Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Sunday, January 19, 2020

The Democrats Take California's Fratricidal AB5 National

California Democrats are nothing if not persistent in their virtue-signaling nonsense. California's AB5, an existential threat to the gig economy when it passed, was ostensibly aimed at Uber and Lyft, two companies the left has suddenly started hating (except when they use those services). Author Lorena S. Gonzalez has been in explaining-the-benefits-to-people-she-screwed-over mode for a while now, as shown by this exchange back in December:
Because Gonzalez is smarter than the people who want side hustles and must save them from themselves, or something. This experiment has gone so well that the truckers have managed to get the courts to delay enforcement of AB5 (sadly, only for truckers), but freelance writers continue to get the shaft. (That group includes Vox Media writers, many of whom were just terminated.) Gonzalez is absolutely certain of her moral rectitude though, and doesn't approve of freelance writers, like, at all:

One gets the sense, reading such exchanges, that Gonzalez is pretty solidly in somebody's pocket to deflect the daily hectoring implied by the #AB5 hashtag. In fact, you would be right: about half of Gonzalez' war chest came from public employee and trade unions. It really makes you wonder about the calculations that went on behind the scenes:

First Democratic Operative: We really need to do something to reconnect with the working class, do something that really benefits them.

Second Democratic Operative: I know! We'll help private sector unionization! Unions always love the Dems, so it'll be a win-win!

FDO: We'll start with the "gig economy". It keeps people low-paid, and prevents them from becoming real employees with benefits. You know, like Uber and Lyft. <writes AB5>

SDO: Hey, cool, this covers everyone.

FDO: Even freelancers? Cool. Margarita time!

Not content to stop at California's borders, Team Blue is now expanding this disastrous nonsense nationally. Daily Kos has a good story on the matter, which explains that apparently the AFL-CIO wrote AB5 (though the evidence is pretty thin on that subject). At issue is an obsolete test for who should be classified as an employee:
It’s enraging that Democrats are taking this career-killing stance from sea to shining sea, given that Tom Perez himself, the current head of the Democratic National Committee, already showed America’s lawmakers how to attack the worker misclassification problem during his tenure as Labor Secretary under President Obama—and did so without the draconian language that’s in these state and federal bills.

Perez achieved that goal by using the existing Internal Revenue Service test to determine who is, and is not, an independent contractor. That approach worked just fine. If every state adopted the IRS test, too, then the states and federal government would be in alignment. A bad-actor company caught misclassifying workers anywhere would automatically be breaking the rules everywhere, and could be fined everywhere, too, as it should be. At the same time, people like me, who prefer to work as independent contractors, could continue to do so, because we can pass the IRS test.

Instead, what’s happening now is an attempt to eliminate the existence of independent contractors, including those of us who are operating lawfully under the IRS test. At the core of each of these bills is an overly tough test to determine who can, or cannot, legally be defined as an independent contractor. This test is known as the ABC test, and was written back in the 1930s to reflect the workforce of the Great Depression. It is different from the test that the IRS now uses, and it makes it impossible for many lawful, happy, thriving independent contractors to remain that way in the economy of 2020, when the world looks a lot different than it did back when Americans still listened to Jack Benny on the radio for entertainment.
It really appears that H.R. 2474 is suicidal for Democrats, who are more beholden to labor than they should be as a constituency, given that only 14.7 million private sector workers belong to unions. It's hard to see how Uber and Lyft will change this, nor how terminating freelance writers would improve union membership. Gonzalez's stubbornness is understandable given her backing. National Democrats' press to extend this incredible blunder is not.

Update: H.R. 2474 apparently would repeal Taft-Hartley, meaning states could no longer choose to be right-to-work states; all states would have to provide for closed shops.

Thursday, October 10, 2019

California’s Toothless Statewide Rent Control Law

Suppose you were a progressive rent control advocate, and suppose you were an idiot — but I repeat myself. California‘s legislature, now in full thrall of the loony left, has lately passed a statewide rent control law, with all the predictable consequences thereof:
Economists and other policy experts have long criticized rent control for reducing the supply and quality of rental housing in the long-run. California's rent control bill is no exception says Michael Hendrix, state and local policy director at the Manhattan Institute.

"What we are going to get is a reason for landlords to convert apartments to condos," says Hendrix. "The net result of that is potentially more units being taken off the market, and long-term this housing crisis getting worse, not better." Hendrix argues that landlords, when faced with limits on how much they can raise their rents, will simply take their rental units off the market, converting them into condominiums that can be sold at market price.

A study of rent control in San Francisco published in the journal American Economic Review this month found that "while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law."
Economics? Bah, say the progressives who imagine themselves smarter (or at least more virtuous) than landlords. Gavin Newsom cashed in on that sentiment when he tweeted his support for the measure:

Of course, what makes this interesting is what precipitated the measure: rapidly rising rents. The bill caps increases at 5% plus inflation. So, how fast was rent rising in California overall? I looked at my former home turf of Orange County, and found this:

So, if we look at the Orange County figures as typical (they probably aren’t, the slope on the other two markets is slightly higher, and the LA County figure is about 31%), amortizing this backwards over the eight years covered in this graph, the annual average rent increase is 2.5%. In steeper Los Angeles County, the average annual rent increase is 3.8%. All of which is to say, the rubes have been conned again, just as they were in Oregon, which has a crazy high 9.9% annual rent increase limit.

Sunday, July 16, 2017

Bullety Stuff, Sunday Edition

Saturday, January 21, 2017

Saturday Bullets

  • Hey, didja know that penises and vaginas are a social construct?
    Fine is a sure guide to the science, building up complexity without sacrificing clarity. By the time she’s finished, any lingering confidence that hormones exert a simple dose-response influence on our behaviour is thoroughly done for. Instead, testosterone works in intimate concert with relationship structures – a blow to its dignified reputation as the singular, commanding “male hormone”. Even something as incontrovertibly binary as our male and female genitals is shown to be part of a complex cultural system. As Fine says, “it’s the genitalia – and the gender socialisation this kicks off – that provides the most obvious indirect developmental system route by which biological sex affects human brains”.
  • Now that Trump is president, even journalists can apply critical thinking skills again.
  • Editors, please.
  • Econ 101 still works, no matter how much "living wage" advocates wish otherwise.
    The real impact of the minimum wage, however, is much less clear than these talking points might indicate. Looking at historical experience, there is no obvious relationship between the minimum wage and unemployment: adjusted for inflation, the federal minimum was highest from 1967 through 1969, when the unemployment rate was below 4 percent—a historically low level.
    If you use general unemployment as a basis for your comparison (the real problem is specific unemployment among the low-skilled), you've already failed to address the argument.

Friday, September 4, 2015

Repost: A Brief Look Into "Not In Labor Force" Statistics

Originally posted June 2, 2012.
 
One of the stronger arguments made by Reason regarding the nature of the late recovery has been that the unemployment figures are padded downward by decreases in the labor participation rate. That is to say, a reduced labor pool also reduces unemployment. As an example of this, imagine you have 15 people, eight of whom are employed, five of whom are "not participating in the labor force" for whatever reason, and two of whom are unemployed but looking. This means the unemployment rate in this group is 20% (2/10). But say one of those unemployed people becomes discouraged and stops looking for work. They now are part of the "not participating" group, and now unemployment becomes 1/9, or 11%. With only a definitional change, unemployment has been nearly halved, and so we apparently see a similar sort of thing going on with BLS data.

I wanted to look more closely at the labor participation rate, which in turn is based on the "not in labor force" numbers (NILF hereafter). The BLS keeps four different subcategories of NILF data in addition to the overall total, but the BLS data seems to treat them all as subcategories of "want a job if they could have one", so I will do the same. (If I'm misreading this, please let me know.)

The upshot of this is that while the "Want A Job Now" pile does indeed continue to grow, the overall "Not In Labor Force" figures are growing even faster, and is on a fairly consistent ascent. One likely cause for this is the retirements of the Baby Boom generation, which would have been foreseeable. Indeed, Dean Calbreath alerted me to this possibility in another discussion when in 2002 the BLS projected this very scenario (PDF).

So what's the takeaway from all this? It's not clear to me. On the one hand, if the bulk of the increase in non-participants were from the "want a job" pile, the answer would be quite obvious: they've become stymied by the poor labor market. On the other hand, even if we assume that 100% of the growth in the rest of NILF is a function of retirees, that's a lot of people to be taking out of the labor market, and presumably, people who are at or near the peak of their earning potential. From a productivity standpoint, that means you've lost their brains in the work force; from a spending standpoint, they're downshifting their spending to match their newer circumstances. Neither are particularly good for the economy.

Update 6/7/12: One additional thought, something I should probably research: among the NILF, how many are really discouraged workers who are counted as retirees? Given what we know about how little Americans are saving for retirement, I do wonder whether a lot of baby boomers wouldn't take a job if they could find one, but because they are officially (and permanently) retired they don't count as being part of the labor force.

Wednesday, August 26, 2015

Wednesday Links

  • Leading off with the fantastic news that bioethicist Alice Dreger has resigned from Northwestern under charges that the university refuses to grant her the academic freedom they supposedly support. Her resignation letter (PDF) details the complaint that dean Eric Neilsen demanded editorial control of her work on Atrium, and even formed a "censorship committee" to oversee future issues:
    The plain and simple fact is that Dean Neilson acted impulsively and wrongly in this situation. We all make mistakes, but this was a profound mistake that cut to the very heart of academic freedom. It should have been acknowledged and corrected immediately. That is most definitely not what happened. Instead, what happened was denial, avoidance, blame -­‐ shifting, and evasion. To this day, the university has not admitted its mistake, and it has not affirmed its commitment to academic freedom in a way that makes clear that similar incidents will not occur in the future. This failure should be embarrassing to an otherwise great university.
    Also, a high five for her exit tweet:
  • LAist recently ran a story on driving for Uber or Lyft as a woman. Surprise! It's actually mostly pretty good:
    [Ashley] Moon said, "I've only had one awkward situation with a man I picked up in Culver City while driving for Lyft. He was making really sexual and inappropriate comments about my body, his body, and his girlfriend's body who we were on our way to pick up. But I didn't feel like I was in danger, mostly because he was SO drunk that he was completely slumped over in my front seat and heavily slurring his words. I thought he might have alcohol poisoning."
    One anonymous driver reported "Truthfully, I dealt with more inappropriate behavior when I was a bartender." Lyft in particular allows drivers to drop passengers before their destination if the driver feels endangered (something Uber doesn't), so they're a little better. But it's interesting to read these anecdotes, which include drivers giving relationship advice, picking up weird passengers, and more.
  • Remember Laurie Penny? I guess she's still out flogging her rage-tome, Unspeakable Things, which, according to those not part of her hallelujah chorus, draws from her Guardian (UK) and other online columns so much it's indistinguishable from them. Well, good news, fellas: feminism needs to find room for men!
    As Penny herself says, "women are only allowed to be experts on gendered things and nothing else, whereas that's the one thing men aren't supposed to talk about.
    Of course, men aren't allowed to have any actual differing opinions about intersex relations, because
    Men are our fifth column in all male spaces. Particularly when so many boardrooms and political meetings are all-male spaces, men can be very useful fighting in that arena.
    So nice to know men's only purpose as far as Penny's concerned is to shut up and parrot the party line! Also, reeducating your fellow knuckle-dragging males! Thank you, I'm here all night.
  • Lesbian tendencies appear to go hand-in-hand with masculinization, which apparently means changes to facial features can also predict sexual orientation, which sounds awfully like phrenology. This gives rise to the theory that female sexuality conforms to opportunity to some extent. (H/t @facerealitynow.)

Tuesday, August 25, 2015

Uber, Lyft, And The False Spring At LAX

So we have been here before:
But you can pardon me some skepticism that this is the end. Between state demands to classify drivers for such shared car services are in fact employees and not contractors and changes to state insurance law (at least in California) that will almost certainly raise rates for anyone electing to use their personal vehicle for such commercial purposes (that is, if the insurers get hold of their Uber driving habits, which seems inevitable), the car services have a lot of people gunning for them. They have big enemies, and thus far, the Silicon Valley upstart does not seem inclined to spend lobbying money accordingly.

Wednesday, August 12, 2015

No, Freddie, Kickstarters Aren't A "Swindle" (Necessarily)

Fredrik deBoer has a rant up about the sequal to the PC game Divinity: Original Sin (unimaginitively titled Divinity: Original Sin II), which is being published, as its predecessor, as a Kickstarter. DeBoer, who so far as I have ever known, has never run a company or had to manage assets, calls this a "swindle":
Let’s be 100% clear about what this is. This isn’t fans helping the little guy out. This isn’t charity. It’s not the townsfolk banding together to save the local community theater. It’s a for-profit company that just had a very successful product placing the financial risk of their next product on the people they’re going to be selling the product to. Once upon a time, in ye olden days, corporations that wanted a chance to make profits also had to accept the risk of a failed product. Now, hey, just crowdfund; place the risk burden on the very consumers that you want to wring profits out of in the first place! What could go wrong? Typically, criticism of crowdfunding turns on the possibility of failed product launches, such as in this great Gideon Lewis-Kraus piece on an overly ambitious coffeemaker, or the ubiquitous risk of out-and-out fraud. But I find these successes more disturbing: why not just keep going back to the well, no matter how profitable your company is, and reap the profits free of risk?
 No, not free of risk; we don't know, specifically, how much (if any) of their own capital they're putting into the product. But even if that figure is zero, deBoer's argument comes around, essentially, to "for historical reasons", i.e. because a thing has always been done a certain way, it must always be done in the future the same way. But even this utterly ignores the existing real-world examples in which customers put up risk capital in exchange for future goods and services: magazine subscriptions, community supported agriculture, even good faith money on building construction. Instead of Kickstarter supporters being patsies, as deBoer asserts, they're helping the creators mitigate risk and thereby aid in the creation of products those customers want. A great example of this mitigation was the highly successful Exploding Kittens card game; as Ben Kuchera in Polygon wrote,
If Exploding Kittens' creators wanted to print 420,000 copies of the game and ship them, hoping they would sell, the project would cost around $6.3 million, with no guarantee of return. Using Kickstarter allowed them to not only promote the project, but use sales to fund the game's creation, removing that risk and allowing them to increase the profit margin.

While everyone involved with Exploding Kittens will likely earn a very nice payday, the number of copies sold and the profit made from them won't be ridiculous; a better word is meaningful. Kickstarter allowed them to scale expectations and sales while removing much of the upfront cost and risk. It's not a perversion of the crowdfunding model; it's a great example of a team using it well.
Now, is that to say Kickstarters always work? No, of course not. One particular example that some friends got burned on was a proposed biopic of the dog trainer Dick Russell, Dog Man; reading the team's biographies, the title "producer" nowhere appeared at the time. (It is a separate job for a reason.) There's clearly interest in highlighting such failures, as for instance this spreadsheet documenting all game launches funded for $75,000 or more, or Kickfailure, a website dedicated to documenting notable failures. But none of these mean that Kickstarted projects are intrinsically fraud, or amount to exploitation of the customer (save for cases of fraud or incompetence).

Tuesday, August 4, 2015

The Tragedy Of The Google Commons

The tragedy of the commons is that responsibility is divorced from individual profit, i.e. there's no feedback loop telling you to stop grazing your sheep because it's destroying the pasture. Large corporations have a similar problem internally with resource allocation, particularly ones as intrinsically entrepreneurial as Google (or as entrepreneurial as Google would like to think itself); with so many potential projects, which ones do you back? And how much? When none of these small projects are themselves expected to turn a profit, answering those questions is impossible.

This was my thinking process when reading Ars Technica's fascinating article about the Google stripping Google+ from everything in sight. Started in 2011 as a belated and somewhat panicked reaction to Facebook, it's frequently (and accurately) described as a ghost town. Google started this process with the rollout of the confusingly named Google Photos, which replaced the better and similarly-named Google+ Photos. Likes? Usable albums? Full size images? Who cares? It's almost as if Google had no interest in the quality of their offerings, and was run by some schizophrenic emperor with ADHD. As Ron Amadeo points out in Ars, it wasn't the first time Google torpedoed a much-used product in favor of something no one wanted: Google Reader, an RSS-driven blog aggregator, got killed in favor of the pointless and short-lived Google Buzz, which itself exited this veil for Google+ after only two years. Google Hangouts, their instant messaging app, "feels like one of the most unimportant and poorly backed products at the company" and is "so poorly supported that making fun of it has practically become a meme in the Android community". It echoes Microsoft in mobile telephones, a market they were never able to crack, as evidenced by a string of failed, short duration marriages. That included, most recently, a $7.6 billion writedown of its Nokia acquisition along with 7,800 layoffs. Making billion dollar bets is hard, but smaller bets are no easier, especially when neither are tied to your core competency.

Monday, June 15, 2015

Minimum Wage: Shot & Chaser Edition

Shot: Anybody remember this, back in February, 2014?
In a surprising move, Gap Inc. informed its employees on Wednesday that it would set $9 as the minimum hourly rate for its United States work force this year and then establish a minimum of $10 next year.

Gap said this move would ultimately raise pay for 65,000 of its 90,000 American employees, including those at Banana Republic, Old Navy and other stores.

Gap is making this move as many states consider raising their minimum wage, and as Republicans and Democrats debate a bill that includes a proposed increase in the federal minimum wage to $10.10 an hour by 2016.

President Obama has endorsed the increase, and has campaigned for it at stops around the country.
Chaser:

Apparel retailer Gap Inc (GPS.N) said it would close a quarter of Gap specialty stores in North America over the next few years, including 140 this year, potentially affecting thousands of jobs as the company struggles with a slump in sales at its namesake brand.

San Francisco-based Gap also said it would cut 250 jobs at its headquarters.

The company did not say how many employees would be laid off as a result of the store closures. As of Jan. 31, Gap had about 141,000 full- and part-time employees in about 3,700 company-owned and franchise stores worldwide.

Monday, April 20, 2015

Monday Links

  • Biology has a role in constructing gender? That's crazy talk! Leading off, a flawed but generally good essay on the social construction of sex at Pacific Standard by Alice Dreger. Excerpt:
    It makes me crazy that some of my feminist friends try so hard to stop their kids from being gender-typical. I have one such friend who has a fairy-princess daughter, and my friend keeps trying to keep her daughter butch, as if she owes this to Susan B. Anthony. I asked my friend, “If your son wanted to wear a pretty pink dress, would you let him?” She turned red and said, “Yes.” I answered, “Then why isn’t it gender-based oppression to deny your daughter a pretty pink dress?”

    ... People who think gender identities, gender roles, and sexual orientations are all socially constructed are the most naive biological determinists I’ve ever seen. They think all human brains are completely without structure when it comes to these things; we all have empty slates in our skulls at birth. No, we don’t! Really!
    She gets into some schizophrenic moments — "The expectation that men will be strong, insensitive, and hornier than women could also be described as a social construction" is more descriptive than "expectation" — but overall a great deal clearer and rational than most of the horrible feminist bilge that contains the words "men are taught to...".
  • Feminists askeered of Christine Hoff Sommers: Pretty much guaranteed that calls for a safe space would result when reform feminist Christine Hoff Sommers showed up at Georgetown to deliver a talk on the state of modern feminism, with ensuing "trigger warnings" and demands for a "safe space":

    Sommers attracts this sort of hysterical overreaction everywhere she goes, as for instance, her Oberlin appearance, which drew out this treacly and self-absorbed letter to the editor, titled (I am not making this up) "In Response to Sommers’ Talk: A Love Letter to Ourselves". Sommers' crime mainly consists of walloping the 1-in-5 rape victims myth, which apparently qualifies as being a rape "denialist" or "apologist", depending on the moment, i.e. a heretic. But what I did not realize is that the specific language has a hidden function, whether or not intended by the original writers: that of censorship.
    If you don't know how the game is played, the new magic word is "unsafe," because if you claim someone is making you feel "unsafe," that sets in motion Title IX protections. That is, if you want to censor someone, just claim not that you disagree with them or find them disgusting, but that they make you feel "unsafe;" then administrators are under legal peril if they do not act swiftly to restore your sense of chill.
    Which of course makes total sense: the point of these insane, childish restrictions is to suppress dissenting views, and if possible, call them names.
  • Becauze "zero tolerance" has worked so well elsewhere: Speaking of paranoia and overreach, Stanford will ban students found guilty of sexual assault as the default punishment. I can't possibly imagine how that would cause anyone problems.
  • When the police are brutalizing neocons, we know things will change: A terrific piece at the National Review on the "John Doe" investigations in Wisconsin that were going on while Gov. Scott Walker worked to limit collective bargaining power (not even entirely!) for public employee unions.
    “I told him this was my house and I could do what I wanted.” Wrong thing to say. “This made the agent in charge furious. He towered over me with his finger in my face and yelled like a drill sergeant that I either do it his way or he would handcuff me.”

    They wouldn’t let her speak to a lawyer. She looked outside and saw a person who appeared to be a reporter. Someone had tipped him off.

    The neighbors started to come outside, curious at the commotion, and all the while the police searched her house, making a mess, and — according to Cindy — leaving her “dead mother’s belongings strewn across the basement floor in a most disrespectful way.”
    Individuals given this "dangerous, heavily armed drug kingpin" treatment — i.e. the sort of thing that happens every day in black neighborhoods — all were Republican supporters of Wisconsin's Act 10, the bill that eventually reigned in collective bargaining for employee benefits. "Don't call your lawyer. Don't tell anyone about this raid. Not even your mother, your father, or your closest friends." Generally social conservatives are pleased to dismiss police abuse in places like Ferguson, MO or North Charleston, SC as either justifiable or atypical, when it is anything but. When the victims are conservatives, perhaps this will give impetus to restraints on police activity and law enforcement more generally from those corners.
  • Republicans vote to axe the death penalty in Nebraska: Utterly astonishing, but a good sign.
  • Women in STEM, Dueling Studies Dep't: Another great essay by Scott Alexander, talking about two utterly divergent studies on sexism and women in STEM. The takeaway seems to be that the two best-known recent studies on the subject, Williams & Ceci 2015 (PDF) and Moss-Racusin et al. 2012, which used similar methodologies but found utterly divergent results. Williams & Ceci have long been a proponent of the idea that sexism largely doesn't exist as a bias in academic STEM fields, as for example their New York Times essay last year, "Academic Science Isn’t Sexist". Neither strikes me as compelling to partisans of the other side (see, for instance, this piece at Slate attacking the W&C study).
  • Progressive Policies + San Francisco Real Estate = Gentrification: I wrote a little bit about this here whilst taking a jab at Model View Culture's apparent ignorance about the consequences of renting, but Coyote Blog has a great post up about how progressive policies drive real estate prices to the moon in that city while making rental units all but impossible to find. This is basically a function of three simultaneous and converging thrusts:

    1. Vertical caps (building upward).
    2. Population density caps (a function of #1, in part).
    3. Rent caps (rent control). This now, lately, extends to Airbnb and other short-term rentals.

    Rent control appears to be only somewhat in force there, as it is in Los Angeles, because how else are older, more established tenants getting evicted as per Model View Culture? According to this page, it appears rent control only operates if the property was built before 1979. (Am I weird to wonder if some landlords might hope their units get knocked down in an earthquake?)

Sunday, March 1, 2015

Most People Escape Minimum Wage Quickly

I frequently enough encounter this trope that it's worth rebutting at some length:


This is supposed to make a case for improving the lot of those in this world making minimum wage by raising it. The truth, however, is vastly more interesting. For this, we turn to the Bureau of Labor Statistics research on minimum wage employees (PDF), wherein we find slightly more than half (50.4%) of all such workers are under 25 years old. This is actually very good news, because it points to a crucial fact: most people get off the minimum wage early in their careers. To see why this is so, it's necessary to look at the labor force population by age bracket (available here as Civilian Labor Force, numbers as of January, 2015):
If half the minimum wage work force is in the left two brackets, it means the balance must be distributed among the others, and therefore less numerous in each one. In fact, only 1.6% of hourly employees older than 25 make minimum wage — or less! (How can that be?) Minimum wage work affects only a tiny number of people.

See also: this Pew Research piece.