Labor Economics – Page 88 – artdiamondblog.com

Good Jobs and Bad Jobs

Source of cartoon: online version of the WSJ article quoted and cited below.

Labor is usually viewed as a victim of the process of creative destruction, because some old jobs are destroyed when a new technology replaces an old one. But part of the process is the creation of new jobs, and on average, the new jobs are created have better characteristics than the old jobs that are destroyed.
The article quoted below, discusses some of the characteristics that make a job better or worse.

(p. D2) Nineteen years ago, Jennifer Courter set out on a career path that has since provided her with a steady stream of lucrative, low-stress jobs. Now, her occupation — mathematician — has landed at the top spot on a new study ranking the best and worst jobs in the U.S.

“It’s a lot more than just some boring subject that everybody has to take in school,” says Ms. Courter, a research mathematician at mental images Inc., a maker of 3D-visualization software in San Francisco. “It’s the science of problem-solving.”
The study, released Tuesday from CareerCast.com, a new job site, evaluates 200 professions to determine the best and worst according to five criteria inherent to every job: environment, income, employment outlook, physical demands and stress. (CareerCast.com is published by Adicio Inc., in which Wall Street Journal owner News Corp. holds a minority stake.)
The findings were compiled by Les Krantz, author of “Jobs Rated Almanac,” and are based on data from the U.S. Bureau of Labor Statistics and the Census Bureau, as well as studies from trade associations and Mr. Krantz’s own expertise.
According to the study, mathematicians fared best in part because they typically work in favorable conditions — indoors and in places free of toxic fumes or noise — unlike those toward the bottom of the list like sewage-plant operator, painter and bricklayer. They also aren’t expected to do any heavy lifting, crawling or crouching — attributes associated with occupations such as firefighter, auto mechanic and plumber.

For the full story, see:
SARAH E. NEEDLEMAN. “Doing the Math to Find the Good Jobs; Mathematicians Land Top Spot in New Ranking of Best and Worst Occupations in the U.S.” The Wall Street Journal (Tues., Jan. 6, 2008): D2.

For the ranking of 200 jobs, and the components that went into the ranking, see:
http://www.careercast.com/jobs/content/JobsRated_Top200Jobs

Eastman Was a Self-Financed Entrepreneur

Mark Casson has argued that the more original the entrepreneur’s innovation, the more likely he will need to finance all, or a large part, of it himself. To the extent that this is true, it represents an important argument for allowing the accumulation of wealth (and thereby an argument against substantial personal income, and inheritance, taxes.)
Here is an example, consistent with Casson’s argument, of a self-financed entrepreneur:

(p. 36) The idea of loading film into a camera, snapping the picture and then sending the film to a store to be processed was the brainchild of an American from Rochester, New York, called George Eastman. One day in 1879, at the bank where he had worked since leaving school at the age of fourteen, he didn’t get the promotion he was expecting. So he left and used his savings to set himself up as a “Maker and Dealer in Photographic Supplies.” At this time, picture taking was a messy, cumbersome and expensive business, involving glass-late negatives, buckets of chemicals an monster wooden cameras. When Eastman had finished his experiments with the process, his slogan promised, “You press the button. We do the rest.”

Source:
Burke, James. The Pinball Effect: How Renaissance Water Gardens Made the Carburetor Possible – and Other Journeys. Boston: Back Bay Books, 1997.

“Three Generations from Overalls to Overalls”

(p. 156) Because it proceeds by competitively destroying old businesses and hence the existences dependent upon them, there always corresponds to it a process of decline, of loss of caste, of elimination. This fate also threatens the entrepreneur whose powers are declining, or his heirs who have inherited his wealth without his ability. This is not only because all individual profits dry up, the competitive mechanism tolerating no permanent surplus values, but rather annihilating them by means of just this stimulus of the striving for profits which is the mechanism’s driving force; but also because in the normal case things so happen that entrepreneurial success embodies itself in the ownership of a business; and this business is usually carried on further by the heirs on what soon become traditional lines until new entrepreneurs supplant it. An American adage expresses it: three generations from overalls to overalls. And so it may be. Exceptions are rare, and are more than compensated for by cases in which the descent is still faster. Because there are always entrepreneurs and relatives and heirs of entrepreneurs, public opinion and also the phraseology of the social struggle readily overlook these facts. They constitute “the rich” a class of inheritors who are removed from life’s battle. In fact, the upper strata of society are like hotels which are indeed always full of people, but people who are forever changing.

Source:
Schumpeter, Joseph A. The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Translated by Redvers Opie. translation of 2nd German edition that appeared in 1926; translation first published by Harvard in 1934 ed. London: Oxford University Press, 1961.

A Succinct Account of the Rise of Anti-Semitism

James Burke, writing of the ninth-century AD (the century of Charlemagne’s death in 814 AD):

(p. 32) It was at this time too that anti-Semitism, previously rare, began to increase. Money-lending, which was forbidden by the Christian Church, was permitted under Jewish law, and the Jews, prevented from owning land, turned to the new business currency. Many of them grew rich and were resented.

Source:
Burke, James. The Day the Universe Changed: How Galileo’s Telescope Changed the Truth and Other Events in History That Dramatically Altered Our Understanding of the World. Back Bay Books, 1995.

Fewer Jobs Under Obama’s High-Cost Health Plan

“Dave Ratner, owner of four pet stores in Western Massachusetts, is worried about being able to pay into a state health benefits plan.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A16) AGAWAM, Mass. — Dave Ratner, owner of Dave’s Soda and Pet City, is pretty sure he is about to get “whacked” by the new state law that requires employers to contribute to health care benefits for their workers or pay a $295-per-employee penalty. In order to avoid thousands of dollars in fines, Mr. Ratner is considering not adding part-time workers at his four pet supply stores in Western Massachusetts.

But the penalty in Massachusetts is picayune compared with what some health experts believe Senator Barack Obama, the Democratic presidential nominee, might impose as part of his plan to provide affordable coverage for the uninsured. Though Mr. Obama has not released details, economists believe he might require large and medium companies to contribute as much as 6 percent of their payrolls.
That, Mr. Ratner said, would be catastrophic to a low-margin business like his, which has 90 employees, 29 of them full-time workers who are offered health benefits.
“To all of a sudden whack 6 to 7 percent of payroll costs, forget it,” he said. “If they do that, prices go up and employment goes down because nobody can absorb that.”

For the full story, see:

KEVIN SACK. “Businesses Wary of Details in Obama Health Plan.” The New York Times (Mon., October 27, 2008): A16.

Women Earn More than Men, in New York City

Source of the graph: online version of the NYT article cited below.

(p. A1) Young women in New York and several of the nation’s other largest cities who work full time have forged ahead of men in wages, according to an analysis of recent census data.

The shift has occurred in New York since 2000 and even earlier in Los Angeles, Dallas and a few other cities.

Economists consider it striking because the wage gap between men and women nationally has narrowed more slowly and has even widened in recent years among one part of that group: college-educated women in their 20s. But in New York, young college-educated women’s wages as a percentage of men’s rose slightly between 2000 and 2005.

The analysis was prepared by Andrew A. Beveridge, a demographer at Queens College, who first reported his findings in Gotham Gazette, published online by the Citizens Union Foundation. It shows that women of all educational levels from 21 to 30 living in New York City and working full time made 117 percent of men’s wages, and even more in Dallas, 120 percent. Nationwide, that group of women made much less: 89 percent of the average full-time pay for men.

Just why young women at all educational levels in New York and other big cities have fared better than their peers elsewhere is a matter of some debate. But a major reason, experts say, is that women have been graduating from college in larger numbers than men, and that many of those women seem to be gravitating toward major urban areas.

For the full story, see:

SAM ROBERTS. "For Young Earners in Big City, a Gap in Women’s Favor." The New York Times (Fri., August 3, 2007): A1 & A16.

Source of the graph: online version of the NYT article cited above.

Schumpeter Claimed Entrepreneurial Gains Result in New Jobs

From McCraw’s summary of an article entitled “The Function of Entrepreneurs and the Interest of the Worker” that Schumpeter published in 1927 in a labor magazine :

(p. 178) Schumpeter’s key point here is one he hammered home many times: it is the insatiable pursuit of success, and of the towering premium it pays, that drives entrepreneurs and their investors to put so much of their time, effort, and money into some new project whose future is completely uncertain. High entrepreneurial returns are essential to generate gains not only for individuals but also for society, through the creation of new jobs.

Source:
McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

Supporters of Racial Discrimination Fear Allowing People to Vote

(p. A9) A total of 24 states allow voters to change laws on their own by collecting signatures and putting initiatives on the ballot. It’s healthy that the entrenched political class should face some real legislative competition from initiative-toting citizens. Unfortunately, some special interests have declared war on the initiative process, using tactics ranging from restrictive laws to outright thuggery.

The initiative is a reform born out of the Progressive Era, when there was general agreement that powerful interests had too much influence over legislators. It was adopted by most states in the Midwest and West, including Ohio and California. It was largely rejected by Eastern states, which were dominated by political machines, and in the South, where Jim Crow legislators feared giving more power to ordinary people.
But more power to ordinary people remains unpopular in some quarters, and nothing illustrates the war on the initiative more than the reaction to Ward Connerly’s measures to ban racial quotas and preferences. The former University of California regent has convinced three liberal states — California, Washington and Michigan — to approve race-neutral government policies in public hiring, contracting and university admissions. He also prodded Florida lawmakers into passing such a law. This year his American Civil Rights Institute (ACRI) aimed to make the ballot in five more states. But thanks to strong-arm tactics, the initiative has only made the ballot in Arizona, Colorado and Nebraska.
“The key to defeating the initiative is to keep it off the ballot in the first place,” says Donna Stern, Midwest director for the Detroit-based By Any Means Necessary (BAMN). “That’s the only way we’re going to win.” Her group’s name certainly describes the tactics that are being used to thwart Mr. Connerly.
Aggressive legal challenges have bordered on the absurd, going so far as to claim that a blank line on one petition was a “duplicate” of another blank line on another petition and thus evidence of fraud. In Missouri, Secretary of State Robin Carnahan completely rewrote the initiative’s ballot summary to portray it in a negative light. By the time courts ruled she had overstepped her authority, there wasn’t enough time to collect sufficient signatures.
Those who did circulate petitions faced bizarre obstacles. In Kansas City, a petitioner was arrested for collecting signatures outside of a public library. Officials finally allowed petitioners a table inside the library but forbade them to talk. In Nebraska, a group in favor of racial preferences ran a radio ad that warned that those who signed the “deceptive” petition “could be at risk for identity theft, robbery, and much worse.”
Mr. Connerly says that it’s ironic that those who claim to believe in “people power” want to keep people from voting on his proposal: “Their tactics challenge the legitimacy of our system.”

For the full commentary, see:
JOHN FUND. “The Far Left’s War on Direct Democracy.” The Wall Street Journal (Sat., July 26, 2008): A9.

Americans Happy with Work if Advancement is Possible

Source of book image: http://www.arthurbrooks.net/images/book-2.gif

(p. A13) In “Gross National Happiness,” Mr. Brooks has assembled an array of statistics to measure the mood of America’s citizens and to discover the reasons they feel as they do. Most often he cites polls that ask for self-described happiness levels, matching up the answers with various beliefs, habits, life choices or experiences.
And what exactly is happiness? Who knows? The term might refer joy or contentment or moral self-approval or material well-being or appetitive pleasure – or some combination of them all. Mr. Brooks is aware of the problem. He says that Potter Stewart, the Supreme Court justice, could have been describing happiness when he said, of pornography, “I know it when I see it.”
. . .
He challenges those partial to tales about long-suffering Wal-Mart workers and surly burger flippers to rethink their victimology creed. The woe is not nearly as widespread as rumored: 89% of Americans who work more than 10 hours a week are very satisfied or somewhat satisfied with their jobs while only 11% are not very satisfied or not at all satisfied. Most surprisingly, Mr. Brooks writes, there “is no difference at all in job satisfaction between those with below-average and above-average incomes.”
What really makes Americans hate their jobs is a perception that advancement is impossible. And while Mr. Brooks agrees that the nation’s income gap is growing, the national happiness level is steady. Just under one-third of American adults say that they are “very happy”; up to 15% are not too happy; and everyone else is somewhere in the middle. Those numbers have been roughly true since the early 1970s. More government spending doesn’t seem to raise happiness levels, though direct government assistance may diminish it. Charitable giving, Mr. Brooks adds, generally lifts the spirits; Americans do a lot of it.

For the full review, see:
DAVE SHIFLETT. “Bookshelf; How to Be of Good Cheer.” The Wall Street Journal (Mon., May 12, 2008): A13.
(Note: ellipsis added.)

“We Educate Them and Then Tell them to Go Home”

(p. C3) The United States may be synonymous with the high-tech revolution, but it is in danger of losing its high-tech edge, according to Cybercities 2008, a report released Tuesday by AeA, a technology industry trade association.
Because the federal government does not issue a sufficient number of green cards or work visas to talented foreign students studying here, there are a “tremendous number of unfilled jobs,” said Christopher Hansen, AeA’s chief executive.
“We educate them and then tell them to go home. This is absurd,” said Mr. Hansen, whose group has lobbied to increase the number of visas for foreign technology industry workers.

For the full story, see:
ERIC A. TAUB. “U.S. High Tech Said to Slip.” The New York Times (Weds., June 25, 2008): C3.

Ordinary People Have Prospered in Recent Decades

Source of image: http://mjperry.blogspot.com/2008/02/blog-post_2174.html

Stephen Moore is right when he calls Drew Carey’s “Living Large” video “wonderful.”
It would be even more wonderful, if it gave a bit more emphasis, a la Schumpeter, to the positive effects of new products, in addition to its emphasis on declining prices of already existing products.

(p. W11) A few weeks ago I gave a talk on the state of the economy to a group of college students — almost all Barack Obama enthusiasts — who were griping about how downright awful things are in America today. As they sipped their Starbucks lattes and adjusted their designer sunglasses, they recited their grievances: The country is awash in debt “that we will have to pay off”; the middle class in shrinking; the polar ice caps are melting; and college is too expensive.
I’ve been speaking to groups like this one for more than 20 years, but I have never confronted such universal pessimism from a young audience. Its members acted as if the hardships of modern life are making it nearly impossible for them to get out of bed in the morning. So I conducted a survey of these grim youngsters. How many of you, I asked, own a laptop? A cellphone? An iPod, a DVD player, a flat-screen digital TV? To every question somewhere between two-thirds and all of the hands in the room rose. But they didn’t even get my point. “Well, duh,” one of them scoffed, “who doesn’t have an iPod these days?” I was way too embarrassed to tell them that I, for one, don’t. They thought that living without these products would be like going back to prehistoric times.
They seemed clueless that as recently as the early 1980s only the richest people in the world had cellphones and the quality of these products left much to be desired. Watch a movie from 20 years ago and you will laugh out loud seeing big clunky black machines that weighed as much as a brick, gave crackly service and cost $4,200. Now cellphones are practically free — even disposable. And the cost of making calls has dropped dramatically too.
. . .
There’s a wonderful new video on Reason.tv called “Living Large.” In it, comedian Drew Carey goes to a lake in California where people are relaxing on $80,000 27-foot boats and goofing around on $25,000 jet skis that they have hitched to their $40,000 SUVs. Mr. Carey asks these boat owners what they do for a living. As it turns out, they aren’t hedge-fund managers. One is a gardener, another a truck driver, another an auto mechanic and another a cop.
. . .
After my lecture, one young woman walked up to me on her way out and huffed: “What I favor is a radical redistribution of wealth in America.” I tried to tell her that America’s greatness is a result of our focus on creating wealth, not redistributing it. But it was too late — she was already tuning in to her iPod.

For the full commentary, see:
STEPHEN MOORE. “DE GUSTIBUS; The Bare Necessities: A Generation Tries to Imagine Life Without iPods.” The Wall Street Journal (Fri., March 14, 2008): W11.
(Note: ellipses added.)
The video is:
Carey, Drew. “Living Large: The Middle Class.” reason.tv Posted February 8, 2008.