Thursday assorted links

Comments

#1 - writing grant applications - and they *still* don't give money to grant applicants for patenting their invention. Still. Like French royalty the US government understands everything but learns nothing. In the Library of Congress archives 200 years from now, historians will read my comments and shake their heads as to how far advanced I was. Verdad.

Imagine, 200 years from now, someone writing a grant trying to get money to read (or have a bot read) the MR comments section. How does one sell that?

2. "Low-skilled immigration down, low-skilled wages up", followed by several paragraphs going through the history of wages and immigration (but curiously ignoring the post-WWII 'golden age') to conclude this is probably a bad thing.

I'm pro-immigrant, but anyone with some undergrad Econ understands the plausibility on its face of "Immigration down, wages up". Capitalists have always understood this.

If low skilled wages went up because new laws restricted large numbers of women or blacks from working in those low skilled professions, I would consider that a bad thing. Laws restricting immigrants from those low skilled professions are morally the same because one’s nationality is an involuntary characteristic assigned at birth in the same way that one’s gender and race are.

I read your first sentence as "minimum wage, bad". And in point of fact, when the minimum wage was first introduced, black unemployment skyrocketed, which was the whole idea (relieve unions from being undercut).

Like I said, I'm pro-immigration, but I also understand what it implies.

I'm pro-High Skilled immigration. But I believe we should give the bottom quintile another decade of rising wages before we open the flood gates again to competition. They already have to deal with automation and global trade.

I'm pro-immigrant, period. People willing to move thousands of miles for a shot at a better life has always been a big part of American identity. In some ways, new immigrants are a better embodiment of Americanness than those already here.

At the same time, if lots of people here are suffering on accounta immigration, they have a voice too, even if the great-grandparents of these people would be disappointed in them.

"even if the great-grandparents of these people would be disappointed in them."

Their great-grandparents lived in an economy that was 90%+ low skilled labor oriented and had no welfare state. Extra labor was almost always contributed more in taxes and to the economy than it cost.

Advancing technology, low cost of shipping & globalism has reduced the labor surplus to be for low skilled labor jobs. The cost of welfare has increased the costs associated with low skilled laborers and their dependents.

We went from it being a net positive to a marginal scenario, Progress isn't stopping. Low skilled labor will be a net negative per capita eventually even if it's not today.

Driving through the rural midwest, I see town after town that is dying. 150 years ago, these towns were built and maintained by people far poorer than us, and with no government in sight.

It's fashionable today to look down our nose at prior generations for their horribleness, but the contempt running the other way should be worse.

+1, good post

Where did youget your data on black unemployment and the minimum wage?

The minimum wage was first introduced in 1938 and I have never been able to find data on black unemployment that goes back that far. In 1938 the bulk of the black population lived in the rural south and extensive seasonal underemployment was a severe problem, but urban unemployment as we know it was not a black problem. Especially since farm workers were exempt from the minimum wage.

Maybe I misspoke. I was channeling Friedman/Sowell.

Digging in, Sowell apparently says there was no immediate bite in 1938, because inflation was hotting up:

"The full effect of the Fair Labor Standards Act of 1938 was postponed by the wartime inflation of the 1940s, which raised wages above the level specified in the Act. Amendments to raise the minimum wage began in 1950 -- and so did the widening racial differential in unemployment, especially for young black men."

Some more recent data here:

https://www.aei.org/carpe-diem/milton-friedman-in-a-1966-newsweek-op-ed-the-minimum-wage-law-is-a-monument-to-the-power-of-superficial-thinking/

And here's another take with some data:

https://mises.org/wire/racist-history-minimum-wage-laws

I agree that the data are not so robust as we move back through the mists of time, and my comment that black unemployment skyrocketed when minimum wage laws were first enacted is not supported, so I take that specific claim back, but the gist seems to be on the side of Econ 101 here.

In my state most of the towns in 1875 were market towns for the surrounding area. I think it would make more sense to look about a hundred years back. I am less certain than you that my farm-leaving grandparents of the twenties would find the current moment particularly fair or comprehensible.

Also, people are not assigned gender at birth. Their sex is observed and recorded.

Gender is a social construction and is assigned and re-assigned by society and individuals. It is the vilest of hate speech to say otherwise.

Not so. Nationality can change. You can immigrate to another country. Would you say that morally those related to you are the same as those unrelated, and that whether someone is related to you is an involuntary characteristic and therefore anyone should be able to enter and live in your home?

A country is not your personal home.

So what? What is the relevant difference, morally speaking? Do you want to substitute "clubhouse" for home? Everyone wants to dismiss this argument out-of-hand because they know it is so powerful and can't be argued against with logic.

It's a bad analogy.

All analogies are bad analogies at a certain level of resolution. It's a less bad analogy - or extension of a moral principle, if you prefer - than Zaua's, however.

It's just completely inapt. You don't own this country, and you don't have to interact with immigrants if you don't want to. Obviously, you own your home and anyone living there with you is intimately in your life.

There has to be limit like anything else, but there is zero equivalent between someone coming here from another country to work and pay rent and contribute to the economy, and someone moving in to your private residence.

The country is not one big house with 330 million family members who don't need someone else living in their house. It's a huge country with labor needs and a history of letting strivers from all over the world come here to try to make a better life for themselves.

The analogy is ridiculous. It's not apples and oranges, it's apples and tractors.

'... is an involuntary characteristic assigned at birth in the same way that one’s gender and race are.'

How far do you take that? Do you go full Rawls? Beyond? Would you approve of random matching of newborns to parents, since that undoes a major part of the massive injustice of birth lottery? If not, why not?

Lots more traits are out of your control - age, disease status (HIV carrier status, disability), IQ.

We accept restrictions to labour for young children, mandatory retirement for the old, practical minimum cognitive thresholds of IQ for complex jobs, etc. We also accept explicit restrictions of nationality for military and government service, gender and sex for certain roles (adoptive mother, etc).

In the real world, restriction of roles to citizens, and acquired citizenship to certain skill profiles and ancestral connections and birth status, is no more onerous than these things.

2. Why is wage growth always talked about in nominal terms? Real wage growth is what matters, not nominal. 2% nominal wage growth with no inflation is better than 3% nominal wage growth with 2% inflation.

FYI- real median wages up 9.1% between 2012 and 2018. Real average wages up 6.2% over the same period.

This is very good news for Americans, but out of step with the current fashion that everything is terrible.

I didn’t say everything is terrible. However, there is a media narrative that wage growth is accelerating. This is only true if you look at nominal rather than real wages. Real wages grew faster in 2015 than they have in recent years.

I didn't mean to attribute that sentiment to you. Sorry about that.

And yes, 2015 was the BEST recent year for median vs. average wages, but the 6-year trend remains very good news for regular folks. In my view, the predominant media narrative is closer to "everything is terrible" than "wage growth is accelerating".

2018

And median wage increase of over 4%, first time since 2000. 2018 was a good year.

Just saw your response about deflating by the Jul CPI.

Do you have a source for those numbers?

This source indicates a lower number. Page 6

Annualized real wage growth from 2010-2018 50th percentile
Men: 0.5%
Women: 0.4%

Granted, it was negative for the decade before.

Congressional Research Real Wage Trends, 1979 to 2018
https://fas.org/sgp/crs/misc/R45090.pdf

I'm using Social Security data, which is straightforward and pretty comprehensive.

https://www.ssa.gov/OACT/COLA/central.html

That link doesn't seem to show Real Wages. Am I reading it wrong?

No. You have to separately adjust for inflation. I used July CPI.

There is still a big discrepancy between the two data sets.

Is the CPI the correct metric to for wage inflation? I don't think it includes the cost of housing. That alone may account for the discrepancy.

Housing is a big part of CPI (not PCE).

Any cost of living adjustment is dicey, but making no adjustment is obviously wrong.

I haven't compared the data sets, but like I say, Social Security data is fairly comprehensive and easy to understand. I'd be surprised if other data didn't produce similar results.

Yes, both of those are what I would consider reliable sources.

Wait, I just looked at the numbers.

"real median wages up 9.1% between 2012 and 2018. Real average wages up 6.2% over the same period."

Did you switch the categories? It looks like median wages should be the lower of the two.

No. Median growing faster than average suggests declining income inequality, that's why it's so interesting.

Median 2012: 27,519.10
Median 2018: 32,838,05
Nominal increase: 19.3%

Average 2012: 42,498.21
Average 2018: 50,000.44
Nominal increase: 16.1%

It looks like I used the average 2012 and 2018 CPI numbers, not July. Sorry. Again, we can quibble about the appropriate cost-of-living adjustment, but that doesn't change the fact that the median gained ground on the average during the past six years.

2012 average CPI : 229.6
2018 average CPI: 251.1
Prices up 9.4% during this period.

I don't disagree that your numbers look good, but they are in pretty stark contrast to the numbers from the Congressional Research office.

I’ve been thinking about what a dragon meant to the Greeks, a chorus of summer solstice shiver, when the angle turns right and the inebriated can sing and dance, hopefully.

5. Tech jargon promoting tech nonsense. Will it ever end? One of the great injustices is that Glenn W. Turner came along way before his talents could really be appreciated. Companies valued in the billions that don't turn any profits and aren't projected to turn any profits. I once was involved with someone who bragged that she could sell sand in the desert - in the 1980s she sold PCs for IBM (you had to be there to understand). She was one heck of a salesman, but she's a piker compared to today's tech pitchmen (and tech pitchwomen Gross intends to recruit).

what does this suggest?

This message paid for by the Online Shill committee to Elect Michael Bloomberg for President.

#1: Some good points but I'm not as worked up about burying the lede in an abstract as the author is. Abstracts are short and if the researchers' main point is pushed to the very last sentence that's fine with me. Whether I'm skimming the abstract or avidly reading every word of it until I get to the end, it's a short process either way and at the end I have a good idea of what the paper's about (unless of course the authors' wrote a crummy abstract, but burying the lede is not what makes an abstract crummy).

I also think the author's a little unfair because by definition there's going to be a lot of crucial items that the researcher doesn't know. That's why they're doing the research, to find out. Imagine if Tyler applied those super-rigorous criteria to the people who apply for Emergent Ventures.

Agree. If you already have an idea and know that it's good, why do you need a grant?

#3: "Also there is no gender or religious discrimination in the Israeli sector."

I have some skepticism of the claims of the article, especially given where it's published but I can certainly believe some aspects of it. E.g. I do not for one second believe that there's no gender discrimination in the Israeli sector. But I can also easily believe that there's less of it there than there is in the Palestinian sector.

But wouldn't that mean that Palestinian men, assuming that they're not the gender being discriminated against, would prefer to work in the Palestinian sector? (If they dislike gender discrimination period then yeah they'd want to avoid the Palestinian sector, but if gender discrimination is as rampant as this article implies, there aren't that many men who feel that way.)

As for religious discrimination, I'm trying to figure out what the article is describing. So there's no difference being Jewish vs Palestinian when you work in the Israeli sector? Even if true, if I'm a Palestinian I could still work in the Palestinian sector and presumably not suffer religious discrimination.

Maybe the article is referring to Sunni vs Shia discrimination in the Palestinian sector? I don't know how often that happens but I could imagine that being a factor and being a reason why a Palestinian might prefer to work in the Israeli sector. But the article doesn't provide this info.

I don't dispute that there are reasons why some Palestinians prefer to work in the Israeli sector, and the article provides some reasons. But some of those reasons are either dubious or need explanation.

#4: This could be relevant if we're heading towards a COVID-sparked economic recession. If the article's right, there could be a floor to the upcoming market downturn. Or maybe not, if those same managers decide to flee to safety and away from equities. I'd guess they're probably less skittish and lemming-like than individual small investors, but maybe not by much.

@mkt42, you ask about the discrimination that Palestinian would encounter if they work in Palestinian Authority areas. Some might include anti-gay discrimination, clan/family based nepotism, discrimination against irrelevant disabilities, family status or pregnancy, and sexism against women. Christians in Palestinian areas suffer from persecution from Muslim fanatics. I don't have statistics, but I have heard of most of this kinds of discrimination within the PA areas at levels not commonly found in Isral.

(There are very few Palestinian Shiites, so that is not the issue.)

You ask if Palestinian might prefer working where women are discriminated against; maybe, but irrational discrimination leads to economically worse outcomes for everyone, so that salaries, for example are lower.

#2: Consider the following two paragraphs:
"But businesses then reorient production towards less labour-intensive products; natives take jobs previously occupied by foreign-born folk, which may be worse paid; and bosses invest in labour-saving machinery, which can reduce the pay of remaining workers."

And:
"Even the apparent short-term benefits to wages are a poor economic argument for tough immigration restrictions. Migrants have economic effects far beyond the labour market. They spur innovation and entrepreneurship and they help create trade links between America and their home countries. Both low- and high-skilled migration are linked with higher productivity."

The second appears immediately after the first but seems to contradict it with no evidence provided. Falling immigration spurs investment in labor saving machinery...but, oh, wait, I mean, migrants bring loads of economics benefits. QED.

It is difficult to get a man to understand something, when his salary depends on his not understanding it. - Upton Sinclair

#2...I've still never gotten a response to my point that, if you want to guarantee everyone a job, you're going to have to limit immigration. For one thing, you're going to have to make it plain that some people are going to have to take jobs they'd really rather not. Of course, I'm assuming that legal immigrants will be guaranteed a job when they enter the country too.

"if you want to guarantee everyone a job, you're going to have to limit immigration."

Yes, that seems obvious.

We do limit immigration, that's what visas are. I also assumed that a job guarantee would only apply to citizens.

https://www.cbpp.org/research/full-employment/the-federal-job-guarantee-a-policy-to-achieve-permanent-full-employment

Bob, We do not currently limit immigration. We can't. It's called illegal immigration. The illegal immigrants take jobs in the US. We can argue why they do so. Being from the Central Valley of California, I know that some of it is an encouraged job program for farm workers. The employers have encouraged it. Here's the simple point...The current illegal workers will have to leave. Period.

"Are undocumented immigrants counted in the surveys?

It is likely that both surveys include at least some undocumented immigrants. However, neither the establishment nor the household survey is designed to identify the legal status of workers. Therefore, it is not possible to determine how many are counted in either survey. The establishment survey does not collect data on the legal status of
workers. The household survey does include questions which identify the foreign and native born, but it does not include questions about the legal status of the foreign born. "

Okay. So, how many non-citizens are currently employed in the US.? I'm assuming no one is arguing for a guaranteed job for citizens without attempting to fill the current jobs taken by non-citizens. Hello, these are already real jobs. Therefore, the easiest is and first part of guaranteeing jobs for citizens is to attempt to replace citizens in jobs now being done by non-citizens. That means a lot of the unemployed will be useful as farm workers, unless you plan on guaranteeing citizens a job they like.

So, follow me here. Do we want to guarantee people a job or have some kind of make-work program ? In other words, is what's being proposed that we will make work in order to get full employment for citizens? If so, then you're really just proposing a massive government investment program, meaning that the government is also going to have to buy cement, etc., a massive procurement program. Then argue for that, and we'll hire the people we need to do the jobs. But to allow non-citizens to take jobs from citizens is not is not compatible with a guaranteed job for citizens.

Personally, I don't like this idea, but let's put our cards on the table.

I don’t think the GND proposal limits the job guarantee to citizens, or even legal residents.

#3, that's a pretty great racket there. Suppress Palestinian civil rights and stifle their economic opportunities. Then marvel that they have to go to Israeli-owned firms to make a living. You might as well go into Tulsa the day after they massacred hundreds of black Americans, and ask residents how they like working at the burnt-out husks of the black-owned businesses.

What would be Israel's incentive to stifle economic opportunities in Palestinian-controlled areas? What are the incentives of Palestinian leadership?

To judge whether Israel is "stifling their economic opportunities," compare their opportunities to the inferior opportunities of citizens of Jordan, Egypt, Lebanon and Syria, where Israel is not present.

>Mike will:

Lose. And then get driven home in a very tiny car.

The other way to spin #3 is, "Palestinian workers hate Israeli firms so much that they in order to hire them, they have to offer double what a Palestinian firm would AND give them benefits!"

cf. fossil-fuel divestment. You'd be able to tell that it worked if oil companies' dividend yields double.

2. Katrina and the mass exodus of New Orleans showed how illegal and legal immigration undermined wages. So New Orleans was not an attractive city to any immigrants prior to Katrina while Atlanta and Houston were very attractive to immigrants. Houston was especially attractive to illegals and so prior to Katrina very few New Orleanians would move to Houston...other than workers in the oil and gas industry. So after Katrina the New Orleanians that moved to Houston found lower wages along with culture clash due to competition from Spanish speaking immigrants.

We were visited in the US by employees of an Israeli high tech company vendor we were working with, and went out to dinner. (After a few drinks) I asked them if any Arabs worked for them. They looked at me like I said something crazy, and said “of course not!” The conversation ended there.

#1 Also relevant for journalism pitches. The most common themes I encounter are:
1. I have an idea but first let me give you some background
2. I have several ideas and one is bound to be good
3. I’m bound to have a good idea at some point
4. I would like to write for you. Do you have an idea?

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