I’m sort of skeptically agnostic about the end of work. Yes, this has been predicted before, and never arrived. On the other hand, history is full of stuff that was predicted and didn’t arrive, until suddenly it did. So maybe this time is really different.
And what do we do if it is? I don’t know. I don’t think UBI [Universal Basic Income] is the answer. We have a fair amount of data about what places look like where large numbers of people are subsidized not to work. The answer is “like nowhere you’d want to live”. The predicted flowering of artistic and community endeavor does not arrive; people are depressed, less social, and spend a great deal of time on activities like watching television.
To this, UBI advocates rejoinder “But what about trust fund babies and old-style aristocrats! Everyone admires their lives of leisure!” To which my answer is “Heck no, I don’t”. The lives of the idle rich are better upholstered than the out-of-work poor, but suffer the same absence of meaning and community. They are not a model to which anyone should aspire.
Megan McArdle, “Ask Me Anything”, Reddit, 2017-04-10.
April 10, 2019
QotD: UBI and the “end of work”
February 25, 2019
“Alexandria Ocasio-Cortez [is] doing for America what Jeremy Corbyn has done for Britain”
Alex Noble sings the praises of Alexandria Ocasio-Cortez as she does the heavy lifting to bring awareness of socialism to the American people:
Alexandria Ocasio-Cortez speaking at the Reardon Convention Center in Kansas City, on 20 July 2018.
Photo by Mark Dillman via Wikimedia Commons.
Good old Alexandria Ocasio-Cortez – she’s doing for America what Jeremy Corbyn has done for Britain. Much to the dismay of the secret socialists now entrenched in the Democrat Party, she is stripping away the protective layer of bullshit that socialism normally has to rely upon to keep people from understanding its inherent failings, and is thus laying it bare before the world.
Because she is too ignorant to understand them – she actually believes in socialism, and thinks that if only it is adequately explained to the rest of us, we will love it as she does.
She doesn’t know enough history to know that everyone over the age of forty has seen socialism tried a dozen times in their lifetimes. Her sales pitch is wasted on us – we’ve seen the results before.
So when she told Amazon that their particular brand of crony capitalism was not welcome in New York, she genuinely thought people would admire her.
Instead, even the crony capitalists on the Democrat side of the aisle (i.e those who understand how the game is really played) are very upset with her – she has driven away 25,000 jobs and all the
voteseconomic benefits that would have flowed from them.All because she thinks Amazon should pay more corporation tax.
February 16, 2019
Indian government considers hiking the national minimum wage
Tim Worstall explains why this is a bad idea that won’t do much — if anything — to improve the lot of workers already earning the current minimum wage, and might well make things worse:
It’s not surprising that this is happening, India mooting a rise in the national minimum wage. There is, after all, an election in the offing. Just when we would expect crowd pleasing but bad ideas to surface. The problem here is that the Indian minimum wage is already too high. Increasing something that’s too high is not sensible policy. […]
Sure, we can declare a floor price and that will be valid wherever the government’s writ runs. Which, in the Indian economy, isn’t all that far.
The national minimum wage could be set at Rs 9,750 per month, almost double the current level, along with an additional Rs 55 per day of average HRA for urban workers, an expert committee has submitted. The January report, which went public for suggestions on Thursday, has also suggested an alternate plan, with a range of Rs 8,892-11,622 per month of national minimum wage for five different regions as they have diverse socio-economic and labour market situations, The Indian Express reported.
The specific details don’t matter all that much because the Indian government isn’t that powerful in economic matters.
The point being that any formal minimum wage will only apply to people in the formal economy. Depending upon who you want to believe between 80 and 90% of the Indian economy is over in the informal sector. That’s the part of the economy that doesn’t have health and safety standards, proper contracts and minimum wages. And our proof that the current minimum wage is too high is exactly that, that most of the economy isn’t in the formal sector where it applies.
In one manner raising that Indian minimum wage is an irrelevance because it affects so few people. In another it’s actively bad, as it makes it more expensive to join that formal economy, thus making it less likely. Thus it’s a bad idea either way. But you know, elections, politics.
January 28, 2019
QotD: Inequality in academia
We’ve heard a lot about the problem of inequality in America over recent years. But most of that talk has ignored one of the very worst pockets of inequality in American society. I speak, of course, of the American university system and its treatment of adjunct professors and graduate students.
Academics seem to think that the business world is a feudal environment characterized by huge status differentials and abusive treatment of underlings. They think that because, to be honest, that’s a pretty good characterization of … the modern university, where serfs in the form of adjunct professors toil in the vineyards.
Glenn Reynolds, “Trump should pity the poor PhD: New president should target worker exploitation at American universities”, USA Today, 2017-02-16.
January 22, 2019
Ending India’s longstanding caste system privileges
In the Continental Telegraph, Tim Worstall outlines the political change that might end up undermining the caste system to a large degree:
India has long had a series of reservations and quotas for varied classes. Dalits – formerly the untouchables – have long had privileges in access to university and government jobs for example. Over time, as such political systems do, the list of those classes privileged has grown.
Obviously enough, as such political systems do work, a major cause of unrest has been further classes, castes and groupings demanding that they be added to the list of groups that receive such privileges. And given electoral cycles that list has grown. The cynic will not be surprised to find that the surest method of a group being added to the list is to be the swing vote in a hotly contested election. We’re not talking about purity of motive here.
Of course, such a system eats away at the nation – we get into that communal division of the spoils rather than the lovely capitalist and free market game of increasing the spoils to be argued over. Which leaves us with a certain problem, leaves India with a certain problem.
[…]
If everyone’s covered by a reservation, if all are so privileged, then sure, we’ve an inefficient system still but we have also effectively abolished the value of having a reservation, a privilege. Thus the solution, the end game. So devalue the privilege as to make it effectively not exist by extending it to everyone.
January 9, 2019
Sticky Wages
Marginal Revolution University
Published on 2 May 2017Imagine you’re an employer during a recession, and you desperately need to cut labor costs to keep your firm afloat. Are you more likely to cut wages across the board for all employees, or institute layoffs for only some?
While it may seem that wage cuts are the “better” choice, they aren’t as common as you might think. Why is that?
To answer that question, this video explores a phenomenon known as “sticky wages.”
In other words, wages have a tendency to get “stuck” and not adjust downwards. This occurs even during a recession, when falling wages would help end the recession more quickly.
However, that’s not to say that wages cannot adjust downward for an individual during a recession. This can happen, but likely only after an employee has been fired from their initial job, and eventually rehired by a different firm at a lower wage rate.
Back to our original question — why are employers unlikely to cut wages? A big reason has to do with the effect on morale. Employees may become disgruntled and angry when they experience a nominal wage cut, and become less productive.
An important note here — notice that we said nominal wage cut, meaning, not adjusted for inflation. If an employee receives a 3% raise in nominal wages, they may remain happy in their current position. But what if inflation is 5%? What does this mean for their real wage? (Hint: For an in depth answer to this question check out our earlier Macroeconomics video on “money illusion.”)
Next week we’ll return to our discussion on the AD/AS model for a look at how factors such as “sticky wages” affect the economy in the short run.
January 4, 2019
QotD: The modern C.V.
Take that ghastly soul-destroying document, the curriculum vitae. It is as inherently inflationary as clipping the coinage or fiat money. A friend of mine, whom I knew to be competent and conscientious, consistently failed to be appointed to positions for which he was eminently qualified. My wife, who knew the ways of modern appointment committees, asked to see the curriculum vitae he was supplying with his applications for the jobs.
She was horrified: He would never get a job with such a curriculum, it was far too old-fashioned. It gave merely his formal qualifications and the positions he had previously held, with references. No, no, said my wife to him, what you need is to boast. You have to make out that your piddling research might be chosen very soon for a Nobel Prize, that your occasional good deeds were as at great a personal sacrifice as those of Mother Teresa, and that you are a person whose outside interests are carried out at levels equal to the professional; in other words that you are multitalented, multivalent, and quite out of the ordinary. Moreover, your ambition must be to save the world, to be a pioneer and a path-breaker, not merely to do your best in the circumstances. You must be grandiose, not modest.
Of course, every other applicant would be similarly boastful, and so, like star architects trying to outdo each other in the outlandish nature of their buildings, my friend’s boasts had to be preposterous, quite out of keeping with his admirable character. But once he had swallowed the bitter pill of realism, he was appointed at once. We all have to be Barons Munchausen now.
Theodore Dalrymple, “The Merits of Nepotism and Boasting”, Taki’s Magazine, 2018-12-08.
December 25, 2018
The Worst Christmas Jobs In History (Christmas History Documentary) | Timeline
Timeline – World History Documentaries
Published on 6 Dec 2018Let’s face it, there’s always been plenty of extra work to be done at Christmas time. Be it late night shelf-stacking at your local mall, cramming this year’s must-have items into valuable shop space in an effort to fuel the ‘pile ’em high, sell ’em dear’ festive shopping frenzy, or doing the night shift down the sorting office to help out the postie, it’s a tradition for students, down-at-pocket teenagers and lonely housewives.
But the seasonal labour market hasn’t always been just about earning pin money and having a lark. Back in the olden days, folks had to work their fingers to the bone in some of the worst Christmas jobs in history…
Content licensed from Spire. Any queries, please contact us at: realstories@littledotstudios.com
December 5, 2018
The true lesson to be learned from GM Canada’s economic plight
Andrew Coyne tries to encapsulate the key economic concept that should be taken away from the GM Canada collapse:
Think of it this way. Governments have proven more than ready in the past to pay whatever the auto companies demanded to hold onto threatened jobs. If there were any chance whatsoever of buying the plant’s reprieve, no matter how foolishly or expensively, can there be any doubt they would have? That they did not — apparently GM waved them off — tells you how hopeless the plant’s prospects really are.
Many have recalled that the closure of the Oshawa plant comes less than a decade after the Canadian operations of GM and Chrysler were bailed out with $14 billion in federal and provincial money, $4 billion of which was never recovered. The lesson some have drawn from this is that GM is a devious ingrate, which may be fair comment but is not especially helpful. The real lesson is this: when you try to buy jobs with public money, the jobs last only as long as the money does. In the end, all you will have done is to lure people into taking or staying in jobs that were long since doomed.
Like most of economics, this is wholly alien to popular wisdom. There is a rich vein of commentary to the effect that the laws of economics are effectively optional, something we can resist by force of will: we can either bend to “market forces,” or we can “stand up” to them in some fashion. But in fact the latter option is entirely imaginary, at least in the long run. You can perhaps lure plants and jobs your way at the outset with subsidies and other goodies. But the only assurance they will stay is if it makes economic sense to the company to keep them there.
If not, then all you have won with your subsidy is the right to go on providing more subsidy, which is a fairly accurate description of Canadian automobile policy in recent decades. The workers whose jobs successive governments boasted of creating or saving were effectively hostages; as in all hostage-takings, the payment of ransom only stimulates further demands for ransom. Until one day when the money runs out, and the workers whose jobs were supposedly saved find themselves abandoned. This may be many things, but one thing it is not is compassionate.
November 30, 2018
QotD: A university education is not for everyone
We went through a generation in this country where parents discouraged their children from going into trades, and they said to them, “the only way you will get ahead in life is to stay at school until year 12, go to university.” Year 12 retention rates became the goal, high year 12 retention rates became the goal. Instead of us as a nation recognising there are some people who shouldn’t go to university, and what they should do is at year 10, decide they are going to become a tradesman. They will be just as well off, and from my experience and observation, a great deal better off than many others. I think we have to change that, and it’s a very big challenge because 30 years ago, we started getting this foolish bind that everybody had to go to university. Everybody doesn’t have to go to university, and a lot of people will be a lot better off if they don’t go to university and they recognise that at age 15 or 16, and go down the technical stream.
John Howard, interviewed by Mark Riley, 2005-03-06.
November 21, 2018
QotD: Occupations and sex differences
Sex differences are a distribution, not a hard, bright line. For example, the women’s world record in the hundred-meter dash is slower than the U.S. high school boys’ record. Men on average are faster than women. But the women at the top of the distribution — those Olympians — are still faster than most men. It would be absurd to say that a woman can’t run the hundred meter in 11 seconds, just because most women can’t. It would be equally absurd to say that men are not, on average, faster than women.
So it’s possible that the distribution of nurturing traits is skewed enough that fewer men will be good at the difficult and emotionally taxing job of providing intimate care for sick and needy people. While there are plenty of health care jobs that don’t require so much direct human interaction, they tend to require more training. And the ability to sit in a classroom and absorb material from a textbook is also a human trait that is unevenly and unfairly distributed. It’s not that no men can succeed in transitioning from old-style “manly” jobs to the pink-collar professions, but that fewer men may be able to do so than we’d like to think.
Megan McArdle, “Some Blue-Collar Workers Probably Shouldn’t Do Pink Jobs”, Bloomberg View, 2017-01-06.
November 1, 2018
The Living Wage Makes It Harder to Make a Living
Foundation for Economic Education
Published on 11 Oct 2018We take big risks with people’s livelihoods when we make demand about what people should be paid. The reality is, people don’t necessarily need a “living wage” to make a living.
October 29, 2018
The $15 Minimum Wage Is Turning Hard Workers Into Black Market Lawbreakers
ReasonTV
Published on 11 Oct 2018An in-depth look at New York’s car wash industry, and the real world consequences of politicians interfering with a complex industry they don’t understand.
Reason is the planet’s leading source of news, politics, and culture from a libertarian perspective. Go to reason.com for a point of view you won’t get from legacy media and old left-right opinion magazines.
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On March 4, 2015, a group of union leaders, activists, and elected officials were arrested for blocking traffic during a protest in front of a Vegas Auto Spa, a small car wash in Park Slope, Brooklyn. Chanting “No contract, no peace!” and “Si se puede!,” they had come in support of striking workers, who had walked out demanding a union contract after allegedly being subjected to dismal working conditions.
For David Mertz, the New York City director and a vice president at the Retail, Wholesale and Department Store Union (RWDSU), it was an inspirational moment in an ambitious six-year campaign to unionize the city’s car washes industry.
“These workers were willing to stand out there during one of the coldest winters … literally in decades to fight for their rights and for basic human dignity,” says Mertz, who was also arrested that day. “You have the ability to make change by coming together, and when you do that sometimes you find that you’ve got some friends on your side.”
In the past six years, the car wash industry, which employs low-skilled, mostly immigrant workers, has also been the target of lawsuits for alleged underpayment of wages, including a handful of cases spearheaded by the New York State Attorney General’s office. Working conditions in the industry were also cited as a raison d’être in the successful campaign to raise the state minimum wage to $15 per hour, which takes full effect at New York City car washes in January of 2019.
As Reason chronicled in a feature story in our July 2016 issue, the real world impact of the unionization drive, the lawsuits, and the $15 minimum wage has been mainly to push car washes to automate and to close down.
Two years later, there are more unintended consequences. The $15 minimum wage is fostering a growing black market—workers increasingly have no choice but to ply their trade out of illegal vans parked on the street, because the minimum wage has made it illegal for anyone to hire them at the market rate.
The minimum wage is also cartelizing the industry: Businesses that have chosen to automate are benefiting from the $15 wage floor because outlawing cheap labor makes it harder for new competitors to undercut them on price and service.
As a sequel to the 2016 article, this video takes an in-depth look at the real world consequences that result when politicians interfere with a complex industry they don’t understand, enabled by media coverage that rarely questions the overly simplistic tale of exploited workers in need of protection.
Written, shot, edited, and narrated by Jim Epstein.
October 27, 2018
QotD: The gender pay-gap
If you mean the pay gap that exists between women, anybody with an ounce of statistical sense knows that it is insignificant when it comes to actual equivalent jobs with equivalent requirements. Once you factor in that women are statistically more likely to take time away from their careers for child rearing and factor that in, the pay difference is statistically insignificant. Unless you work in the Obama White House, because fuck you is why.
Men also tend to work more in dangerous or physically demanding jobs by choice, which also pay better. Nobody forces them to go into those fields. Men also get more STEM degrees and women get more LAS degrees. STEM pays better. Nobody is forcing these men to do math, but men and women are different. If you don’t understand why my accounting degree is more valuable that your gender studies degree, you don’t understand basic econ 101 and supply and demand. So yes, I would like fries with that.
If you mean the gender gap in voting between the parties, just about every psychological study ever conducted by somebody not huffing paint understands that women tend to make decisions more emotionally and men tend to make them more logically. I see you reaching for you Sexist Card, but I said tend. This is not always the case, it is simply a trend. If you don’t like it or find that sexist, you can fuck off and die. Men and women are different. Most of us happen to like that. Some men think more emotionally (like pajama boy metrosexual hipster douchebags for example), and some women think more logically (like hot republican warrior babes), but a trend is a trend.
Larry Correia, “Run Forrest Run!”, Monster Hunter Nation, 2014-11-05.
September 26, 2018
The New York Times on the minimum wage question
Jon Miltimore shares the key points of a New York Times editorial on the minimum wage:
The minimum wage is the Jason Vorhees of economics. It just won’t die.
No matter how many jobs the minimum wage destroys, no matter how many times you debunk it, it always comes back to wreak more havoc.
We’ve covered the issues at length at FEE, and quite effectively, if I do say so myself. But I have to admit that one of the greatest takedowns of the minimum wage you’ll ever find comes from an unlikely place: The New York Times.
There are many reasons people and politicians find the minimum wage attractive, of course. But the Times, in an editorial entitled “The Right Minimum Wage: 0.00,” skillfully rebuts each of these reasons in turn.
Noting that the federal minimum wage has been frozen for some six years, the Times admits that it’s no wonder that organized labor is pressuring politicians to increase the federal minimum wage to raise the standard of living for poorer working Americans.
“No wonder. But still a mistake,” the Times explains. “There’s a virtual consensus among economists that the minimum wage is an idea whose time has passed.”
But why has the idea “passed”? Why would raising the minimum wage not help the working poor?
“Raising the minimum wage by a substantial amount would price working poor people out of the job market,” the editors explain.
But wouldn’t the minimum wage increase the purchasing power of low-income Americans? Wouldn’t a meaningful increase allow a single breadwinner to support a family of three and actually be above the official U.S. poverty line?
Ideally, yes. But there are unseen problems, as the editors point out:
There are catches…[A higher minimum wage] would increase employers’ incentives to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.
But if that’s true, why would progressives support such a law? What’s their rationale for supporting a minimum wage if it does more harm than good? Is it sheer political opportunism?
Not necessarily. The Times explains:
A higher minimum would undoubtedly raise the living standard of the majority of low-wage workers who could keep their jobs. That gain, it is argued, would justify the sacrifice of the minority who became unemployable.
There’s just one problem with this logic, the editors say:
The argument isn’t convincing. Those at greatest risk from a higher minimum would be young, poor workers, who already face formidable barriers to getting and keeping jobs. The idea of using a minimum wage to overcome poverty is old, honorable – and fundamentally flawed. It’s time to put this hoary debate behind us, and find a better way to improve the lives of people who work very hard for very little.
