Bloomberg article on why teenagers are not in the labor force ignores obvious reason

Article here

Excerpt:

Just one in three teens in the U.S. worked or looked for a job in January, a record-low since 1948 when the Labor Department data starts. That lack of on-the-job experience could cost future workers, who may lag behind on basic skills their parents developed waiting tables or running registers, some economists say.

Why would teenagers choose to not be in the labor force?  The obvious answer is that the unemployment rate is so high that workers are discouraged and dropping out of the labor force.  Many don't want to search for a job when 25% of those who are actively looking can't find one.

And why is the unemployment rate so high?  Clearly the minimum wage is the biggest reason.  (See here for previous blog post on the issue.)  Unfortunately, this Bloomberg article didn't once mention the minimum wage.

Another excerpt:

Forgone starter jobs probably won’t cost those who earn a college degree, said Harry Holzer, a professor of public policy at Georgetown University in Washington, and former chief economist at the U.S. Department of Labor. 

“If you’re going onto college anyway, especially a four-year college, and the job you would have is serving up pizza slices, then you’re not missing out on anything important,” he said.

I disagree with this.  Further, this is demeaning to those who are "serving up pizza slices".  Those individuals, along with people who work jobs like what I had, at a fast-food restaurant, learn to show up for work when required, to answer to a boss, to deal with customers, and how to be responsible.  These are skills that are crucial to career success, and not having these skills can set back a college graduate dramatically in his/her quest for a promotion and career advancement.

My new piece in Forbes on the gender wage gap

Link here

Excerpt:

If you insist that the gender wage gap is a result of discrimination against women, here are a few other claims that must be equally true. By the same logic, young men are discriminated against in favor of young women. Women in their 20s without children out-earn men by as much as $1.08 to every dollar, according to some estimates. It must also be true that white men are discriminated against in favor of Asian-American men, who earn over 5 percent more than white men. To claim either of these as discrimination would be ridiculous, though, right? There are differences in job types, education levels, hours worked, and other factors that lead to these wage differentials.  But these factors are just as responsible for the overall difference in wages between men and women.

George Soros censors the press with help from universities

Link here

Excerpt:

The FCC may have suspended its invasion into American newsrooms, but the controversial "Critical Information Needs" study also has George Soros' fingerprints all over it.

While disturbing, this should come as no surprise since Soros' gave more than $52 million to media organizations from 2000-2010.

Two schools were working with FCC on the project, according to Byron York of The Washington Examiner. The University of Southern California Annenberg School for Communication and Journalism and the University of Wisconsin-Madison Center for Communication and Democracy, were tasked by the FCC with coming up with criteria for what information is "critical" for Americans to have. The FCC study would have covered newspapers, websites, radio and television, according to The Washington Post.

This is sad, but unfortunately there are university professors at most universities who will claim they support the first amendment but then publicly support the fairness doctrine, which would put in government restrictions on press outlets and violating the first amendment.

Guess which business is closed on President's Day

Guess which business is closed on President's Day?

1. The grocery story (run by companies seeking profits)

2. The gas station (run by companies seeking profits)

3. The wine and liquor store, which is run by the Pennsylvania government.

Tough one, right?

My paper on smokeless tobacco published in Preventive Medicine

Link here

Abstract

Introduction

Epidemiological and toxicological evidence suggests lower risk of smokeless tobacco (ST) products compared to cigarettes. Less is known, however, about consumer perceptions and use of novel forms of ST, including snus and dissolvable tobacco.

Methods

In this study, we conducted in-person experimental auctions in Buffalo, NY, Columbia, SC, and Selinsgrove, PA with 571 smokers to test the impact of information and product trials on smokers' preferences. Auctions were conducted between November 2010–November 2011.

Results

We found no evidence of an impact of product trials on demand in our auctions. Anti-ST information increased demand for cigarettes when presented alone, but when presented with pro-ST information it decreased demand for cigarettes. It did not decrease demand for ST products. Anti-smoking information increased demand for ST products, but did not affect cigarette demand.

Conclusions

These findings suggest that credible and effective communications about tobacco harm reduction should reinforce the negative effects of smoking.

Good minimum wage article and other links

1. From The Federalist: facts about the minimum wage

2. Thomas Sowell's random thoughts are always interesting

Excerpt: 

I don't happen to like the idea of "stop and frisk." However, I like even less the idea of armed hoodlums going around shooting people. Those who refuse to see that everything has a cost should be confronted with the question: "How many more young blacks are you willing to see shot dead, because you don't like 'stop and frisk'?"

 3. Economics of Downton Abbey (a week old, but I missed it originally)

Excerpt: 

Downton’s soap opera characters are wrestling not only with their emotions, but also with basic Downtonomics: the threat and promise of technological change, burden of inheritance taxes, foreign investment, danger of speculation, need for retirement planning, virtue of investing for growth, and inadequacies of the social safety net. Is the cook, Mrs. Patmore, any less adept with that mixer than your grandmother is with a tablet?

Milton Friedman on minimum wage

Hat tip to The Commonwealth Foundation

Learning economics through pictures ... Unintended consequences

The Affordable Care Act (Obamacare) imposed a tax on tanning beds.  Many gym memberships included the ability to use tanning beds.  Planet Fitness posted this sign in one of their stores, to indicate how their users now must pay a tax.

This is a good example of an unintended consequence.  Its pretty clear that battling obesity is a priority from the current White House administration (Michelle Obama has spent a lot of time on this issue).  I'm sure they didn't intend to impose extra costs on gym memberships.  That said, it is difficult to foresee the unintended  negative side-effects from government policies.

When government is taxing gym memberships, something's wrong ...

Link here

Excerpt:

The reason these accounts are forced to charge the new tax is because they include the option for members to tan at the clubs.  Obamacare has a tax on tanning salons.  It doesn't matter if the member uses or does not use the tanning facilities.

Subway faux-controversy, and disturbing facts about "food babe"

Subway is removing a "chemical" from bread

Of all the thing people worry about - Subway's ingredients should be about 27,228 on the list.  Subway has a lot to lose if their food were to cause problems, and I'm quite confident their food is safe.  That's why I eat it and allow my kids to eat it.


Here's a post by Colby Vorland, with some facts about this "food babe".   He creates a list of why nobody should place any faith in this person.

Excerpt:

-Thinks microwaves are a risk because of radiation, destroying nutrients, and changing the structure of water (seriously) http://foodbabe.com/2012/07/30/why-its-time-to-throw-out-your-microwave/?sb

-Says artificial sweeteners cause cancer, obesity; links to Mercola who is the internet's worst health source http://foodbabe.com/2013/01/25/coca-colas-low-calorie-beverages-will-kill-you-before-they-solve-obesity/?sb

-Thinks GMOs cause obesity (same link above)

These are just three points - many of the others are actually worse.

This whole ordeal is sad.  The fact that people listen to a person like this is a sad commentary on our education system and our society.  Of course, some unintelligent people who are listening actually pose as leaders. 

Logical inconsistencies in fracking articles

Article 1: Link here to the article titled "Panel of scientists say economic impact from fracking overstated"

A couple points of questionable logic in this article:

1. The title says: "Panel of scientists say economic impact from fracking overstated"

Why not have a panel of economists discuss the economic impact of fracking?  The title was correct - it was scientists.

2. The article says:

According to the panel's presentation during the hearing – held by Sen. Tony Avella, D – Queens, an outspoken critic of horizontal drilling – there are only two regions in the Marcellus Shale in New York that contain enough organic content to possibly produce high amounts of natural gas. 

If he's right, why do anti-fracking activists care?  There will be so little drilling that all the cries from the anti-fracking crowd would be unnecessary.  This seems logically inconsistent.  If it were unprofitable for gas drillers to drill in New York, they wouldn't.  The reason the critics are so loud in New York andwant to maintain a moratorium on drilling is they fear widespread fracking.



Article 2: Article titled "Drilling's Economic Impact Debated".


Excerpt 1 (with my comments):

“There’s no doubt that there is some economic benefit when shale comes to town, but it’s not long-lived,” she said. “What we found is you get about four years of benefit — maximum. And then it drops off.”

What areas are then left with, Rogers said, are expensive road damages and environmental impacts — caused by the natural gas companies — and no way of paying for repairs except to use taxpayer money.

In my research, I've found that people in northeastern Pennsylvania think their roads are in great shape  - much better than they were before fracking.  Rogers' perception isn't reality.   Further, there seems to be more jobs than there were pre-fracking, even if not quite as many as the boom.

Further - those jobs came at the exact perfect time - when the economy was at it's worst.  Fracking was a far more effective "stimulus plan" than anything the government has attempted recently.

Excerpt 2 (with my comments)

“It’s the typical boom-and-bust mentality,” she said.

John Felmy, chief economist for the American Petroleum Institute, said there’s an initial surge in natural gas production, but the economic benefits continue for decades, especially in the form of lower energy costs and payments from gas companies to landowners.

“This is an economic benefit that is going to continue for the foreseeable future,” he said.

Felmy is absolutely right.  The benefit of the low gas prices is huge for the US economy.  Worth tens of billions of dollars.



Excerpt 3 (with my comments)

On Tuesday, Keith, the M&T Bank regional economist, presented data that showed real personal income in Bradford, Tioga, Pa., and Lycoming counties is up 14 percent — double the 7 percent U.S. average and well above the 1.8 percent increase in Binghamton during that time.

But all three counties have a median household income that is at least $7,600 less annually than the Pennsylvania figure of $52,267, according to data from United States Census Bureau.

This is terrible analysis in the 2nd paragraph.  The word "But" here is awful.  What's the point of the reporter.  Is the reporter upset that fracking has helped an area that was down-on-its luck?  Does the reporter think it is bad they didn't help, say, a wealthy Connecticut county instead?  I doubt it.  I suspect the reporter is using this as a way to discredit the income gains.  The income gains in the three counties likely would have been close to the 1.8 percent in Binghamton if it weren't for fracking.  Fracking has mean 12% income growth for these counties.  That's absolutely enormous and it doesn't matter that these areas were are still are poorer than the national average.

Idea to prevent fraud - forcing food stamp recipients to show their ID

Proposal to require that a person shows their ID when purchasing with food stamps

Excerpt:

Rep. Matt Salmon, R-Ariz., introduced the SNAP Verify Act, which would require individuals who receive acceptance through the Supplemental Nutrition Assistance Program to present a photo ID when buying products at stores that accept food stamp recipients. 

"My bill simply requires the photo identification of authorized users of SNAP electronic benefit cards at the point of transaction," Salmon said in a statement. "With over $750 million in SNAP card and food trafficking fraud each year, it is time Congress take action to address the rampant waste in this program." 

My thoughts:

1. I suspect the amount of food stamp fraud far exceeds $750 million a year.  They've only proven $750 million a year.

2. This seems like a no-brain decision.  We should do what we can to reduce wasteful and fraudulent spending.

3. I'm curious to hear what the opposition to this bill will say.  The only two things I can think of is that it's a burden on recipients or that it might embarrass recipients.

Do practice rounds affect experimental auction results?

That's the title of my newest publication, which is joint work with Jay Corrigan and Dinah Depositario.

Link here

Abstract:

Researchers use practice rounds to familiarize participants with experimental auction mechanisms. We find a positive correlation between practice bids and bids submitted in later rounds. We consider three explanations for this correlation: a behavioral anchoring effect, a tendency for some auction participants to be more free-spending, and misconception of the experimental auction’s demand revealing qualities.

Why we need GM-wheat and other assorted links

Jayson Lusk and Henry Miller on why we need GM wheat

Excerpt:

Without the benefits of the newer molecular techniques of genetic engineering, the nation’s wheat industry will continue to struggle against other commodities that have adopted biotechnology, and against the drought conditions out West. All of this is happening as the planet’s population increases and global wheat demand expands in response.

 ...

Why has wheat lagged behind? One reason is that, back in the mid-1990s, corn and soybean farmers avidly embraced the nascent biotechnology revolution, snatching up new, genetically engineered seed varieties. But wheat farmers balked at the potentially higher prices of these new seeds and feared that anti-genetic engineering views held by some of our trading partners would hurt exports.

2. Commonwealth Foundation on paycheck protection

Excerpt:

For example, government unions argue that paycheck deductions for union fees, dues and political action committee (PAC) campaign contributions are no different than deductions for health insurance premiums and charitable contributions.

But this is comparing apples to oranges. Unlike voluntary deductions, union dues and PAC contributions are inherently political, partisan and, in the case of union fees, involuntary.

3. Tim Sandefur and PLF help secure another victory for freedom.

Excerpt:

We sued Kentucky bureaucrats over that state’s “Certificate of Public Convenience and Necessity” or “Certificate of Need” law–CON law, for short–which says that you can’t operate a moving company unless you first get permission from the state’s existing moving companies. As we explained in this blog post,existing movers have used this law as a powerful tool to block new competition in the industry. The court finds that the law is not rationally related to protecting the public, but only bars competition to benefit existing companies. 

Great article by David Kendall on minimum wage

Link here

This article is from 2007, but it's just as relevant today:

You should read the whole thing, but here are excerpts:

In 1964 I turned 15 and landed my first real summer job washing dishes in a restaurant. Somehow, I got the job over several others who also wanted it. My first wage was 80¢ an hour—45¢ below the $1.25 federal minimum wage that year. 

It might take an army of lawyers to figure out whether my employer was breaking federal law by not paying me minimum wage. But legal or not, I was thrilled to work for 80¢ an hour. That summer I learned a lot about holding a job, personal responsibility, and forgoing summer fun with my friends. I even got a raise to 90¢ an hour after the first month. More important, I earned about $385 over the summer, an enormous sum for me at the time.

And

Who gains and who loses if Congress raises the minimum wage to $7.25 and hour?  Supporters in Congress clearly gain by doing what appears to be a highly visible “good.”  Some voters like the idea of guaranteeing higher incomes to low income earners.  But the good comes at the expense of others in the labor force who earn even lower incomes.  The losers are generally willing, hardworking people with the poorest educations, the lowest skill levels, and the least ability to help themselves.  Fortunately for Congress, the harm done is evidently out of sight to most Americans. Better still for Congress, the losers don’t make campaign contributions, and many of them seldom vote. 

Real or fake Dan Quayle quote?

This from my Political Trivia book.

Round 6: Real or fake Dan Quayle quote?

Here are ten phrases. Some are from Dan Quayle. Some are made up. Your job is to tell us which
ones are actual quotes.

1. If we don't succeed, we run the risk of failure. 

2. It's wonderful to be here in the great state of Chicago. 

3. One word sums up probably the responsibility of any vice president, and that one word is “to be prepared”.

4. We have a firm commitment to NATO, we are a part of NATO. We have a firm commitment to Europe. We are a part of Europe.

5. Quite frankly, teachers are the only profession that teach our children.

6. I wish to thank the astronauts. And all the others who go to space.

7. I prefer to run when I go running.

8. George Bush will make a great President. He knows how to use a tool.

9. Wow, there are some gorgeous women here in Florida!

10. The president is going to lead us out of this recovery.

You can get the answers for free by downloading the sample of this book on your kindle.

If you like this, you can find similar rounds involving quotes from Joe Biden, George W. Bush, and Barack Obama in Political Trivia.

Learning economics through pictures: Inflation-adjusted prices for video game systems

This shows the original (nominal) prices and the inflation-adjusted prices for twenty-four video game systems released since 1977. (Source: randommization.com - HT - Kim Holder)

The errors of a Berkeley economist and other assorted links

1. Leftist economist shot his mouth off in 2009.  He was very wrong.

Excerpt:  

In response to Mankiw’s criticism of the Administration forecast, DeLong wrote a post that began with “Sigh.” (italics are DeLong’s) to show how frustrating it was to deal with such idiocy. DeLong explains that because the 2009 economy was depressed due to high unemployment, we could expect higher than average economic growth as the unemployment rate quickly fell over the next two years (during which half of the above-natural unemployment should be erased). Then DeLong–like Krugman–acknowledges that Mankiw knows all of this, and ends his post this way:

So how did things turn out? Scott Sumner reports that “the actual 5 year RGDP growth just came in at slightly under 6.3%. That’s not even close. Mankiw won by a landslide.”

2. This economist article is pretty good, except for the misleading title and photo (come on -- the fire is almost certainly not due to fracking).

The story discusses how fracking leads to overall increases in prices, but those closest see smaller gains.  That's not what the title or photo imply.

3. I missed this when it first came out ... scalper resistant tickets to the Super Bowl.

4. Keystone Pipeline clears hurdle.

Let's hope Obama stops delaying this.  He's been really out-of-line with his delays.  This would be very good for our country.