Quotulatiousness

September 28, 2012

Defending the welfare state … badly

Filed under: Bureaucracy, Europe, Government — Tags: , , , , — Nicholas @ 08:27

At sp!ked, David Clements reviews a new book by Asbjorn Wahl which inadvertently exposes some of the very real problems of the modern welfare state in the process of praising and defending it:

Asbjorn Wahl is a trade unionist, director of the Campaign for the Welfare State and Norwegian. While you shouldn’t judge a book by the biog of its author, far less his nationality, it is fair to say that when I opened his new book, The Rise and Fall of the Welfare State, I wasn’t expecting much.

He begins, as all defenders of the welfare state must, with a bleak account of the public; that is, of the welfare state’s helpless, vulnerable clients and potential clients. There is a ‘feeling of powerlessness and apathy among people’, says Wahl, a feeling of ‘tragic stories’ too numerous to mention. As well as discovering an ‘unexpectedly large number… of victims of workfare’, he finds other people suffering ‘bad health and ever-more demanding work’. He tells us ‘stories of people who struggle with their health, then their self-confidence and their self-image’. As I heard a man on a picket line tell a Sky News reporter recently, everyone is ‘sick and tired of being sick and tired’.

[. . .]

Wahl is critical of both the anti-democratic tendencies of the European Union and the imposition of the ‘economic straitjacket’ resulting from the attack on living standards in the Eurozone periphery countries. But his call for the ‘stimulation of the economy, investment in infrastructure and in productive activities’ can hardly be taken seriously given his doubts about the benefits of economic growth. While attempts by Europe’s governments to counter the financial crisis, and in so doing to create public debt crises, have, as Wahl says, been ‘exploited as an excuse to make massive, intensified attacks on the welfare state’, this does not in itself invalidate the attack. His view that capitalist excess is responsible for all of Europe’s ills is also his blind spot when it comes to seeing the damage done by an increasingly therapeutic welfarism. In truth, the welfare problem is not something dreamt up by neoliberals (whoever they are). Rather, it is symptomatic of a political culture that robs people of their agency, something that you might expect somebody like Wahl to be opposed to. Far from it. ‘Good social security’, he says, ‘gives people that much-needed self-confidence boost that enables them to become active players in society’.

As this back-to-front and patronising rationale makes clear, today’s welfare state infantilises people. It tells them that they are too damaged to function without its official hand-holding and belittling interventions. Any ‘progressive’ movement would surely endorse the contrary view that people should be treated as morally independent beings, responsible for their own actions? But to say as much is to invite the charge that you are horribly right wing and endorse ‘welfare-to-work’ policies (which, incidentally, sound rather more like the unforgiving and austere welfare state envisioned by its founders than that proposed by its supposed critics).

September 26, 2012

Virginia Postrel on the faulty notion of “secure jobs”

Filed under: Economics, Education, USA — Tags: , — Nicholas @ 11:24

Along with proving that no American politician ever deliberately angers the “middle class” (because literally 89% of Americans consider themselves to be middle class), Virginia Postrel points out the impossibility of creating “secure jobs”:

Imagine a career in which once you had worked somewhere for a long time — say, seven years — and you couldn’t be fired unless you did something really horrible. To make the picture even more appealing, imagine further that your industry was largely immune from foreign competition, had been enjoying increasing consumer demand, was subsidized by the state and federal governments, and rarely experienced any bankruptcies.

As you have probably realized, this career exists. It’s the professoriate. But while outsiders imagine higher education as a sheltered enclave of secure jobs, the actual state of American faculty members is much more uncertain. Tenure-track employment is no longer the norm. Part-time work is.

About 30 percent of faculty members are either tenured or on the tenure track, compared with about 57 percent in 1975. The rest are “contingent faculty”: About 19 percent work full time, usually on contracts lasting one to three years, and more than half work part time. (These figures omit graduate students who also teach classes.) Along with a lack of job security, contingent faculty members receive lower pay and fewer, or no, benefits. They frequently don’t have offices and may not even get library cards.

It’s a two-tiered system that depends heavily on people whose main jobs are doing something else. And it is what you get when you guarantee permanent employment but need flexibility as conditions change. How well it works for academia depends on whom you ask. But it certainly doesn’t deliver secure jobs.

September 5, 2012

Nobody is getting to “have it all”

Filed under: Economics, Media, USA — Tags: , , , , , — Nicholas @ 00:04

I read Gregg Easterbrook’s NFL column partly for the football content and partly for the very-much-not-football stuff. Here’s an example from this week’s column where he reflects on the “having it all” meme:

Lately The Atlantic has been on the case of après-feminism. Hanna Rosin’s 2010 cover story showed how the double-XX cohort is taking over colleges and offices, positing trends in education and economics are such that “modern postindustrial society is simply better suited to women.” Those sci-fi stories set on worlds ruled by Amazonian females, where males exist solely for women’s amusement? Rosin sees this coming.

Then in 2011, an Atlantic cover had Kate Bolick declaring that men are already so inutile, a woman would be a fool to walk down the aisle. Her ideal evening: a romantic candlelit dinner for one. Bolick praised “the Mosuo people of southwest China, who eschew marriage and visit their lovers under cover of night.” That cheerful article ended by endorsing the Beguines, a Dutch order whose members live in secular chastity, vowing never to touch men.

Then this year came “Why Women Still Can’t Have It All,” a cover by Anne-Marie Slaughter, a Princeton dean and recent State Department official. Slaughter filled 14 magazine pages with angst about how despite a high-paying super-elite job with lifetime tenure, personal connections in the White House and a husband who does the child care, despite writing about herself for the cover of the world’s most important magazine, nevertheless she feels troubled that every moment of her days is not precisely what she wants.

The assertion that women “can’t have it all” was received as earthshaking by the commentariate, a magazine article making the front page of The New York Times. Living a favored life and yet looking for something to complain about is part of the Upper West Side mindset, so perhaps the Slaughter article appealed to the part of the Times demographic that searches desperately for new complaints.

Some of Slaughter’s points were solid, but they were the grievances of the 1 percent — 99 of 100 women would love to have what Slaughter presented as her burdens to bear. Nobody’s ever satisfied. Jacques Brel wrote, “Sons of the thief, sons of the saint/Where is the child without complaint?”

What was vexing was that the article seemed to misunderstand its own topic. The phrase “having it all” meant a woman could pursue a career and also be a good mother. This is something millions of women have now achieved, proving career and motherhood are not mutually exclusive, as men long claimed in order to keep women out of the workplace. But “all” never meant a woman could have everything she wants at every second without ever facing hard choices or bending over to pick up a piece of laundry. Men can’t “have it all” in that sense either. No one has ever “had it all” and no one ever will.

The Atlantic‘s female readers have been told they finally hold the upper hand, but this seems hollow victory if men become motes. They’ve been told marriage is so awful, get thee to a nunnery. And Atlantic‘s female readers have been told if they achieve tremendous career success under ideal conditions while miraculously finding the last desirable man on planet Earth, they will be riven with anxiety anyway. But hey, have a nice day!

September 2, 2012

Institutionalizing income inequality

Filed under: Business, Cancon, Government — Tags: , — Nicholas @ 11:07

At the Worthwhile Canadian Initiative blog, Frances Woolley explains how a couple of data points will work to “bake in” income inequality:

If these are the rules used to determine wages, income inequality will prevail.

It’s impossible for all firms to pay their CEOs above the median salary — by definition, half of executives must be paid below the median. If the majority of firms adopt a compensation policy like the Bell Canada Enterprises one quoted above, CEO salaries will increase inexorably.

At the same time, allowing firms to bring in temporary workers at less than the prevailing market wage prevents the price of labour from being bid up in response to labour shortages, dampening salary growth for workers at the lower wage end of the labour market.

Inequality rules.

August 26, 2012

Google investigates their own in-house Gender Gap

Filed under: Business, Economics, Technology, USA — Tags: , , , — Nicholas @ 00:02

Tim Worstall in Forbes on Google’s unique approach to narrowing the Gender Gap:

As we all know, because we’re reminded about it often enough in rather shrill voices, the gender gap is one of the more pernicious unfairnesses in our society. This idea that women only earn 77 cents to a $1 for men, don’t get the same promotions, are in fact discriminated against by society.

The thing is, the more people study this question the less and less it’s possible to see that there is in fact a gender gap. Or rather, a gender gap driven by discrimination. Do note that economists discriminate (sorry) between taste discrimination and rational discrimination. Taste discrimination would be where women were treated worse than men just because they are women. Akin to say the dreadful racism of the past: and we would all admit that there was indeed discrimination against women in the workplace in the past.

What is a great deal less certain is whether this taste discrimination still exists: of course, we’ll always be able to find examples of it, but does it exist in a general sense, across the economy? Many researchers think not: for when you add up the effects of rational discrimination then look at the gender gap there doesn’t seem to be much if any room left for that taste discrimination. Rational discrimination is things like, well, women and men do tend to self-segregate into different occupations. Some of which are higher paid than others. Men tend to be willing to take riskier jobs and thus earn a danger premium to their wages. Women tend to negotiate less hard for their wages or a promotion. And of course women do tend to be those who take career breaks to have and to raise children. Perhaps this shouldn’t be so but it is and it’s most certainly true that the largest contributor to the gender pay gap is not gender itself but the effects of motherhood.

This is all pretty well known in the academic literature. What Google has done is most unfair. It has entirely ignored the academic work, ignored the partisans of both sides, and actually gone and asked its own staff what’s going on.

August 12, 2012

The (long awaited) growth in Indian manufacturing

Filed under: Business, Germany, History, India, Technology — Tags: , , , , , — Nicholas @ 08:59

The Economist on the relatively slow development of India’s manufacturing sector:

If India is to become “the next China” — a manufacturing powerhouse — it is taking its time about it. “We have to industrialise India, and as rapidly as possible,” said the country’s first prime minister, Jawaharlal Nehru, in 1951. Politicians have tried everything since, including Soviet-style planning. But India seems to prefer growing crops and selling services to making things you can drop on your foot.

Manufacturing is still just 15% of output (see chart), far below Asian norms. India needs a big manufacturing base. No major country has grown rich without one and nothing else is likely to absorb the labour of the 250m youngsters set to reach working age in the next 15 years. But it can seem a remote prospect. In July power cuts plunged an area in which over 600m people live into darkness, reminding investors that India’s infrastructure is not wholly reliable. And workers boiled over at a car factory run by Maruti Suzuki. Almost 100 people were injured and the plant was torched. The charred body of a human-resources chief was found in the ashes.

Yet not all is farce and tragedy. Take Pune in west India, a booming industrial hub that has won the steely hearts of Germany’s car firms. Inside a $700m Volkswagen plant on the city’s outskirts, laser-wielding robots test car frames’ dimensions and a giant conveyor belt slips by, with sprung-wood surfaces to protect workers’ knees. It is “probably the cheapest factory we have worldwide”, says John Chacko, VW’s boss in India. In time it could become an export hub. Nearby, in the distance it takes a Polo to get to 60mph, is a plant owned by Mercedes-Benz.

The initial demand for a domestic manufacturing base was more political than economic: it would serve to reinforce the newly won independence of India by showing that India could make its own goods rather than importing from the UK or other major manufacturing nations. It was also economic, in that it would provide relatively high-paying jobs for India’s rapidly urbanizing population.

Ironically, now that the manufacturing sector seems to be on the upswing, the one thing it isn’t going to do for India is provide lots and lots of jobs: as with the rest of the world, manufacturing “things” is being done with fewer workers every year (even when the total output increases, fewer workers are needed to produce that output).

July 17, 2012

FATCA “may end up killing more U.S. jobs than all the call centers in India combined”

Filed under: Economics, Government, Law, USA — Tags: , , , , — Nicholas @ 09:52

Matt Welch on the worst bit of legislation for US workers so far:

That’s a line from this commendable Wall Street Journal column by William McGurn about the oft-lamented-around-these-parts Foreign Account Tax Compliant Act of 2010, or FATCA (rimshot). While President Barack Obama keeps hitting presumptive Republican presidential nominee Mitt Romney over offshoring and jobs, one of Obama’s most economically deleterious laws continues inflicting damage largely off the journalistic radar screen.

“Within the United States,” McGurn writes, “almost no American has heard of it. Save for the occasional article, it’s gone largely uncovered. And just like ObamaCare, the nastiest, job-killing aspects will not hit until after this November’s election.”

McGurn points out that FATCA was the revenue-generating side of the Hiring Incentives to Restore Employment Act of 2010 (HIRE! God, I hate these people….) — “a jobs bill dominated by tax breaks designed to get businesses to hire unemployed Americans.” So once again, government is “paying” for the economically dubious and morally spurious act of granting targeted tax breaks to favored corporations by screwing over the middle class.

July 9, 2012

US recovery from the recession still more theory than reality

Filed under: Economics, USA — Tags: , — Nicholas @ 07:54

Greg Mankiw has a graphical refutation of any claim that the United States has actually seen any recovery from the Great Recession of 2008:

At best, you’d have to call that a “stabilization”, but not a “recovery”.

July 4, 2012

US military pay has more than kept up with civilian payscales

Filed under: Economics, Government, Military — Tags: — Nicholas @ 00:07

Mike Riggs has the details:

In other words, it’s not *just* teachers, cops, firefighters, and the bulk of civil federal employees who are riding high on the hog. Tom Philpott at Military.com reports:

    As private sector salaries flattened over the last decade, military pay climbed steadily, enough so that by 2009 pay and allowances for enlisted members exceeded the pay of 90 percent of private sector workers of similar age and education level.

    That’s one of the more significant findings of the 11th Quadrennial Review of Military Compensation report released last week, given its potential to impact compensation decisions by the Department of Defense and Congress as they struggle to control military personnel costs.

Unlike previous generations, for whom military pay was almost a joke compared to civilian payroll, modern western military pay has been catching up to (or even exceeding) equivalent civilian jobs. When I joined the reserves in the mid-1970’s, the pay was actually quite good: better than minimum wage — the drawback was that the Canadian Forces’ budget was so tight that we were strictly limited to the number of paid training days. While that was a drawback for enlisted troops, it was worse for our senior NCOs and officers: they were working without pay for months at a time.

June 26, 2012

Railway engineering, 1947 style

Filed under: Britain, History, Railways, Technology — Tags: , , — Nicholas @ 00:03

London, Midland & Scottish Railway documentary that shows the relaying of St. Pancras Junction with prefabricated trackwork, along with the associated changes to the signalling system.

What struck me while watching this was the ages of most of the track crew: I’d have expected them to be a bunch of teens-to-early 20’s guys, but there are a lot of old gaffers still doing the heavy lifting here. Oh, and of course the work clothes: caps, hats, jackets, and braces. Not a hard hat or much in the way of obvious safety gear in sight. They may or may not have been better men in those days, but they earned their aches and pains honestly.

H/T to Roger Henry for the link, who pointed out “This will get your pulses racing. Also makes you realize that working on the railroad was for real men. Mechanisation has come a looong way since then.”.

June 5, 2012

That problematic statistic: the gender wage gap

Filed under: Economics, Politics, USA — Tags: , , , , — Nicholas @ 11:57

The Washington Post on President Obama’s claim that women only earn 70 cents to each dollar earned by men (later “corrected” to 77 cents):

We were struck by the disparities in the data when we noticed that a news release by Sen. Barbara Mikulski (D-Md.) trumpeted the 77 cent figure, but it included a link to a state-by-state breakdown that gave a different overall figure: 81 cents.

What’s the difference? The 77 cent figure comes from a Census Bureau report, which is based on annual wages. The BLS numbers draw on data that are based on weekly wages. Annual wages is a broader measure — it can include bonuses, retirement pensions, investment income and the like — but it also means that school teachers, who may not work over the summer, would end up with a lower annual wage.

In other words, since women in general work fewer hours than men in a year, the statistics may be less reliable for examining the key focus of the legislation — wage discrimination. Weekly wages is more of an apples-to-apples comparison, but as mentioned, it does not include as many income categories,

The gap is even smaller when you look at hourly wages — it is 86 cents vs. 100 (see Table 9) — but then not every wage earner is paid on an hourly basis, so that statistic excludes salaried workers. But, under this metric for people with a college degree, there is virtually no pay gap at all.

There are so many different ways of slicing the data that you can “prove” almost any proposition. President Obama also claimed that African American women and Hispanic women’s wages are even worse: “64 cents on the dollar for African American women and 56 cents for Hispanic women.”

Not only did the White House pick the statistic that makes the wage gap look the worst, but then officials further tweaked the numbers to make the situation for African Americans and Hispanics look even more dire.

The BLS, for instance, says the pay gap is relatively small for black and Hispanic women (94 cents and 91 cents, respectively) but the numbers used by the White House compare their wages against the wages of white men. Black and Hispanic men generally earn less than white men, so the White House comparison makes the pay gap even larger, even though the factors for that gap between minority women and white men may have little to do with gender.

May 9, 2012

Stephen Gordon explains that Dutch Disease is merely “economic hypochondria”

Filed under: Cancon, Economics — Tags: , , , — Nicholas @ 09:17

Politicians and newspaper columnists have a fetish about manufacturing. In the Globe and Mail Economy Lab, Stephen Gordon explains why it’s not the crisis we’re constantly being told it is:

The appreciating Canadian dollar has little to do with the decline in manufacturing; employment has been declining worldwide for decades. Changes in relative prices are more important. Producer prices for manufactured goods have increased by about 15 per cent since 2002, while the Bank of Canada’s commodity price index has more than doubled. Any attempt to promote manufacturing exports by depreciating the dollar is doomed to fail, since a lower Canadian dollar will also benefit resource exporters. Capital and labour will always move from sectors where prices are soft to sectors where demand is strong, regardless of what the exchange rate is doing.

But what about those 500,000 lost jobs? An underappreciated fact of the Canadian labour market is the size of the flows in and out of employment. More than 100,000 workers are laid off every month, and even more are hired. Before the recession, the fall in employment manufacturing was largely the result of attrition — workers who quit were not replaced. The loss of 500,000 manufacturing jobs since 2002 has been more than offset by the creation of 2.5 million jobs in other sectors.

[. . .]

Penalizing exports of raw resources could create processing jobs, but those gains will be more than offset by losses elsewhere. If processing in Canada were profitable under world prices, no government intervention would be necessary. The only way policy can generate significantly more processing jobs is by forcing producers of raw materials to accept lower prices or by forcing provincial governments to accept lower royalties. This would be a simple redistribution of income if production is held constant. But it is much more likely that producers would respond to these lower prices by reducing output. Total output and income would fall.

[. . .]

The shift away from manufacturing is part of a process that has increased incomes across Canada. “Dutch disease” is not a problem that needs solving.

May 8, 2012

Now available for download: License to Work

Filed under: Bureaucracy, Economics, Government, Liberty, USA — Tags: , , , , — Nicholas @ 10:14

The Institute for Justice has released a new study, License to Work: A National Study of Burdens from Occupational Licensing, which shows the negative effects imposed on (especially) poor and minority workers across the United States:

The report documents the license requirements for 102 low- and moderate-income occupations — such as barber, massage therapist and preschool teacher — across all 50 states and the District of Columbia. It finds that occupational licensing is not only widespread, but also overly burdensome and frequently irrational.

On average, these licenses force aspiring workers to spend nine months in education or training, pass one exam and pay more than $200 in fees. One third of the licenses take more than a year to earn. At least one exam is required for 79 of the occupations.

Barriers like these make it harder for people to find jobs and build new businesses that create jobs, particularly minorities, those of lesser means and those with less education.

May 5, 2012

Rick Santelli goes to the white board

Filed under: Economics, Media, Politics, USA — Tags: , , , — Nicholas @ 08:59

H/T to Kate at Small Dead Animals.

April 29, 2012

QotD: Bankers, Marx’s dream workers

Filed under: Economics, Humour, Quotations — Tags: , , — Nicholas @ 09:54

In a way bankers are Marx’s dream, it’s the workers getting the fruits of their labours. It’s funny that the left is usually angry at shareholders, for taking money out of companies and thereby bringing down workers’ salaries. Yet with the banks they want shareholders to press the banks to do exactly that, and curb pay.

Joris Luyendijk, “External auditor: ‘Nobody at a bank can have a complete overview any more'”, The Guardian, 2012-04-28

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