American Conservative: Raise The Minimum Wage

The American Conservative, a magazine founded by Pat Buchanan, is running a report calling for an increase of the minimum wage to $10-$12 an hour, nation wide. The report wasn’t written by the magazine’s own staffers, it’s a report from written and originally published by a think tank called The New America Foundation, which I’ve generally associated more with progressive causes than conservatism.
Full Story: The American Conservative: Raising American Wages…by Raising American Wages
I won’t go into the paper itself here, though I worry that small businesses might not be able to absorb that sort of brunt increase in wages, and I’m hardly a fiscal conservative. What’s interesting to me is this particle edge of the right that seems to be coming around to much of what the left has been saying for some time now (it reminds me of seeing liberals end up as conservatives during the Clinton years and following 9/11).
American Conservative has published a few other pieces that veer into this territory over the past few years, including an article saying that Hispanics don’t commit more crimes than whites, one on the revolt of the rich and the co-architect of Reagonomics Bruce Bartlett’s article disavowing Reagonomics, saying that Paul Krugman was right and that the Republican Party has lost touch with reality.
Previously:
New York City Fast Food Workers Go On Strike, Demand $15 An Hour
Who Makes More: A McDonalds Manager Or a Skilled Machinist?

Who Makes More: A McDonalds Manager Or a Skilled Machinist?

Adam Davidson writes for the New York Times:

Throughout the campaign, President Obama lamented the so-called skills gap and referenced a study claiming that nearly 80 percent of manufacturers have jobs they can’t fill. Mitt Romney made similar claims. The National Association of Manufacturers estimates that there are roughly 600,000 jobs available for whoever has the right set of advanced skills.
Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he would hire as many skilled workers as show up at his door. Last year, he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour.
The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages.

Full Story: New York Times: Skills Don’t Pay the Bills
Good comment from someone on Hacker News:

I think it is important to note that the fast-food jobs with comparable pay are low level managerial positions, not entry level ones. You can start working for minimum wage at a fast-food job without any previous experience and/or skills. These jobs require very little training, and allow employees to add value almost immediately (and well before promotion to the $15-$20 an hour positions).
Contrast this to the skilled manufacturing jobs which require up front experience. Though many blue collar fields offer entry-level positions with on the job training, apprenticeships, and opportunity for advancement, this doesn’t appear to be common practice in manufacturing. Why not? I think the main reason is that it is very hard for a low skill worker to add value to a manufacturing company. There aren’t any comparable entry-level positions that allow the employee to learn while still being productive.
Because of this, hiring an unskilled employee for the purpose of training them is a huge risk, since it requires a significant investment. And since this industry is already very unstable with razor-thin margins, it’s not something many employers seem willing to do, which is unfortunate.
So maybe the solution is coming up with better training programs, so that manufacturers can hire new employees without taking on such large risks?

Other commenters discuss the paths from low-skilled labor to high skilled careers within a company that have been followed in the past. Are those days truly gone?
Previously: Even (Relatively) Low-Skilled Jobs Are Going Unfilled

Alternative Currency Thriving in Greece

Yet another example of alternative currency thriving in a collapsed economy:

What rules the system has are designed to ensure the tems continue “to circulate, and work hard as a currency”, said Christos Pappionannou, a mechanical engineer who runs the network’s website using open-source software.
No one may hold more than 1,200 tems in the account “so people don’t start hoarding; once you reach the top limit you have to start using them.”
And no one may owe more than 300, so people “can’t get into debt, and have to start offering something”.
Businesses that are part of the network are allowed to do transactions partly in tems, and partly in euros; most offer a 50/50 part-exchange.
“We recognise that they have their fixed costs, they have to pay a rent and bills in euros,” said Pappionannou. “You could say that their ‘profit’ might be taken in Tems, to be reinvested in the network.”
Choupis said she thought the network would have grown even faster that it has if people were not so “frozen, in a state of fear. It’s like they’ve been hit over the head with a brick; they’re dizzy. And they’re cautious; they’re still thinking: ‘I need euros, how am I going to pay my bills?’ But as soon as people see how much they can do without money, they’re convinced.”

The Guardian: Greece on the breadline: cashless currency takes off
(via Brainsturbator)
The real question is not whether these types of systems work during times of economic crisis, but how they can persist once organizations like the World Bank step in to “restore order.”
See also: The New Currency War.

Nomad Economics and E-Commerce


My old friend Abe Burmeister was interviewed about the philosophy behind his company Outlier by Dan Gould for PSFK:

A few hundred years ago most products were sold directly from the maker to the user. If you wanted forks and knives you went to a silversmith. To get shoes you went to a shoemaker. The industrial revolution exploded all that, and gradually layer upon layer of wholesalers, distributors, buyers and salespeople have been added into the purchasing process. In the end you often find dozens of people separating the designers from the end users.
The internet has the potential to explode this game, but perhaps more importantly it also provides an economic incentive to. Most of those layers separating the designer from the user are layers that raise the price of the product and reduce the profit margins of the manufacturer. Gut out the layers of wholesalers and distributors and you wind up reducing the price of products and making more money at the same time. But to do this requires boldly throwing out the old business model. Of the established companies, Apple is close to the only large one confident enough to do it.
One of the craziest things about selling design on the internet is that there are no sales people. Not only can you eliminate layers of middlemen between the designer and the user, but you also eliminate the persuader at the end of the line. All of a sudden the product basically needs to sell itself, and anyone who knows how to google can turn themselves into an expert in hours. It’s a new environment and one in which the designer takes a much more important role in selling the product than they have in the past.

PSFK: The Internet Has Changed the Way We Make Products
This is an application of theory that Abe wrote about in his master’s thesis Nomad Economics. Abe’s very seldom updated blog Abstract Dynamics was one of the best blogs of the early to mid 00s and he’s still one of the most interesting people I follow on Twitter.

When Microfinance Goes Wrong: Over 200 Microfinance Related Suicides in India

The AP reports that it has obtained internal documents that link SKS Microfinance to a rash of over 200 suicides in India. According to a report commissioned by SKS, the company’s employees had verbally and physically harassed borrowers, even going so far as to tell a borrower to commit suicide. One employee watched another borrow drink pesticide in a failed suicide attempt. Another blocked a women with a sick child from going to the hospital, demanding payment first.

Tent Cities Still Spreading Across the U.S.

Here in Portland we’ve had a squatter settlement called Dignity Village since long before the financial crisis in 2008. It was joined by a new downtown settlement last year. But I haven’t been hearing much about the tent cities that have sprung up in Sacramento and elsewhere since 2008.
The BBC confirms that not only have these not gone away, but they have actually been growing:

Tent cities have sprung up in and around at least 55 American cities – they represent the bleak reality of America’s poverty crisis.
According to census data, 47 million Americans now live below the poverty line – the most in half a century – fuelled by several years of high unemployment.
One of the largest tented camps is in Florida and is now home to around 300 people. Others have sprung up in New Jersey and Portland.

BBC: America’s homeless resort to tent cities
(via Acrylicist)

Do Entrepreneurs Really Create Jobs?

Barry Ritholtz has an iconoclastic take on entrepreneurs and job creation:

BI is a digital media property. The print industry (aka dead trees) has been fighting a losing battle versus online competition for years. The print news industry itself is shrinking, while the online industry is growing — but online’s gains are not nearly as large as offline’s losses.
Those 75 jobs Henry mentioned? Twenty-five years ago, they would have been 250 jobs at various newspapers and magazines. Writers, copy editors, artists, printers (Humans, not HPs), etc. The enormous gains in productivity allow far fewer people to do the work formerly employing far more people. This is the inevitable path of technology. Ever since the first human sharpened a stick to hunt, that curve has been the accomplishment of more production with fewer people.
What entrepreneurs actually do is facilitate moving workers from one firm to another — from the less productive business model to the more productive one — as they battle it out in the marketplace.

Economonitor: On Job Creation, Creative Destruction and Technology
(Note: It sounds from Ritholtz’s piece that Blodget is claiming that BI created jobs, but Blodget actually does not claim this. The original piece is here)
I do think that in some cases entrepreneurs create economic opportunity where none existed before – this would especially seem to be the case in the “shadow economy” that thrives in squatter settlements all over the world. But many enterprises now are in the business of destroying jobs through technology. Many more jobs now exist for computer programmers. I benefit from the IT revolution as a journalist in that I rather doubt there would be nearly as many people employed as technology journalists otherwise. But the companies that employ these people, the companies that I cover, are upending entire industries, such as legal services and travel agencies.
In the past we could assume the luddite fallacy was indeed a fallacy. However, reading Race Against the Machine or Slate’s Robot Invasion series it appears that concept may soon need to be renamed the luddite principle.
It doesn’t matter when you were born, we’re all a part of generation sell now. But are we about to turn a corner?

Edge 2011: What Scientific Concept Would Improve Everybody's Cognitive Toolkit?

The Thinker by Rodin
This year’s Edge question was: “What scientific concept would improve everybody’s cognitive toolkit?” There are some good but somewhat boring answers, like Susan Blackmore’s or Kevin Kelly’s. But here are some of the more interesting ones I found:
Stewart Brand: Microbes Run the World
Nicholas Carr: Cognitive Load
Aubrey de Grey: A Sense Of Proportion About Fear Of The Unknown
Jonah Lehrer: Control Your Spotlight
Evgeny Morozov: Einstellung Effect
Jay Rosen: Wicked Problems
Douglas Rushkoff: Technologies Have Biases
Nassim Taleb: Antifragility — or— The Property Of Disorder-Loving Systems
I would especially recommend reading both Carr’s and Lehrer’s.
There are a ton of these, so I haven’t read them all, so there could be some gems out there I missed. What are your favorites?
If I’d been asked, I’d have chosen one of the following:
1. The idea of systematic ideology – that people choose what to believe based on ideology, not reason (an idea also supported by research indicating that facts can actually backfire when trying to change someone’s mind). Systematic ideology, named by George Walford, was proposed in 1947 by Harold Walsby. The idea is now being pursued by the Cultural Cognition Project at Yale Law School, though they don’t use the term and may not be aware of Walsby’s and Walford’s work.
2. The Decline Effect.
Photo by Andrew Horne

The Majority, Including Occupy and the Tea Party, Agree On Top Issues

Zero Hedge sums up the ways in which the majority of the U.S., including both Occupy and the Tea Party, agree on the most important issues:

  • No more bailouts
  • End crony capitalism
  • Prosecute Wall Street fraud
  • End, or at least rein in, the Federal Reserve
  • Respect the constitution and our liberty
  • End perpetual war
  • Make elections fair
  • Keep poison out of our food and water

A Majority of Americans (Including Both OWS and the Tea Party) AGREE on the Most Important Issues … We Just Don’t Realize It
This isn’t to say that health care reform, reproductive rights, immigration reform, and civil liberties for women and ethnic and sexual minorities aren’t important. But with the possible exception of the Federal Reserve issue, these are issues that affect everyone, and both liberals and conservatives can mostly agree on.
I’ve been hoping for some sort of left-alliance with the Tea Party for a long time (and I’ve made my own proposal for a left/libertarian alliance, but given the debt-ceiling debate, it’s not one I think would actually go over well). It may finally be happening. But it’s not an easy proposition, there’s a big clash of cultures.
This is not a trivial challenge. A few years ago Slavoj Zizek wrote in a somewhat meandering critique of both Alexander Bard’s and Jan Soderqvist’s Netocracy and Michael Hardt’ and Antonio Negri’s Empire:

Is it then true that these tendencies (these lignes de fuite, as Deleuze would have put it) can coexist in a non-antagonistic way, as parts of the same global network of resistance? One is tempted to answer this claim by applying to it Laclau’s notion of the chain of equivalences: of course this logic of multitude functions – because we are still dealing with RESISTANCE. However, what about when – if this really is the desire and will of these movements – “we take it over”? What would the “multitude in power” look like? There was the same constellation in the last years of the decaying Really-Existing Socialism: the non-antagonistic coexistence, within the oppositional field, of a multitude of ideologico-political tendencies, from liberal human-rights groups to “liberal” business-oriented groups, conservative religious groups and leftist workers’ demands. This multitude functioned well as long as it was united in the opposition to “them,” the Party hegemony; once they found THEMSELVES in power, the game was over.

This is not, I don’t think, an insurmountable problem, but it must be kept in mind. These conflicts could destroy a coalition.