By Simon Grey, on February 7th, 2012
The wages of federal workers are 2 percent higher than similar private-sector workers, on average.
The benefits of federal workers are 48 percent higher than similar private-sector workers, on average.
The total compensation (wages plus benefits) of federal workers is 16 percent higher than similar private-sector workers, on average.
I guess the relevant question is this: are federal services so efficiently provided and in such high demand that federal employees are truly deserving of a 16% wage premium? If not, federal employees are definitely overpaid.
An alternative question is this: would federal employees be paid as well for doing the same job in the private sector? If not, federal employees are overpaid.
By Christopher Briem, on January 25th, 2012
OK… listen up. Nabobs especially. Latest job counts are out and for December we again have a peak in terms of the highest December job count for the Pittsburgh region ever.
Only May and June of 2001 showed a higher job count than the 1,164,000 raw number just out. So the middle of construction season then when I think there were a few big constuction projects pushing up the data (and before USAirways employment imploded of course). Seasonally adjusted the first part of 2001 had some slightly higher numbers.
So we will call it the post-USAirways peak.
and yes.. just a side story to that number may be the warm weather permitting more construction than is typical to continue through the season.
By Simon Grey, on January 25th, 2012
Parlier earns about $13 an hour. She’d like to become one of the better-paid workers in the plant, but, in today’s factories, that requires an enormous leap in skills. It feels cruel, Davidson writes, to mention all the things Parlier would have to learn to move up. She doesn’t know the computer language that runs the machines. “She doesn’t know trigonometry or calculus, and she’s never studied the properties of cutting tools or metals. She doesn’t know how to maintain a tolerance of 0.25 microns, or what tolerance means in this context, or what a micron is.”
A good attitude and hustle have taken Parlier as far as they can. It’s hard, given her situation, to acquire the skills she needs to realize the American dream.
But skills aren’t always necessary. A dumbed-down UI can serve as a substitute for knowledge, particularly if a firm can hire a technician to know the technical aspects of the technology in use so other workers don’t have to. In fact, the trend of technology has generally been to serve as a substitute for knowledge and ability. Why learn Trig if you can run a fairly simple program on a computer?
Anyhow, this story is evidence of my claim of a technology gap. If labor were allowed to compete freely in a deregulated economy, technological growth would be slower and technological innovations implemented less frequently. This in turn ensures that labor is not stagnant or regressive, and also gives less intelligent laborers a chance to remain on the market longer as technology remains relatively expensive. In order to make technology more appealing, then, technological innovators will find it useful to dumb down the UI to make the device more readily accessible by lower-intelligence labor.
The point in all this, then, is that the government has basically set policies in place that pulls demand for technology forward, leaving less-intelligent laborers in the lurch. And since less-intelligent laborers tend to also be poor, it can be said that the government hates poor people.
By Simon Grey, on January 16th, 2012
Supporters of stronger intellectual property enforcement — such as those behind the proposed new Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) bills in Congress — argue that online piracy is a huge problem, one which costs the U.S. economy between $200 and $250 billion per year, and is responsible for the loss of 750,000 American jobs.
These numbers seem truly dire: a $250 billion per year loss would be almost $800 for every man, woman, and child in America. And 750,000 jobs – that’s twice the number of those employed in the entire motion picture industry in 2010.
The good news is that the numbers are wrong — as this post by the Cato Institute’s Julian Sanchez explains. In 2010, the Government Accountability Office released a report noting that these figures “cannot be substantiated or traced back to an underlying data source or methodology,” which is polite government-speak for “these figures were made up out of thin air.”
Of course, the main problem with the above “analysis” is that it assumes labor roles are static (i.e. people can’t find a new job). In a sense, it presents a false dichotomy between having a job that’s properly protected by IP or being unemployed. Since one can generally find or make a new job in the event of losing one, it stands to reason that the prior dichotomy is simply false.
Beyond that, though, there seems to be no accounting for the role technology plays in cutting down IP-related jobs. For example, iTunes and other digital file services have largely negated the need for the manufacture of compact discs, cassette tapes, and other forms of physical music media. Netflix, Hulu, and other video services have undermined the need for the production and distribution of DVDs and other forms of physical video media. IP rights are properly integrated into these business models, so any decline in media manufacturing jobs is due not to piracy, but to technology.
This, incidentally, is a good thing, since the decline in media manufacturing jobs now frees up some labor segments to do something more productive. Lowering the cost of production and distribution (while maintaining or increasing consumption volume) by cutting labor is how wealth is created. Freeing up labor to do something more productive is how wealth is created.
Finally, one other thing ignored by this analysis is the positive role that so-called “piracy” might have on the various IP-protected industries, particularly music. The costs and risks associated with purchasing entertainment (over time, the cumulative costs can be quite substantial, and there is no guarantee that you will like what you buy) discourages purchases. By offering entertainment for free, as is done in broadcast television, people don’t have to invest much to see if some type of entertainment will be valuable to them. If it is, they can support it more; generally by buying DVDs and tie-in merchandise.
This is also true of music. If people can acquire music for free, they can see if they like it. If they do, they might be inclined to purchase tie-in merchandise or go to live shows (where the bulk of bands make the bulk of their money anyways).
Thus, it can be said that protecting IP by enforcing monopolistic policies actually hurts media producers because it discourages people from ever sampling new media, which in turn kills the sales of tie-in merchandise and other forms of related sales. This is just a theory (based on personal experience); there is no data supporting this view.
Anyhow, the point in all this is that there is absolutely no evidence that IP piracy hurts the economy in general, or even fields that enjoy the most IP protection. In fact, it may be that IP piracy is beneficial. At any rate, the idea that the united states’ economy needs stricter IP laws is simply ludicrous.
By Simon Grey, on January 12th, 2012
But, in the first study of its kind, the MAC – set up by the last Labour government, and independent of Whitehall – said large-scale immigration was having a significant impact on the job prospects of the ‘native’ population.
The report, which follows years of controversy over whether immigration leads to fewer jobs for British workers, showed that every increase of 100 foreign-born working-age migrants in the UK was linked to a reduction of 23 Britons in employment between 1995 and 2010.
Between 2005 and 2010 alone, the number of working-age migrants in employment rose by 700,000 and displaced 160,000 British-born workers, it said.
As can generally be expected, increasing the supply of something—in this case labor—without a similar increase in demand for that thing will generally lead to lower prices. When there is a price floor of sorts (minimum wage, workers’ rights, etc.), the better labor will win out at the margins, which is what appears to have happened here. Since those who decide to emigrate usually tend to be of a rather hardy stock, it should come as no surprise that they are often viewed as marginally better labor, and, as such, get hired more often. And it should also come as no surprise that the marginally superior laborers (immigrants) are offered jobs that would otherwise be offered to natives.
But more than that, it is philosophically consistent to support both free trade and free labor, as the arguments or them are rather similar. The problem, though, with both free trade and free labor is that domestic regulation of both tends to discourage domestic production/producers. As such, both free trade and free labor operate essentially as foreign subsidies. However, free labor is the more pernicious of the two seeing as how it not only undermines domestic production, but also domestic culture, what with the sudden influx of people from other cultures. Ad while people from another culture may enjoy the consequences of living in another culture, this is no guarantee that they will ever do anything but support and further their original culture.
The lesson to be learned from this is that free labor—or even limited regulation—is not particularly beneficial for the native population, economically. As such, it can reasonably be said that any politician who advocates an increase in immigration, tolerance for illegal aliens, or otherwise promotes the migration of foreign workers of any sort is one who is ignorant, hates his country, or is simply stupid.
By Simon Grey, on January 3rd, 2012
As demonstrated in this example of mechanization:
I’m in Chicago at my Mom’s place for Christmas, and over dinner last night we were talking about Race Against the Machine and the steady pace of automation (because what else do I talk about these days?). She and her husband Gene told me that the Walgreens in their neighborhood didn’t have any human cashiers any more.
I told them they must be mistaken. I’ve seen plenty of self-checkout stations, but they’ve always been accompanied by at least one human cashier to accommodate customers who for whatever reason — unfamiliarity, techno-fear, the desire to chat, whatever — don’t want to deal with a machine. I assumed the same would be true at this Walgreens. Mom and Gene were adamant that it was 100% self-checkout, so we got bundled up and walked over to get the straight dope.
They were right and I was wrong. There are six NCR self-checkout kiosks at the entrance / exit, and no cashiers at all there. There are human cashiers at the photo lab and the pharmacy and customers can take their purchases to these two locations if they want, but at the main checkout area you can’t get rung up by a person any more.
This goes back to something I wrote about a month ago. The tendency in the free market is for labor to become of an increasingly higher order. Note that this is not an immutable economic law so much as an ex post observation. There is no reason to believe that this trend will continue, save for the purpose of thought experiments.
At any rate, the historical trend demonstrates two things. First, as intellectual capital increases, humans have a tendency to mechanize labor. The cotton gin and mechanical harvester are early examples, and the robotic assembly line and aforementioned cashier are more recent examples. The problem with machines, though, is that for all of their advantages they still aren’t perfect. They generally need maintenance of some sort and occasionally fail. Fixing machines, for the time being, requires human involvement.
This problem is generally solved first by increasing pay for those skilled at maintaining and repairing machines and then eventually simplifying the operation and maintenance of said machines so as to tap into unskilled labor (which the machines initially replaced). Basically, then, machines are a net benefit in the long run because they enable humans to capitalize on a broad set of intellectual capital via higher order labor. As such, one need not be a Luddite for economic reasons, as the market generally does a good job of solving the problem of labor displacement.
By Christopher Briem, on December 27th, 2011
So in the spirit of the end of year retrospectives we will be having all week this came to mind. In October I pointed out that for the Pittsburgh region, it was the highest employment count for an October ever. Same for November. Following from that, I was thinking a bit about some analysis by the folks at the parent of the business times which showed Pittsburgh among a small set of regions that are at their decade high employment peaks.
That analysis might be misread a bit. It is not that Pittsburgh is among the top employment gainers over the decade. We are one of a few regions currently hitting their decade high peaks. Lots of regions have had more growth over the decade, but many have dropped a lot from those peaks in recent years. In lots of ways it is a reflection of the relative stability here, not a lot of job growth.
So I made a graphic of the employment change for the 50 largest MSAs (currently, by employment) over the last decade. So with November 2001 as a baseline, below is what those trends looks like; Pittsburgh is in red. It works out, and I calculated this explicitly that Pittsburgh is in a sense the single most stable employment time series among all 50 regions. Stable as defined by the difference in this time series between the peak and trough over the decade. The difference between the peak and trough for Pittsburgh works out to 6.67 across the decade, which works out to the lowest range for any of the 50 regions.
By Christopher Briem, on December 23rd, 2011
Let me make some introductions. Data meet news, news meet data.
I just caught this headline.. but the Patriot News had article over the weekend: Marcellus Shale industry brings ‘tsunami of jobs’ to Pa.. which really was more of an anecdotal story focused on a woman getting a job in the drilling industry here in Pennsylvania.
Yet below is what the state’s own data days about women working in Pennsylvania in these industries. I’ve seen virtually no news that really looks into just how one sided this looks. Given the coverage like above, you might think it was a tsunami of jobs for women. Maybe someone wants to go the next step and work out similar gender breakdowns for new hiring in the same industries in say Texas and Oklahoma and see how Pennsylvania compares.
New Hires by Gender in Mining, Quarrying, Oil and Gas Extraction Industries
Pennsylvania, 1st Half of 2010
Source: LEHD, which is a collaboration of state labor agencies and BLS.
By Simon Grey, on December 22nd, 2011
So what are the best bets when buying student debt? Technical schools. Students pay the least for their education with the potential to make good money after graduation in only a couple of years.
By that arithmetic, technical colleges come out on top, Mr. [Daniel] Ades said. “We’re in a skills based economy and what we need is more computer programmers, more [nurses],” he said. “It’s less glamorous but it’s what we need.”
Meanwhile the nation’s law schools continue to over-supply the nation with lawyers. Law students are borrowing an average of $68,827 at state schools and $106,249 a private schools only to add to the glut of barristers.
In what must undoubtedly be a shock to humanities majors, people who are actually know how to do useful things are in position to make money after they graduate. Imagine that.
Of course nurses and programmers are going to be in a position to make good money, mostly because people want to not be sick, maim, or injured, and they also like to be able to use electronic gadgets. Hence the reason why students who graduate from technical schools with degrees in nursing and programming are in a better position to be employed than, say, an English major. As fascinating as Faulkner undoubtedly is, being able to expound upon his work at length is not something many consumers really want to pay for.
As such, it should no surprise that people who learn actual, useful skills in college are in a better to make money than those who majored in something that is considerably less practical.
By Christopher Briem, on December 19th, 2011
Well, in Ohio there is certainly more debate over the economic impact of shale gas development. No, that isn’t right, there is debate here, but I can’t say I’ve seen a headline this blunt in Pennsylvania.
See the Cleveland Plain Dealer over the weekend: Shale gas will not create 200,000 Ohio jobs by 2015, Ohio State University says of industry. Not only that, but here is what it says about the jobs created in Pennsylvania:
“We estimate that Pennsylvania gained about 20,000 direct, indirect and induced jobs in the natural gas industry between 2004-2010, which is a far cry fewer than the over 100,000 jobs reported in industry-funded studies (and the 200,000 expected in Ohio by 2015),”
Hmm… I guess if I had to start to judge which numbers are closer to reality, I would first look at what backgrounds the various authors have in regional economics and employment research.
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