Hiking the Minimum Wage

President Obama made a surprise call to increase the national minimum wage to $9 per hour. Is that actually a good idea? Becker and Posner took the issue on directly. Becker writes in a measured, but skeptical tone:

The two main issues debated are the effects of a higher minimum on employment of the low skilled, and its effects on the degree of poverty. Both theory and evidence indicate that higher minimums reduce employment for teenagers and other workers with low productivity, and that it does little to alleviate poverty. Neither conclusion, however, is without controversy, especially the employment effect.

He adds at the end that since recipients of minimum wage are also the customers of companies that have to bear the brunt of paying their workers above market rate:  “low-income families are hit by two bullets: some of their members find it harder to get jobs, and they face a higher cost of the goods they consume.”

Posner weighs in with skepticism as well:

The proposal will not commend itself to most economists who study the economic consequences of minimum wages. They make three principal arguments: minimum wage laws reduce employment (and efficient resource allocation) by pricing labor above its market rate; the laws do not reduce poverty, because most beneficiaries of minimum wage laws are not poor; and as a means of reducing economic inequality, such laws are inferior to the Earned Income Tax Credit (i.e., the negative income tax). I will try to assess these arguments.

His conclusion is that,  since we know so little and the proposed increase is so large, we should start with a more modest increase. He also suggests that indexing to inflation is a bad idea:

And I don’t think indexing the minimum wage to inflation is a good idea; should inflation surge, which is always a possibility though not (it seems) an imminent one, an equal increase in the minimum wage might contribute to an inflationary spiral.

I actually found an interesting article by Michigan macro professor Miles Kimball which addresses the controversial employment effect. Kimball cites work by Isaac Sorkin (an incredibly brilliant grad student who started the PhD program at the same time that I did) who explained that the employment effect might be much greater than expected; it just takes a long time to go into effect. A lot of companies engineer their production around assumptions about wage, and when the wage assumptions change (e.g. minimum wage goes into effect), they only gradually move to less labor-intensive production because of adjustment costs. In other words: they don’t go out and buy brand new machines on day 1, they just gradually phase out machines and processes to shift towards using fewer employees. That’s more reason to suspect that a minimum wage hike will do more harm than good, and indexing it to inflation would compound the problem.

And then there’s Greg Mankiw (very respected macroeconomist, but also openly Republican) who asks the simple question: why $9? Mankiw’s point is that if minimum wage is a magic wand to increase the salaries of the poor, why wouldn’t you you jump all the way to $25 (equivalent to the current median income of $50,000 for 2,000 hours/year)? Some mysterious force suggest we shouldn’t go too high, but the President isn’t talking about it. What is it? Good question.

My own take is that it is socially useful to have jobs available that pay less than what a person could live off of, primarily for teenagers to gain initial job experience. You need to have a bottom rung of the ladder, a place where you can go, start a resume, and use it as a launching pad for better jobs. I got my first minimum wage job when I was 14, and I’ve worked ever since: janitor, file clerk, bus boy, dishwasher, etc. I didn’t life myself up  by my bootstraps, so a starter job is not enough. But it does help. Taking that away won’t help anyone. Fighting poverty and reducing income inequality are valid goals, but this is not a valid strategy to accomplish them.

2013 02 19 Minimum Wage

New Times And Seasons Post: Mormonism and Secularism

Today I published my first post there as a permablogger: Mormonism and the New Religion of Secularism. This is the post that I had mentioned I was writing in the Faith Is Rational post from last week. Give it a read!

Edelstein on The Gatekeepers – Shedding Light on Israel’s Secret Service

2013 02 14 Gatekeepers

I love David Edelstein’s reviews, but this one is especially interesting because it deals directly with the Israeli-Palestinian conflict. The documentary The Gatekeepers is based on interviews with six leaders of Shin Bet. Why have they decided to open up at this time? From the review:

They are different kinds of men, but their conclusions are remarkably similar: that a series of repressive and/or opportunistic Israeli politicians have endangered — perhaps murdered — any chance of a lasting peace. That’s right, folks, it’s the spooks taking the long view. You know the Holy Land is an unholy mess when the professional paranoiacs with a license to kill come off like peaceniks.

Fascinating reading.

Religion & Happiness: Heads I Win, Tails You Lose

There’s been a great deal of research on the connection between religiosity and happiness, and the consensus finding is that religious people tend to be happier and to suffer less from anxiety, depression and stress. (Summary via Wikpedia.) I don’t think this necessarily tells the whole story. A study by the Council for Secular Humanism argued, essentially, that if you looked at “resolute atheists” (instead of merely non-religious people) that finding disappears. That seems reasonable, and in my mind the simplest explanation is that people with extreme beliefs are happier because they experience less cognitive dissonance.

But every now and then you’ll find some particularly militant atheist who simply cannot abide the scientific evidence connecting religiosity and happiness. The most recent such eruption occurred on AlterNet a couple of days ago. The basic thesis is this: states with high religiosity have higher anti-depressant use, ergo religion makes people sad. This isn’t a new theory, it goes back to at least the 1990s when Cherrill Crosby wrote an article for the Salt Lake Tribune called “The Ups and Downs of Prozac” in which she implicated Mormonism for making Utah women unhappy. Unfortunately for the decades-old thesis, the doctors that Crosby interviewed wrote a rebuttal stating, in part, that Crosby had decided to:

ignore one of my most important observations: the fact that Prozac is widely used in Utah may be evidence that [psychiatric] treatment in Utah is superior to other parts of the United States which might benefit from increased prescriptions of antidepressants. Epidemiologic studies clearly show that depression is markedly under-diagnosed and under-treated in the United States. How different the article would have been had the author used this point as her underlying assumption!

The photo from the AlterNet article about how religions makes everyone cry.
The photo from the AlterNet article about how religions makes everyone cry.

So, to recap, militant atheists for the last 20 years have chosen to ignore solid, direct evidence that religiosity makes people happier. Instead, they prefer to rely rely on shaky, indirect evidence and unreasonable assumptions to believe the opposite. So much for science, eh?

What’s really telling to me, however, is that this is a win-win proposition for atheist. If religion makes people happy, it’s the opiate of the masses, and atheist depression shows that they are suffering for their integrity. It religion makes people depressed, it’s an oppressive institution and atheist joy shows they are enjoying their liberation from captivity.

If there’s one thing that human beings are good at it, it’s finding a narrative to fit the data that protects their preconceptions. It’s not surprising that religious people do this (after all: isn’t religion just one big story to shield us from our fear of mortality?) but it’s a bit richer in irony to the see the scientific skeptics engaging so brazenly in the same sort of inventions.

(The story about the Salt Lake Tribune and the rebuttal quotes come from the article “Religiosity and Life Satisfaction among LDS Women“.)

Misunderstanding Faith vs. Analytic Thinking

2013 02 16 How Critical Thinkers Lose Faith in GodThis article from Scientific America is from back in May 2012, but I’ve seen it making the rounds today on Facebook, so I thought I’d point out a couple of problems with it very briefly. The article starts by observing that if you encourage people to think analytically, their belief in God falls in subsequent surveys. I don’t question that result, but the article then goes off the rails a bit:

These studies demonstrate yet another way in which our thinking tendencies, many of which may be innate, have contributed to religious faith. It may also help explain why the vast majority of Americans tend to believe in God. Since System 2 thinking requires a lot of effort, the majority of us tend to rely on our System 1 thinking processes when possible. Evidence suggests that the majority of us are more prone to believing than being skeptical. According to a 2005 poll by Gallup, 3 out of every 4 Americans hold at least one belief in the paranormal

Aside from the reference to this characteristic being “innate” (which is spurious, at least given the contents of the article) and the too-easy parallel between supernaturalism and religion, the primary red herring is the implication that System 2 (which virtuously requires “a lot of effort”) is superior. Is it? Is it really a question of just being too lazy to think hard and therefore invariably realize that God doesn’t exist?

Well, try Googling “analytic thinking empathy“. You will find a series of articles describing that analytic thinking suppresses empathy, and that empathy also suppresses analytic thinking. Does this fact complicate the naive assumption that System 2 thinking is automatically superior? To my mind, all this article really demonstrates is that when one starts out with an extreme bias towards sciemtism, one ends up with scientism. Rationality is obviously important, and analytic thinking is valuable. I didn’t get two graduate degrees in analytic disciplines (economics and systems engineering) without realizing that fact. But there’s more to humanity than analytic thinking.

Friday Music: The Killers

I like The Killers. Who doesn’t like The Killers? My favorite song by them, even before I knew what it was about, is Bling (Confessions of a King).

http://www.youtube.com/watch?v=LkfNkdHXX10

2013 02 11 Brandon FlowersIt turns out that the song actually has a concrete meaning, however. It’s “the victorious story of Flowers’ dad forswearing – overnight – alcoholism and Catholicism to become a Mormon when Brandon was five” (Guardian). They lyrics, which are beautiful but far from clear, are even more powerful for me in that context. 

Read more

Tyranny in the United States

2013 02 14 Three Felonies A DayMy father once told me something he had learned from an older friend who had grown up in the USSR. He said that one of the most important tools for a tyrannical government was to ensure that every citizen was always breaking the law. This was one of the benefits of the dysfunctional Soviet economy: everyone had to resort to the black market. That meant everyone was a criminal. And, since Soviet law enforcement knew that, it meant that it was entirely in their discretion to arrest you or not. When anyone can be arrested at any moment, you live in a constant state of fear.

We’re not there yet in the United States, obviously, but the rapid expansion of regulation means we might be closer than some think. In 2011, Harvey Silvergate published Three Felonies A Day: How the Feds Target the Innocent, which argued that on average, each individual American commits at least three felonies every single day without any knowledge that they are doing so.

Now Glenn Reynolds has a new paper out called Ham Sandwich Nation: Due Process When Everything is a Crime. According to the abstract:

Though extensive due process protections apply to the investigation of crimes, and to criminal trials, perhaps the most important part of the criminal process — the decision whether to charge a defendant, and with what — is almost entirely discretionary. Given the plethora of criminal laws and regulations in today’s society, this due process gap allows prosecutors to charge almost anyone they take a deep interest in.

What good is due process on a crime-by-crime basis if there are so many unknown criminal statutes that everyone can be prosecuted–successfully–for something?

SW Fans Out of Control: Kickstarting Death Star and X-Wings

2013 02 14 Mickey Vader

It’s understandable that Star Wars fans would be energetic after the Disney purchase of LucasFilmsn and subsequent announcement that Disney intends to do to the Star Wars franchise what they are doing for Marvel: milk it for all its worth with a series of major films (Avengers / new trilogy) and stand-alone films (Iron Man or Thor / Han Solo or Yoda). Given how well this has worked for Marvel, Disney, and comic fans so far, it’s no wonder everyone is excited.

But things are getting seriously out of hand.

Not long ago, the White House issued an official reponse to the official petition to build a Death Star (“The Administration does not support blowing up planets.”) and then raised to 100,000 signatures the threshold to trigger an official response (so the Death Star petition, with only 34,435, wouldn’t have required a response). Naturally, the Galactic Empire responded to the White House’s announcement:

Representatives on behalf of the nation-state leader from the unimaginatively named planet refused to acknowledge the obvious cowardice of their choice, preferring instead to attribute the decision to fiscal responsibility.

It did not end there, however.

2013 02 14 Deathstar

Next thing you know, there’s a Kickstarter project with a goal of £20,000,000 to create an open-source Death Star. (Why would it be open source?) So far, £254,438 have been pledged. That’s real money, folks, although given the size of the goal it’s unlikely that anyone will actually have to cough up the dough.  Technically, the initial goal is only to draw up detailed plans and invest in “enough chicken wire to protect reactor exhaust ports.” The stretch goal, to actually build the Death Star, is £543,000,000,000,000,000. (That’s “quadrillions”, in case you were curious.)

Not to take this lying down, the Rebels have now responded with their own Kickstarter. Naturally, they are raising money to build X-wing fighters. (I guess they didn’t get the memo about the chicken wire for the exhuast ports.) So far they have only a fraction of the backers (300 vs 1,700) but they are doing better on the money front. They’ve raised about $300,000 (note: dollars, not pounds) so they’re still behind but they are much closer than they should be based just on number of backers. The Force is strong with them, apparently.  Their initial goal is $11,000,000 (the cost of the first Star Wars movie, not accounting for inflation), but stretch goals include an entire squadron of X-Wings ($4,485,672,683), “a Class YT-1300 Freighter (heavily modified) and a crew consisting of a Corellian smuggler and a Wookiee co-pilot” (13 million standard Galactic Credits), and Y-wing bombers ($23,000,000). The stretch goals aren’t in any sensible order, but at least it does make (some) sense for the Rebels to be open-sourcing their plans.

2013 02 14 X Wings

All of this is both hilarious and awesome.

But also a teensy bit creepy. I envision our civilization collapsing, a new civilization arising, and digital archeologists reconstructing some of the Web and wondering “Were all these people completely insane?” I often wonder about Greek mythology too, and think that rather than being particularly naive and gullible, the Ancient Greeks were just having some serious meta-humor that we’re totally missing out on.

In any case, I don’t plan on contributing to either Kickstarter. Why? With a month and a half left for each one, I’m kind of afraid they might actually hit their goals…

Did Penicillin Start the Sexual Revolution?

The theory is that by providing an effective way to treat syphillis, penicillin kick-started the sexual revolution in the 1950s, 10 years earlier than most people would assume. From EurekAlert:

Syphilis reached its peak in the United States in 1939, when it killed 20,000 people. “It was the AIDS of the late 1930s and early 1940s,” Francis says. “Fear of catching syphilis and dying of it loomed large.”

Penicillin was discovered in 1928, but it was not put into clinical use until 1941. As World War II escalated, and sexually transmitted diseases threatened the troops overseas, penicillin was found to be an effective treatment against syphilis.

“The military wanted to rid the troops of STDs and all kinds of infections, so that they could keep fighting,” Francis says. “That really sped up the development of penicillin as an antibiotic.”

Right after the war, penicillin became a clinical staple for the general population as well. In the United States, syphilis went from a chronic, debilitating and potentially fatal disease to one that could be cured with a single dose of medicine.

The basic idea, that people react to incentives, is not new. Just the incentive. And, in this case, I can’t help but think about the fact that treating syphillis might have made sex a lot safer for men, but women still had the risk of pregnancy to worry about. I wonder if the unequal shift in incentives had any social impact.