Labor Economics – Page 59 – artdiamondblog.com

Fewer Jobs Under Obama’s High-Cost Health Plan

“Dave Ratner, owner of four pet stores in Western Massachusetts, is worried about being able to pay into a state health benefits plan.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A16) AGAWAM, Mass. — Dave Ratner, owner of Dave’s Soda and Pet City, is pretty sure he is about to get “whacked” by the new state law that requires employers to contribute to health care benefits for their workers or pay a $295-per-employee penalty. In order to avoid thousands of dollars in fines, Mr. Ratner is considering not adding part-time workers at his four pet supply stores in Western Massachusetts.

But the penalty in Massachusetts is picayune compared with what some health experts believe Senator Barack Obama, the Democratic presidential nominee, might impose as part of his plan to provide affordable coverage for the uninsured. Though Mr. Obama has not released details, economists believe he might require large and medium companies to contribute as much as 6 percent of their payrolls.
That, Mr. Ratner said, would be catastrophic to a low-margin business like his, which has 90 employees, 29 of them full-time workers who are offered health benefits.
“To all of a sudden whack 6 to 7 percent of payroll costs, forget it,” he said. “If they do that, prices go up and employment goes down because nobody can absorb that.”

For the full story, see:

KEVIN SACK. “Businesses Wary of Details in Obama Health Plan.” The New York Times (Mon., October 27, 2008): A16.

Women Earn More than Men, in New York City

Source of the graph: online version of the NYT article cited below.

(p. A1) Young women in New York and several of the nation’s other largest cities who work full time have forged ahead of men in wages, according to an analysis of recent census data.

The shift has occurred in New York since 2000 and even earlier in Los Angeles, Dallas and a few other cities.

Economists consider it striking because the wage gap between men and women nationally has narrowed more slowly and has even widened in recent years among one part of that group: college-educated women in their 20s. But in New York, young college-educated women’s wages as a percentage of men’s rose slightly between 2000 and 2005.

The analysis was prepared by Andrew A. Beveridge, a demographer at Queens College, who first reported his findings in Gotham Gazette, published online by the Citizens Union Foundation. It shows that women of all educational levels from 21 to 30 living in New York City and working full time made 117 percent of men’s wages, and even more in Dallas, 120 percent. Nationwide, that group of women made much less: 89 percent of the average full-time pay for men.

Just why young women at all educational levels in New York and other big cities have fared better than their peers elsewhere is a matter of some debate. But a major reason, experts say, is that women have been graduating from college in larger numbers than men, and that many of those women seem to be gravitating toward major urban areas.

For the full story, see:

SAM ROBERTS. "For Young Earners in Big City, a Gap in Women’s Favor." The New York Times (Fri., August 3, 2007): A1 & A16.

Source of the graph: online version of the NYT article cited above.

Schumpeter Claimed Entrepreneurial Gains Result in New Jobs

From McCraw’s summary of an article entitled “The Function of Entrepreneurs and the Interest of the Worker” that Schumpeter published in 1927 in a labor magazine :

(p. 178) Schumpeter’s key point here is one he hammered home many times: it is the insatiable pursuit of success, and of the towering premium it pays, that drives entrepreneurs and their investors to put so much of their time, effort, and money into some new project whose future is completely uncertain. High entrepreneurial returns are essential to generate gains not only for individuals but also for society, through the creation of new jobs.

Source:
McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

Supporters of Racial Discrimination Fear Allowing People to Vote

(p. A9) A total of 24 states allow voters to change laws on their own by collecting signatures and putting initiatives on the ballot. It’s healthy that the entrenched political class should face some real legislative competition from initiative-toting citizens. Unfortunately, some special interests have declared war on the initiative process, using tactics ranging from restrictive laws to outright thuggery.

The initiative is a reform born out of the Progressive Era, when there was general agreement that powerful interests had too much influence over legislators. It was adopted by most states in the Midwest and West, including Ohio and California. It was largely rejected by Eastern states, which were dominated by political machines, and in the South, where Jim Crow legislators feared giving more power to ordinary people.
But more power to ordinary people remains unpopular in some quarters, and nothing illustrates the war on the initiative more than the reaction to Ward Connerly’s measures to ban racial quotas and preferences. The former University of California regent has convinced three liberal states — California, Washington and Michigan — to approve race-neutral government policies in public hiring, contracting and university admissions. He also prodded Florida lawmakers into passing such a law. This year his American Civil Rights Institute (ACRI) aimed to make the ballot in five more states. But thanks to strong-arm tactics, the initiative has only made the ballot in Arizona, Colorado and Nebraska.
“The key to defeating the initiative is to keep it off the ballot in the first place,” says Donna Stern, Midwest director for the Detroit-based By Any Means Necessary (BAMN). “That’s the only way we’re going to win.” Her group’s name certainly describes the tactics that are being used to thwart Mr. Connerly.
Aggressive legal challenges have bordered on the absurd, going so far as to claim that a blank line on one petition was a “duplicate” of another blank line on another petition and thus evidence of fraud. In Missouri, Secretary of State Robin Carnahan completely rewrote the initiative’s ballot summary to portray it in a negative light. By the time courts ruled she had overstepped her authority, there wasn’t enough time to collect sufficient signatures.
Those who did circulate petitions faced bizarre obstacles. In Kansas City, a petitioner was arrested for collecting signatures outside of a public library. Officials finally allowed petitioners a table inside the library but forbade them to talk. In Nebraska, a group in favor of racial preferences ran a radio ad that warned that those who signed the “deceptive” petition “could be at risk for identity theft, robbery, and much worse.”
Mr. Connerly says that it’s ironic that those who claim to believe in “people power” want to keep people from voting on his proposal: “Their tactics challenge the legitimacy of our system.”

For the full commentary, see:
JOHN FUND. “The Far Left’s War on Direct Democracy.” The Wall Street Journal (Sat., July 26, 2008): A9.

Americans Happy with Work if Advancement is Possible

Source of book image: http://www.arthurbrooks.net/images/book-2.gif

(p. A13) In “Gross National Happiness,” Mr. Brooks has assembled an array of statistics to measure the mood of America’s citizens and to discover the reasons they feel as they do. Most often he cites polls that ask for self-described happiness levels, matching up the answers with various beliefs, habits, life choices or experiences.
And what exactly is happiness? Who knows? The term might refer joy or contentment or moral self-approval or material well-being or appetitive pleasure – or some combination of them all. Mr. Brooks is aware of the problem. He says that Potter Stewart, the Supreme Court justice, could have been describing happiness when he said, of pornography, “I know it when I see it.”
. . .
He challenges those partial to tales about long-suffering Wal-Mart workers and surly burger flippers to rethink their victimology creed. The woe is not nearly as widespread as rumored: 89% of Americans who work more than 10 hours a week are very satisfied or somewhat satisfied with their jobs while only 11% are not very satisfied or not at all satisfied. Most surprisingly, Mr. Brooks writes, there “is no difference at all in job satisfaction between those with below-average and above-average incomes.”
What really makes Americans hate their jobs is a perception that advancement is impossible. And while Mr. Brooks agrees that the nation’s income gap is growing, the national happiness level is steady. Just under one-third of American adults say that they are “very happy”; up to 15% are not too happy; and everyone else is somewhere in the middle. Those numbers have been roughly true since the early 1970s. More government spending doesn’t seem to raise happiness levels, though direct government assistance may diminish it. Charitable giving, Mr. Brooks adds, generally lifts the spirits; Americans do a lot of it.

For the full review, see:
DAVE SHIFLETT. “Bookshelf; How to Be of Good Cheer.” The Wall Street Journal (Mon., May 12, 2008): A13.
(Note: ellipsis added.)

“We Educate Them and Then Tell them to Go Home”

(p. C3) The United States may be synonymous with the high-tech revolution, but it is in danger of losing its high-tech edge, according to Cybercities 2008, a report released Tuesday by AeA, a technology industry trade association.
Because the federal government does not issue a sufficient number of green cards or work visas to talented foreign students studying here, there are a “tremendous number of unfilled jobs,” said Christopher Hansen, AeA’s chief executive.
“We educate them and then tell them to go home. This is absurd,” said Mr. Hansen, whose group has lobbied to increase the number of visas for foreign technology industry workers.

For the full story, see:
ERIC A. TAUB. “U.S. High Tech Said to Slip.” The New York Times (Weds., June 25, 2008): C3.

Ordinary People Have Prospered in Recent Decades

Source of image: http://mjperry.blogspot.com/2008/02/blog-post_2174.html

Stephen Moore is right when he calls Drew Carey’s “Living Large” video “wonderful.”
It would be even more wonderful, if it gave a bit more emphasis, a la Schumpeter, to the positive effects of new products, in addition to its emphasis on declining prices of already existing products.

(p. W11) A few weeks ago I gave a talk on the state of the economy to a group of college students — almost all Barack Obama enthusiasts — who were griping about how downright awful things are in America today. As they sipped their Starbucks lattes and adjusted their designer sunglasses, they recited their grievances: The country is awash in debt “that we will have to pay off”; the middle class in shrinking; the polar ice caps are melting; and college is too expensive.
I’ve been speaking to groups like this one for more than 20 years, but I have never confronted such universal pessimism from a young audience. Its members acted as if the hardships of modern life are making it nearly impossible for them to get out of bed in the morning. So I conducted a survey of these grim youngsters. How many of you, I asked, own a laptop? A cellphone? An iPod, a DVD player, a flat-screen digital TV? To every question somewhere between two-thirds and all of the hands in the room rose. But they didn’t even get my point. “Well, duh,” one of them scoffed, “who doesn’t have an iPod these days?” I was way too embarrassed to tell them that I, for one, don’t. They thought that living without these products would be like going back to prehistoric times.
They seemed clueless that as recently as the early 1980s only the richest people in the world had cellphones and the quality of these products left much to be desired. Watch a movie from 20 years ago and you will laugh out loud seeing big clunky black machines that weighed as much as a brick, gave crackly service and cost $4,200. Now cellphones are practically free — even disposable. And the cost of making calls has dropped dramatically too.
. . .
There’s a wonderful new video on Reason.tv called “Living Large.” In it, comedian Drew Carey goes to a lake in California where people are relaxing on $80,000 27-foot boats and goofing around on $25,000 jet skis that they have hitched to their $40,000 SUVs. Mr. Carey asks these boat owners what they do for a living. As it turns out, they aren’t hedge-fund managers. One is a gardener, another a truck driver, another an auto mechanic and another a cop.
. . .
After my lecture, one young woman walked up to me on her way out and huffed: “What I favor is a radical redistribution of wealth in America.” I tried to tell her that America’s greatness is a result of our focus on creating wealth, not redistributing it. But it was too late — she was already tuning in to her iPod.

For the full commentary, see:
STEPHEN MOORE. “DE GUSTIBUS; The Bare Necessities: A Generation Tries to Imagine Life Without iPods.” The Wall Street Journal (Fri., March 14, 2008): W11.
(Note: ellipses added.)
The video is:
Carey, Drew. “Living Large: The Middle Class.” reason.tv Posted February 8, 2008.

Obama Top Economist Likes Wal-Mart and Sees Improved Worker Living Standards

(p. C1) Acting quickly after securing his party’s presidential nomination, Barack Obama picked a well-known representative of Bill Clinton’s economic policies as his economic policy director and signaled this week that the major players from the Clinton economics team were now in his camp — starting with Robert E. Rubin.
Senator Obama, Democrat of Illinois, hired Jason Furman, a Harvard-trained economist closely associated with Mr. Rubin, a Wall Street insider who served as President Clinton’s Treasury secretary. Labor union leaders criticized the move, and said that ”Rubinomics” focused too much on corporate America and not enough on workers.
. . .
(p. C4) Mr. Furman, who served for a while as a special economic adviser in the Clinton administration, has taken some controversial positions. He argued in 2005, for example, that Wal-Mart, despite its conflicts with organized labor over pay and health insurance, was a good business model.
More recently, he argued that while the typical worker suffers from inadequate income, that worker’s living standards, broadly measured, are higher today than those of their counterparts 30 years ago — an argument in dispute among economists.
. . .
Until now, Austan Goolsbee, an economist at the University of Chicago, had been Mr. Obama’s chief economic adviser. He remains an unpaid adviser. He said he was not a candidate for Mr. Furman’s full-time job because of his university duties.

For the full story, see:
LOUIS UCHITELLE. “Union Critical of Obama’s Top Economics Aide.” The New York Times (Thurs., June 12, 2008): C1 & C4.
(Note: ellipses added.)

Free Trade Defended By Democratic Leadership Council Founder

(p. A15) Where are the pro-trade Democrats? America won’t increase middle-class incomes and create jobs without them.
. . .
History proves that expanding trade and productivity help create growth. We learned that the hard way when the Smoot-Hawley tariff helped crush trade and exacerbate the Great Depression. Conversely, we have seen trade drive the economy during the great expansions of the 1960s and 1990s.
. . .
Trade gives poor people around the globe the opportunity to build a brighter future. During the Clinton administration, new trade programs like the African Growth and Opportunity Act helped key regions in the world succeed, while American workers stood to gain.
I helped found the Democratic Leadership Council in the wake of Walter Mondale’s 49-state defeat in 1984, and we have always supported expanded trade. We still have a ways to go to win that argument in the Democratic Party. But the record is clear. Over the past 20 years, our party has grown stronger when we’ve been willing to do the right thing on the toughest issues, from putting the nation’s fiscal house in order to overhauling a broken welfare system that trapped millions in poverty.

For the full commentary, see:
AL FROM. “Confessions of a Pro-Trade Democrat.” The Wall Street Journal
(Mon., June 9, 2008): A15.
(Note: ellipses added.)

“Innovation Has Helped Lift Untold Numbers Out of Poverty”

Source of graph: online version of the WSJ article quoted and cited below.

(p. A23) . . . the impact of our technological innovation has helped lift untold numbers out of poverty.
This technology has created massive amounts of change. Like the Industrial Revolution before it, the current transformation is anything but pain-free. It’s what Joseph Schumpeter called creative destruction. Google, Craigslist and Microsoft have been prospering. General Motors, United Airlines and the New York Times have not. In the midst of layoffs in the newsroom, it’s hard to see anything good happening in the rest of the economy.

For the full commentary, see
BRIAN WESBURY. “Change We Can Believe In Is All Around Us.” The Wall Street Journal (Weds., June 11, 2008): A23.
(Note: ellipsis added.)