Marginal Revolution University
Published on 25 Oct 2016You may recall from our previous video that to be counted in the official unemployment rate in the U.S., you have to be an adult without a job and have actively looked for work within the past four weeks. That means that if someone has given up looking for a job, even if they want one, they are no longer counted under the official definition.
Does this mean that unemployment is undercounted? In other words, is the unemployment rate in fact higher than is reported?
Some have claimed this to be the case. However, unemployment is a tricky statistic. It’s important to consider that adults without jobs can fall into different categories. Many retirees, for example, are willing to leave retirement and take a job for the right price. If we are counting people that aren’t actively looking for employment, shouldn’t the retirees also be considered unemployed?
The simplest solution to this conundrum is to only count unemployed adults actively seeking work.
But what about discouraged workers — those who are unemployed and have not sought work in the past four weeks, but have sought work in the past year. Should we consider them in our calculations?
There are actually six different unemployment rates measured by the U.S. Bureau of Labor Statistics. The various rates have less and more stringent criteria. The official rate, called U3, falls somewhere in the middle. Another rate, called U4, does include discouraged workers in its calculation. All six rates follow a similar track over time.
So while the official unemployment rate may not be perfect, it does provide us with a good indicator of the state of the labor market and where it’s headed.
February 24, 2018
Is Unemployment Undercounted?
February 10, 2018
Protecting (some) women from their own decisions
Kirio Birks on the Formula One “grid girls”:
Objectification, we are told, is degrading. Why? Because any job that requires employees to be sexually attractive and gazed upon for that reason necessarily dehumanises them. It encourages others to treat them as pretty ‘things’ rather than as autonomous people with their own lives, passions, thoughts, and desires. Or so the thinking goes. ‘Grid Girls’ – models employed by Formula One for promotional purposes – have just discovered that their role is to be discontinued. As Formula One’s managing director of commercial operations explained: “While the practice of employing grid girls has been a staple of Formula 1 Grands Prix for decades, we feel this custom does not resonate with our brand values and clearly is at odds with modern day societal norms.”
But in their hurry to spare Grid Girls the indignity of the male gaze, nobody making this argument seems to have stopped to wonder whether Grid Girls might have an interest in defending what they do. Instead, a collective of ostensibly progressive voices leapt to their defence without bothering to ask the girls themselves if they needed defending at all. In response, Formula One abandoned its Grid Girls so that it can be seen to be moving with the times and hip to contemporary mores. In doing so, Formula One’s executives have implicitly conceded that they have spent too long objectifying women instead of empowering them. They would like it to known that they’d rather see women driving the cars, or as members of the engineering teams, or just about anywhere other than track-side holding a driver’s name-board and looking beautiful.
What baffles me is that a move supposed to empower women came at the expense of other women, and only because a minority of outsiders found Grid Girls inappropriate, problematic, and otherwise an offence against good taste. But even if Grid Girls are being objectified, then – contra the explanation offered above – it’s not at all clear that objectification is wrong in and of itself. It is acceptable to use people as a means to an end – that’s called employment. Grid Girls obviously know that they will be objectified and they make an autonomous, informed decision to take the job anyway. They are not harmed, they are paid for their time and their work, and many of them have come forward to say, with understandable indignation, that they enjoy what they do. Needless to say, this has not impressed those feminists who applauded their redundancies. But surely a woman has a right to be the object of somebody else’s desire if she wants and surely it doesn’t matter if she is being paid for it?
Get me on @thismorning so I can defend us #gridgirls
Because of these feminists, they’ve have cost us our jobs! I have been a grid girl for 8 years and I have Never felt uncomfortable! I love my job, if I didn’t I wouldn’t do it! Noone forces us to do this! This is our choice! pic.twitter.com/PUWcyB5BeG— Lauren-Jade (@laurenjadepope) January 31, 2018
Opponents may suggest that Grid Girls have internalised their own oppression in a society shaped by patriarchal values, but not without making two claims: (1) that Grid Girls are unable to adequately think for themselves because of the society they live in and (2) that thinking for yourself is only evidenced by acknowledging the existence of a patriarchal status quo and resisting it.
February 4, 2018
QotD: Modern feminism
Feminism now regularly calls for women to be treated as eggshells instead of equals. And through this, it does something pernicious to the women it claims to advocate for: Feminism has become a movement for female disempowerment, or what I call “encouraged helplessness” (from psychologist Martin Seligman’s “learned helplessness”—the feeling that there’s nothing you can do to escape your fate).
In fact, feminism, bizarrely, has morphed into paternalism — instructing women that they are fragile, passive, powerless victims who need authority figures to advocate for them.
That’s a movement I want no part of. Or, as I like to put it — because I’m neither a feminist nor much of a lady: Count me the fuck out.
If you’re a woman, I encourage you to join me — count yourself the fuck out of what feminism has become.
This doesn’t require you to be fearless. You just need to shove your fears aside and do what needs to be done — say, getting up on your hind legs and telling some co-worker, “Stop saying that thing to me” or “…treating me this way.”
Now, if they persist after you’ve told them to stop a few times, that’s harassment and you can seek support to get them to stop. But consider that it’s less likely to get to that point if you simply act like men’s equal—act as if you’re powerful — instead of acting like you’re a feminist.
Amy Alkon, “Are Women Really Victims? Four Women Weigh In”, Quillette, 2017-11-22.
February 3, 2018
Arizona’s legally protected blow-drying cartel
Eric Boehm reports on the fantastic lengths protected businesses will go to to protect themselves from “unlicensed” competitors, even in such areas as hair drying:
Brandy Wells never anticipated the amount of vitriolic abuse she would receive over — of all things — her public support of a proposal to let people blow-dry hair without a state-issued license.
“I’ve been called a cunt, a bitch, an ass, trashy, a puppet, a pawn, repugnant,” Wells says. “And my favorite: ‘your logic on deregulation of cosmetology is much like your hair, dull and flat.'”
Wells says she’s received several attacks from cosmetologists on social media accusing her of being “uneducated” or “clueless” about cosmetology because she doesn’t work in the industry. It’s true that Wells isn’t a licensed cosmetologist (though she does, in fact, know how to use a blow-dryer, she confirmed to Reason), but that’s actually the precise reason why she’s speaking up.
Wells serves as the lone “public member” of the Arizona State Board of Cosmetology. That means she is the only member of the seven-person board who does not work in some capacity as a cosmetologist or with a connection to a cosmetology school. Last month, she voiced her support for House Bill 2011, which would removing blow-drying from the state’s cosmetology licensing requirements. Under current law, using a blow-dryer on someone else’s hair, for money, requires more than 1,000 hours of training and an expensive state-issued license. Blow-drying hair without a license could — incredibly — land you in jail for up to six months.
In response, Wells says, members of the cosmetology profession have sent messages to her employer, the Arizona Chamber of Commerce, suggesting that she should be fired — fired because she thinks people can safely blow-dry hair without 1,000 hours of training!
The cosmetology board is “a group of special interest bullies,” said Arizona Gov. Doug Ducey, a Republican, in his recent State of the State address. The board, Ducey said, “is going after people who simply want to make a living blow-drying hair. No scissors involved.”
This week, the fight over the so-called “blow-dry bill” spilled into the state legislature. The state House Military, Veterans, and Regulatory Affairs Committee held its first hearing on the bill, and licensed cosmetologists packed the room to speak one-by-one about the potential dangers of letting unlicensed professionals blow-dry hair
January 31, 2018
Tyler Cowen: The Economics of Choosing the Right Career
Marginal Revolution University
Published on 11 Oct 2016As many who entered the labor market following the Great Recession know all too well, graduating with a college degree does not mean you’ll easily fall into a good career. Four-year college graduates with entry-level jobs actually earned more in 2000 than they’re earning today and student loan debt burdens are higher than ever.
Does this mean you should skip college or drop-out? Not necessarily. Unemployment is still lower for those with undergraduate and higher degrees. However, understanding the economics behind the labor market will make finding a career a more manageable task.
The labor market in the United States has undergone many changes in the past few decades. Whereas we once had many manufacturing jobs that required little training or specialized skills, the labor market today demands more people who can work with computers and information technology.
Choosing a good career requires planning beyond getting a college education. You’ll want to carefully consider the career options available for your major, as well any specialized skills you’ll need to build outside of the classroom.
It’s also essential to understand how supply and demand affect your career options. How many people are also choosing that major vs. how many employers are looking for those skills? Is a particular career path susceptible to being replaced by a machine? What about outsourcing in the global labor market? What about laws and regulation – does it require an occupational license?
There’s a lot to think about! Choosing a career is a huge decision and understanding how supply and demand rule the labor market will help you better navigate your future.
January 23, 2018
The unintended consequences of Ontario’s steep minimum wage hike
Colby Cosh on the unpredictable outcomes of Ontario’s recent minimum wage increase:
In Thursday’s edition of this paper, Marni Soupcoff wrote an entertaining column about how Ontario’s fairly aggressive minimum wage increase had suddenly raised the costs of labour-intensive goods and services for consumers — the ones, that is, who don’t benefit themselves from a minimum wage increase. Child care, which is a very pure purchase of labour, is the example that is being exasperatedly discussed this week. The headline did not have “duh” in it, but that was the spirit of the thing.
Soupcoff pointed out that this not only could have been foreseen; an explicit warning of it was given in the pages of the Toronto Star, by the paper’s social justice reporter Laurie Monsebraaten. Our Financial Post section could perhaps easily be called the Social Injustice Gazette, but anyone at FP who got such an early jump on an economics story would be rightly pleased with himself.
Soupcoff’s major point was that the broad-sense law of supply and demand is not some plutocratic swindle devised by the Monopoly Man and his fatcat pals; even believers in “social justice” have to take it into account, as they take gravity into account when they are moving an old couch to a charity shop or sending cosmonauts into orbit. This is obviously right as far as it goes, but the words “supply and demand” are not enough, on their own, to predict the precise market response to a change in a price control — which is what the minimum wage is.
That, perhaps, is the true key point amidst all the various ideological struggles currently in progress over minimum wage levels, which are being yoinked upward in Alberta as well as in Ontario. A minimum wage is a price control. The minimum wage is not really so much a labour standard as it is the abolition of labour bargains that feature a nominal wage below the minimum. And price controls are a blunt instrument. Most economists, whatever their political orientation, instinctively resist them.
The incidence of a price control — the precise place upon which the economic burden of it falls — is not, in fact, foreseeable without other information. In the market for hired child care, for example, it could turn out, with time, that the real effect of increasing a minimum wage is that some parents drop out of the labour market and tend to their own children. It’s just not what one would actually predict, because the need for professional child care is something that a family tends to plan for well in advance, with a longer time horizon than any government’s. (Also, we haven’t invented dependable babysitting robots yet.)
Women, in particular, organize lives and careers around whether they expect their own labour force participation to be able to cover care expenses. Indeed, couples adjust family size for these expectations. We can even imagine circumstances in which a province’s extreme, credible commitment to a very high future minimum wage influenced birth rates.
January 13, 2018
QotD: Occupational licensing
When my mother retired from selling real estate, she toyed with the idea that she — a talented cook who had long made her own croissants — might make a little money on the side by selling homemade baked goods. It’s the sort of business that people have started from time immemorial, letting them share what they love with someone willing to pay for it.
A quick investigation, however, revealed that the thing was impossible. You can’t just bake a little stuff at home and sell it, for fear that you might poison people. If you want to poison people with your deliciously flaky homemade croissants, it must be done on a strictly ad-hoc, volunteer basis.
Welcome to the modern economy, where increasingly, everything not compulsory is forbidden. We are hedged around with rules to protect us, to protect other people, to protect some theoretical victim who exists only in the minds of regulators and judges. And there’s reason to worry that this red tape is getting wrapped so tight that it risks rendering us immobile.
I’m not talking about environmental regulations, or even the labor regulations that make it increasingly expensive and burdensome to employ people. Today I’m talking about occupational licensing, and the burden it places on people who want to build a career.
Megan McArdle, “You’re Gonna Need a License for That”, Bloomberg View, 2016-05-17.
December 29, 2017
2017 wasn’t all doom and gloom and Trump tweet wars
Veronique de Rugy manages to find three things that 2017 produced that somehow didn’t kill millions of Americans (so far, as far as we know):
First, President Donald Trump just signed a historic reduction in the corporate income tax rate, from 35 percent — the highest of all industrialized nations — to 21 percent. And except for a one-time repatriation tax, the U.S. will no longer tax most profits made by businesses overseas.
Both changes should boost economic growth and American workers’ wages. Moreover, the reform removes many of the distortions that discourage companies from investing foreign-earned income in the United States and prompt them to use tax avoidance techniques.
Second, this was a very good year for deregulation. Cutting taxes isn’t the only way to boost growth and raise wages; innovation may matter even more. Getting rid of duplicative and outdated regulatory hurdles to innovation promises to have a real impact on our lives. That’s what the Trump administration, with the help of Congress, seems committed to doing.
When the president first got to the White House, for example, he froze many not-yet-implemented Obama-era regulations. These include the punishing overtime pay regulation, which would have increased the cost of employing workers and ultimately reduced their base compensation to offset the increase in overtime pay.
[…]
Last but not least are the sustained efforts by Sens. Pat Toomey, R-Pa., and Richard Shelby, R-Ala., to slow down the process that would restore the Export-Import Bank, a bastion of cronyism, to its full and former glory.
Appointing enough board members to give Ex-Im a full quorum would instantly restore the agency’s ability to sign off on deals above $10 million for the benefit of a handful of very large foreign and domestic corporations. By resisting, the two senators are fighting a lonely fight on behalf of the unseen victims of corporate welfare.
December 19, 2017
The imminent threat of Neo-Victorianism
Megan McArdle on the moral panic currently gripping modern American public life:
The same logic applies to the burdens of proof. If unsubstantiated claims are accepted at face value, then eventually enough will turn out to be false that many future claims will be disregarded — whether they are plausible or not, whether they are substantiated or not. That was the harm done by cases like the Duke Lacrosse scandal, the UVA rape case, the Tawana Brawley accusations, and many others. But there’s another potential harm we also have to think about.
Let’s say that we do manage to establish a social norm that a single accusation of “inappropriate sexual behavior” toward a woman is enough to get you fired and drummed out of your industry. It’s the crux of the issue so eloquently explored recently by Claire Berlinski: What would a reasonable and innocent heterosexual man do to protect himself from the economic death penalty?
One thing he might do is avoid being alone with anyone of the opposite sex — not in the office and not even in social situations. You might, in other words, adopt something like the Pence Rule, so recently mocked for its Victorian overtones. (Or worse still, work hard not to hire any women who could become a liability.)
This would obviously be bad for women, who would lose countless opportunities for learning, advancement, friendship, even romance — the human connections that make us human workers superior to robots, for now.
On the radio recently, I pointed out that this might be a logical result of a “one strike and you’re out” policy. The host, aghast, remarked that this was obviously not what we wanted. And of course, that isn’t what anyone wants. It might nonetheless be the logical result of the rules we’re setting up.
It’s easy for me to think of all the things I would have lost out on under a strict Pence Rule. The creative writing professor who conducted my independent study in his house, for example. It was perhaps a more innocent time, but even then I was not unaware of the sexual overtones our culture would see in a young female student going to a much older male professor’s home while his wife was at work. He was a perfect gentleman who made me cabbage soup, taught me to insert little slivers of garlic into a beef roast, and savagely critiqued my prose. David Slavitt, wherever you are, thank you for making me a better writer. And my condolences to all the female students today who will never have similar opportunities — if I may judge by the bemusement/horror of male professors to whom I have told this story.
December 18, 2017
QotD: The perils of well-meaning regulation
Because the rich and powerful run the government, the poor and other powerless have been regularly hurt by governmental regulation – even by such sweet-sounding regulations as evening closing of shops (making it hard for the working poor to have time to shop) or protections limiting the hours women could work (making it hard for them to hold supervisory jobs requiring one to come early and stay late) or building codes claiming to promote safety but instigated by building trade unions (making it hard to build inexpensive housing) or minimum wages (making it hard for blacks, immigrants, women, and nonmembers of craft unions to get paying jobs).
Dierdre McCloskey, Bourgeois Equality, 2016.
December 16, 2017
QotD: Ending the risk of sexual assault in the workplace
As an economist I always try to find the simplest, cheapest, and most effective solutions to society’s problems. However, whereas mere mediocre economists talk about multi-factor productivity, education, etc., the reason I’m one of the best economists is because I do something most others don’t.
I think outside the box.
And so, just like I was (in theory) able to prevent the Dotcom Bubble, the Asian Currency Crisis, the Housing Bubble, Education Bubble, and Retirement Bubble, I have found a way to bring the epidemic of sexual harassment and sexual assault to a screeching halt, and at practically no expense to America.
Force men to work from home.
It seems to me that “boys are just going to be boys” and while I know feminists, academians, HR departments, CSR departments, and non-profits are doing their best to eliminate toxic masculinity and bring out the more feminine side of men, until that noble goal is achieved, it may be best to avail ourselves of already available technology and require that men only work from home.
This will bring about a lot of benefits to society that go well beyond ending work place sexual harassment and assault. Women won’t be bothered by men at the office or in the downtown eateries come lunch time. They will not be harassed, allowing for much safer work place environments. An all-women workplace environment will FINALLY come to fruition allowing them the chance to excel that was traditionally the preserve of men. Plus, the highways won’t be as crowded come the morning and evening commutes. One might even say this would force men to be the house husbands, forcing them to see what it was like to be oppressed as a stay at home mom.
Captain Capitalism, “End Sexual Assault by Forcing Men to Work from Home”, Captain Capitalism, 2017-11-13.
December 13, 2017
QotD: Licensing and entrepreneurship
Much as I love Silicon Valley, its cultural dominance has disastrously corrupted our sense of what entrepreneurship is. Talking about starting your own business, and too many people think the measure of success is whether you can sell the thing for at least a couple of hundred million dollars. Most entrepreneurship is considerably more humble than that; it is individuals with some talent, or a willingness to work hard, who want to sell their services to the public. They may never employ another person; they may not even work full time themselves. And these people never buy gracious mansions, or endow scholarships, or get buildings named after them. They just make their own lives a little bit better, hopefully, in the process of doing the same for their customers. We are artificially stopping that process, in order to protect insiders who already have the job.
That’s great for the insiders, who get above-average job stability and wages. But it’s terrible for the folks who are outside. And the more industries we put under the control of such regimes, the more the outsiders will show up in our economic data as people permanently stuck at the bottom.
We can do better than that. The problem is that such regimes are politically very stable, because the benefits are highly concentrated, while the costs are diffuse. Every licensed interior designer is passionately interested in shutting out unlicensed competitors, but their potential customers probably have better things to do than phone up their senators to demand to know why they can’t hire this chap they just met who has absolutely splendid taste in early Chippendale.
Megan McArdle, “You’re Gonna Need a License for That”, Bloomberg View, 2016-05-17.
December 11, 2017
QotD: Occupational licensing
… occupational licensing laws and Competitor’s Veto laws exclude would-be entrepreneurs from the marketplace — with disproportionately negative consequences for members of minority groups — […] Congress could act today to protect the fundamental human right of economic liberty against unjust state interference.
Licensing laws tend to have particularly harsh consequences on members of minority groups for a couple reasons. First, if a law requires a person to have, say, a college degree to practice the trade of interior design (which is the law in Florida), people who have less money and time to spend in college will find that avenue of opportunity closed to them. Since black and Hispanic Floridians are about 30 percent less likely to have a college degree, they will suffer more from this absurd licensing requirement than others will. Competitor’s Veto laws that forbid a person from practicing a trade unless they get permission from the businesses already operating in that industry are also very likely to create a sort of Old Boys Network, and to exclude entrepreneurs who lack political connections. Second, in a more general sense, any law that restricts economic opportunity for some to benefit others — as licensing laws tend to do — are likely to benefit those who have more political influence and can therefore get the government to regulate in ways favorable to them. Since members of minority groups have less political influence, they tend to be the ones excluded.
Timothy Sandefur, “Testifying to the U.S. Senate Oversight Subcommittee Tuesday about economic liberty and minorities”, Freespace, 2015-09-30.
November 30, 2017
“[W]henever I visit a newsroom these days, I instinctively feel unhealthy, like a 19th-century Lake Poet visiting an especially polluted part of London”
Colby Cosh goes well out of his way to rub salt in the wounds of daily commuters, while basking in the glories of working from home:
When Statistics Canada puts its big brains to work on measuring the time devoted to commuting, and the various ways in which people drag their butts to work, I always read the results with the particular interest-fascination-horror of a permanent non-commuter. I am well into my second decade of working full-time, pretty much exclusively, from home. I’m dragged out of the house very occasionally for assignments and broadcast appearances, but most of what I do for a living happens a few feet from my bed.
None of it, I should specify, actually happens in bed (and relatively little of it involves actual writing). As most people who have to physically travel to a job seem to suspect, working remotely gives you a scary, even nauseating freedom to customize your working arrangements. I suppose most of us professional shut-ins find that we have to establish arbitrary rules and mini-disciplines to prevent our lives from becoming totally unstructured and unhealthy. “Bed is for sleep” is one of mine.
All of my conscious writing and research is done strictly at a desk, whether or not I happen to be wearing pants. With that said, as I get older, I do find sleep to be a more important component of my overall work process. Naps can be magical, and the ability to get around a writing difficulty by means of one is something I would immediately miss if I became a miserable corporate prisoner/drone again.
This kind of consideration deepens the psychic divide between commuters and remote workers: we have trouble understanding one another’s worlds even when we have switched between them. Commuters shudder at the thought of an amorphous life with less social contact and minimal formal barriers between work and non-work. Indeed, I think working at home does make one a little dottier (note: this is not necessarily a practical disadvantage for a newspaper columnist). I suspect it may also discourage groupthink. It definitely cuts down on pointless meetings; and whenever I visit a newsroom these days, I instinctively feel unhealthy, like a 19th-century Lake Poet visiting an especially polluted part of London.
I’ve spent more of my time working from home over the last decade than sitting in the office (and therefore also needing to drag my carcass to and from said office), and I really do understand his viewpoint. It’s one of the things I anticipate with no joy at all, as any new job I’m likely to land will probably require a daily commute. On a good day, it’s about an hour’s drive to downtown Toronto, but there aren’t enough good travel days and taking public transit literally doubles that time. Spending four hours per day to get to work and back feels very wasteful, even when I can get in some reading on the way.
November 20, 2017
QotD: The surprise of motherhood to high-achieving women
Motherhood surprises women these days. Not the fact of motherhood. Many women meticulously plan their pregnancies. Certainly, women of advanced education plan childbearing, occasionally to a fault.
The fact of motherhood does not shock, but the day-to-day of motherhood and the intensity of motherhood do. As a culture we condition women to believe that having a baby is just a biological function and they will go back to their previous lives, albeit with babes in tow, after a few weeks of recovery.
[Insert gentle, hysterical, or bitter laughter from experienced moms here.]
Trained to be doctors and lawyers and such, today’s young educated women did not typically care for babies when they were growing up. College bound, they had better things to do than babysit babies and their mothers had visions of them doing “more” and wouldn’t dream of expecting their child to care for other children. Even now, many of the mothers I know — I’m in the highly educated and metropolitan set — think that expecting older siblings to care for younger ones is some combination of dangerous and unfair. And watching a young girl play with babies is almost pitiable.
In this domestic discouragement, we lay the foundation for the common motherhood shock. Unaware of even what should be the known knowns of motherhood, newly expecting moms tend to read books about pregnancy and childbirth. It is presently happening to their bodies and book learning comes easily to the modern woman. It’s how we made all those good grades and have out-enrolled men in higher education, after all.
Leslie Loftis, “High-Achieving Women Find They’re Not Prepared for Motherhood”, PJ Media, 2016-03-31.
