites and entire days traversing the various neighborhoods of Seattle, filling out applications and inquiring about job opportunities at any restaurant, coffee shop, retail store, or other service-oriented establishment I can find. […]
At first, I was utterly dumbfounded by my lack of success, and figured only bad luck was to blame. After all, I had been hired at every single one of my past serving jobs within only a day or two of searching and applying. I’d have to find something in Seattle eventually, I thought; I’m young, competent, and college-educated, and serving is by no means a highly skilled occupation that requires degrees or extensive training. I know how to make a good impression with prospective employers, and I already have years of experience in the food services industry. What more could these people want?
Employers, especially in the restaurant and food services industries, are far less willing to take chances on who they hire with so much money on the line.
But soon enough it became clear, through talking with potential employers and local college students also trying to find work, that my failure to land a job was likely due, at least in large part, to Seattle’s absurdly high minimum wage. […]
I think the real problem here is what to do about those who are seemingly stuck in low-skill jobs. I don’t think they’re the majority of people in those jobs, but they’re the chronic cases that seem to motivate the urge to raise minimum wages.
Here’s a graph from the Bureau of Labor Statistics (Dept. of Labor). It’s titled: Minimum wage workers account for 4.7 percent of hourly paid workers in 2012.
This report (at the Heritage Foundation) says the same thing: Who Earns the Minimum Wage? Suburban Teenagers, Not Single Parents.
Just eyeballing that graph above, my guess is that maybe a third of the people making minimum wage are heads of households. If I’m right, that’s 33% of 4.7% or 1.6% of the total labor force.
A better approach would be to address directly the needs of the adults stuck in those jobs rather than raising the bar for everyone, children included. Don Boudreaux and Nick Gillespie touch on these points in this interview.
Taking a cue from Governor Brown, is it "moral" to inflict hardships on a large class in order to relieve a small number of those people from other hardships? I’d disagree. I’d say that’s an immoral action by a government based on purely utilitarian grounds (greatest good for the greatest number).
Bear in mind that it’s a different case if particular individuals step up and volunteer for hardships in order to spare their peers or fellow citizens – in that case, the action may be admirable and moral. But when it’s legally compulsory, it’s just so much bullying by legislators.
Update: Now this I can believe. Based on what I read, I think that unions are trying to regain the political power they once exercised; so this explanation seems possible. But dang… it’s gotta sting to be a union member who’s making less than the minimum wage championed by your union. Where’s the brotherhood?
If you thought that the union-backed #FightFor15 movement was really about making sure that all workers earned a living wage—rather than about using the government to enrich progressive interest groups—think again. The Guardian:
Los Angeles city council will hear a proposal on Tuesday to exempt union members from a $15 an hour minimum wage that the unions themselves have spent years fighting for.
The proposal for the exemption was first introduced last year, after the Los Angeles city council passed a bill that would see the city’s minimum wage increase to $15 by 2020. After drawing criticism last year, the proposed amendment was put on hold but is now up for consideration once again.
As it turns out, this practice is not uncommon. The WSJ reported last year that at least six municipalities have created special minimum wage carveouts for unions. The logic is straightforward: Kill non-unionized jobs, add more workers to the union rolls, and extract higher fees for union bosses. It’s not a minimum wage hike the labor movement is after, exactly: It’s a penalty on non-union employers, and a payout for modern-day Jimmy Hoffas. Expect unions in California and New York, which recently enacted statewide $15 minimums, to start lobbying legislators for their own sweetheart deals in the near future. […]
Update 2:
Here’s an interesting graph from Business Insider. It explains to some extent how California can get away with its hike in the minimum wage: it’s easy when you have one of the lowest minimum-wage work forces in the country.
Ruining Cuba
April 9, 2016Here’s an recent op-ed by Natalie Morales in Flood Magazine that’s both interesting and snarky. I found her advice about clothing amusing, for one thing. It reminds me of the post in January about "North Korea with palm trees."
Please Stop Saying You Want to Go to Cuba Before It’s Ruined
Editor’s Note: Natalie Morales’ Op-Ed was written before President Obama announced his intention to travel to Cuba and is not in any way intended to be a response to the president’s remarks.
Just last week, I was at my friend Michaela’s house dropping off a bag of stuff I’m sending to my family in Cuba. Her husband, Fred, is visiting Havana and was kind enough to be my courier. Among the things I sent with Fred were two packages of Cuban coffee. Yes, that’s right: I’m sending Cuban coffee to Cuba. It’s absurd and hilarious and I got a real kick out of telling everyone I came across that day about it. This is because Cuban coffee is too expensive for the average Cuban to buy in Cuba. […] I, on the other hand, buy it for three bucks at Target.
Coffee is just one of the things my family in the States sends to my family in Cuba. Usually, monthly, we send money, medicine or syringes for the diabetic aunt (since the hospital doesn’t have any unused disposable ones), baby clothes, adult clothes, shoes, or food (there’s a website for Americans to buy food that is sent to Cuba, but at an absurd upcharge). They cannot survive without our help. For many Cuban-American families all over the States, this is just a regular part of life, another bill to pay each month.
Here’s a terse explanation of why: a doctor, a lawyer, or another similar profession that is considered to be high-earning everywhere else in the world will make about twenty to thirty dollars per month in Cuba. Yet shampoo at the store still costs three dollars. This is because everything is supposed to be rationed out to you, but the reality is that they’re always out of most things, and your designated ration is always meager. […] That’s good ol’ Communism in practice.
Now, knowing this, picture me at any dinner party or Hollywood event or drugstore or press interview or pretty much any situation where someone who considers themselves “cultured” finds out I’m Cuban. I prepare myself for the seemingly unavoidable “Ooh, Cuuuuuba” — as if the country itself were somehow a sexy woman or delicious food — followed by the inevitable, “I have to go there before it’s ruined!” I try to be polite, because I am aware that, oftentimes, people who think they are very thoughtful are the least thoughtful. So I ask, “What do you mean by ruined?” and they always say, “You know, it’s so cool looking! It’s stuck in time! They have all the old cars and stuff… Everything’s gonna change soon!”
So depending on the situation […], I will say some version of this: "What exactly do you think will ruin Cuba? Running water? Available food? Freedom of speech? Uncontrolled media and Internet? Access to proper healthcare? You want to go to Cuba before the buildings get repaired? Before people can actually live off their wages? Or before the oppressive Communist regime is someday overthrown?" […]
If you want to go to Cuba, I want you to go. I do. But can I ask a favor? Be aware of what’s going on there. Try, if you can, to stay in people’s homes — casas particulares — instead of hotels. They’ll take much better care of you, the food will be much better, and you’ll be putting a little less money into Castro’s tourism pocket. When you go, ask the people to tell you what’s really going on… not the version they’re supposed to tell you. […] Also, for God’s sake, please don’t wear a fucking Che t-shirt.
H.T. Jeff G
They’re paying the piper in Venezuela
February 16, 2016Here’s the start of a recent article about Venezuela in the Wall Street Journal. It’s behind their paywall, of course.
Venezuela’s Collapse Brings ‘Savage Suffering’
Dying infants, chronic power outages and empty shelves mark the world’s worst-performing economyCARACAS, Venezuela—In a hospital in the far west of this beleaguered country, the economic crisis took a grim toll in the past week: Six infants died because there wasn’t enough medicine or functioning respirators.
Here in the capital, the crisis has turned ordinary life into an ordeal for nearly everyone. Chronic power outages have prompted the government to begin rationing electricity, darkening shopping malls. Homes and apartments regularly suffer water shortages.
Rosalba Castellano, 74 years old, spent hours this week in what has become a desperate routine for millions: waiting in long lines to buy whatever food is available. She walked away with just two liters of cooking oil.
“I hoped to buy toilet paper, rice, pasta,” she said. “But you can’t find them.” Her only choice will be to hunt for the goods at marked-up prices on the black market. The government, she said, “is putting us through savage suffering.”
The National Assembly, now controlled by the opposition, declared a food emergency on Thursday—an attempt to spur the government of President Nicolás Maduro to, among other things, ease price controls that have created shortages of everything from medicine to meat.
“The people are being left without the ability to feed themselves,” said lawmaker Omar Barboza.
Inflation in this oil-rich country is expected to hit a world’s-worst 700% this year, according to the International Monetary Fund. The economy shrank by 10% last year and is expected to decline another 8% this year, according to the IMF, the worst performance in the world. And there is no end in sight. […]
Like a North Korea with palm trees
January 12, 2016That’s one tourist’s take in this article from The New Yorker.
Shopping in Cuba
In the markets and shops of Cuba, handicrafts are in ample supply but certain mundane provisions are not.A Spanish-English dictionary, sunscreen, insect repellent, a towel, chocolate ice cream: these are the items that eluded me during a recent trip to Cuba. For all the hoopla about the island’s opening and the more than three million tourists who swamped it last year, Cuba is no country for shoppers. The more mundane the object of desire, the more exasperating it can be to find.
I’m not saying that these common items are completely unavailable in Cuba—I’m sure they are for sale somewhere on the island—but I couldn’t locate them. And I did look. […]
Having been a foreign correspondent in Eastern Europe in the nineteen-nineties, and more recently in China, I have some experience with Communist and post-Communist countries. In Cuba I saw elements of many of them, from Albania to Vietnam. Like Prague in the nineteen-nineties, Havana’s old city is swarming with tourists who gaze at the faded splendor of its Belle Époque architecture. Private restaurants inside these elegant wrecks, called paladares, beckon tourists with creative meals made out of the few ingredients available locally, mostly chicken, pork, cabbage, rice, and beans.
But Cuba also looks to me like a North Korea with palm trees. To be sure, Cuba has evolved politically, investing in education and health care rather than weapons of mass destruction. But the economic fundamentals in these last bastions of Communism are much the same. Like North Korea, Cuba maintains a distribution system in which citizens pay a low cost for inadequate rations of staple foods. […]
H.T. Jeff G
As the author points out, el socialismo cubano is more humane than some of the Asian and European variants. But, still, economic central planning has yet to work as well free markets (to the best of my knowledge).
It makes you wonder about the motives of people who keep imposing that planning on others, doesn’t it?
Thanks to the Hand
November 25, 2015Jeff G sends a link to this column by Jeff Jacoby that appeared in The Boston Globe in 2003. RTWT. My emphasis (and Jeff G’s) below.
As I like to put it (or tl;dr) "Don’t bite the Invisible Hand that feeds you."
Giving thanks for the ‘invisible hand’
GRATITUDE TO THE ALMIGHTY is the theme of Thanksgiving, and has been ever since the Pilgrims of Plymouth brought in their first good harvest. “Instead of famine, now God gave them plenty,” their leader, Governor William Bradford, later wrote, “and the face of things was changed to the rejoicing of the hearts of many, for which they blessed God.”
The annual presidential Thanksgiving proclamations always invoke God, and they frequently itemize the blessings for which we owe Him thanks. […]
Today, in millions of homes across the nation, God will be thanked for many gifts — for the feast on the table and the company of loved ones, for health and good fortune in the year gone by, for peace at home in a time of war, for the incalculable privilege of having been born — or having become — American.
But it probably won’t occur to too many of us to give thanks for the fact that the local supermarket had plenty of turkey for sale this week. Even the devout aren’t likely to thank God for airline schedules that made it possible for some of those loved ones to fly home for Thanksgiving. Or for the arrival of Master and Commander at the local movie theater in time for the holiday weekend. Or for that great cranberry-apple pie recipe in the food section of the newspaper. […]
And yet, isn’t there something wondrous — something almost inexplicable — in the way your Thanksgiving weekend is made possible by the skill and labor of vast numbers of total strangers? […]
No turkey czar sat in a command post somewhere, consulting a master plan and issuing orders. […]
Adam Smith called it “the invisible hand” — the mysterious power that leads innumerable people, each working for his own gain, to promote ends that benefit many. Out of the seeming chaos of millions of uncoordinated private transactions emerges the spontaneous order of the market. […] No dictator, no bureaucracy, no supercomputer plans it in advance. Indeed, the more an economy is planned, the more it is plagued by shortages, dislocation, and failure. […]
Mr. Jacoby’s opinion is backed by the reactions of Russian visitors to the US during the Cold War. The snippet below comes from Back in the USSR (in the Winter 2004 edition of Boston College Magazine). My emphasis again.
For Russians, most of whom have a heritage in agriculture, such a visit exposed the shortcomings of Soviet agriculture and by extension the Soviet system. “Why do we live as we do?” was a question many of them ended up asking, according to a veteran State Department interpreter who has escorted many Russians around the country:
Their minds were blown by being here. They could not believe there could be such abundance and comfort. Many of them would even disparage things here. “Excess, who needs it,” they would say. However, you could see that they did not believe what they were saying. When they returned home, in their own minds and in the privacy of their own trusted little circle of family and friends, they would tell the truth to themselves or to others.
ACCOUNTS OF Soviets’ astonishment on visiting their first American supermarket are legion, from the first Russian students who came to the United States in the late 1950s and early 1960s, to the future Russian president Boris Yeltsin in 1989.
Thank goodness for free markets.
The world farm report
October 16, 2015Matt Ridley writes about the (northern hemisphere) harvest season, both globally and on his own piece of land.
BUMPER HARVESTS RELEASE LAND FOR NATURE
This week’s autumn equinox is traditionally the time for the harvest festival. I have just taken a ride on the combine harvester cutting wheat on my farm. It is such a sophisticated threshing machine that long gone are the days when I could be trusted to take the controls during the lunch break. A screen showed how the GPS was steering it, inch-perfect and hands-free, along the edge of the unharvested crop; another screen gave an instant readout of the yield. It was averaging over five tonnes per acre (or 12 tonnes per hectare) — a record. […]
Last week, my fields were yielding 60 or 70 grains (seeds) of wheat for every grain that had been planted a year before. This would astonish our ancestors. A farmer in England in the 1300s was lucky to get four grains for every grain he planted. One of those four had to be saved for next year’s planting, leaving a precarious three to feed not only his own family but the various chiefs, priests and thieves who fed off him.
The truly surprising thing about this bounty is that not only are yields going up and up, in Britain as in the rest of the world, but that the amount of land required to produce that food is going down; and so is the amount of pesticide and fertiliser. Not just in relative terms, but in absolute terms. […]
At Mark Perry’s Carpe Diem blog, he links Ridley’s article and includes this image.
(Paul Ehrlich, please call your office.)
Update 10/22/15
Here’s a related graph which appeared yesterday at Carpe Diem.
I’m not a farmer but I know a few. My guess is that one big factor driving this trend is the adoption of man-made fertilizers after World War II.
One fellow I know, who in his spare time helps his dad farm, told me that his dad recalls the days before anhydrous ammonia became available. Back then the only choice was to fertilize with manure and supplies of that were limited.
No Truce With Kings 