Minimum Wage and its Discontents

What you get for an hour
What you get for an hour

President Obama recently said in his State of the Union that Congress should do whatever it takes to increase the federal minimum wage to $9/hour. This caught a lot of folks on both sides of the aisle off guard because the stated priority of both parties is currently job creation. And the conventional economic wisdom states that if you increase the wage that employers have to pay their workers, they will simply hire fewer workers. Increasing the minimum wage leads to an increase in unemployment.

The counterargument to this is that increasing the minimum wage would give low-income workers more purchasing power, serving as an indirect economic stimulus without government spending. The increases in unemployment take effect only if the minimum wage is drastically increased – modest increases have little if any effect on employment.

As Paul Krugman pointed out last Sunday in the NY Times, setting minimum wage at “$20 an hour would create a lot of problems. But that’s not what’s on the table. And there are strong reasons to believe that the kind of minimum wage increase the president is proposing would have overwhelmingly positive effects.”

Employment is not the only factor at play. Continue reading “Minimum Wage and its Discontents”

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Here Come the Asians

“Nation, we’re getting boxed in. Mexicans do the jobs we don’t want to do, and Asians do the job we’re not able to do.” – Stephen Colbert

Just after the 2000 Census, the Hispanic/Latino community overtook the Black/African American community as the country’s largest minority community. At the time, there were just over 35 million Hispanics in the US. Following the 2010 Census, that figure has grown to over 50 million. The US has more people of Spanish speaking origin than any other country in the world other than Mexico.

As usual though, the demographic tides are turning. According to a new study put out by the Pew Research Center, in 2010, for the first time Asian immigration  (430,000 arrivals) outnumbered Hispanic immigration (370,000 arrivals). Asians currently comprise the largest stream of immigrants in the country.

Continue reading “Here Come the Asians”

Smokers Need not Apply

I recently came across the following “recruitment restriction” at the bottom a World Health Organizations (WHO) employment website.

  • Policy on Non-Recruitment of Smokers: WHO has a smoke-free environment and does not recruit smokers or other tobacco users who do not indicate a willingness to stop smoking. This policy underscores the Organization’s commitment to promoting a tobacco-free environment.

Immediately after the clause is a link to frequently asked questions on WHO’s smoking policy. All candidates who fill out the online application must answer two smoking related questions:

  • “Do you smoke or use tobacco products?”
  • “If you currently smoke or use tobacco products, would you continue to do so if employed by WHO?”

An affirmative answer to either of these questions will mean that the applicant will not be considered for selection. Keep in mind that this applies to newly recruited staff. If you were already a smoker by the time the policy was implemented, you can still smoke. The consequences for smoking following recruitment are vague, however. Violators will be treated as having falsified information on their application form and be subject to “disciplinary action”. No clue what that means.

So here’s the question. Is it OK for the WHO to restrict employment to non-smokers? After all, the Centers for Disease Control and Prevention estimates that cigarette smoking accounts for 443,000 deaths in the US alone – that’s 20% of all deaths. But then what about alcohol? Surely, excessive drinking leads to many deaths as well – should the WHO ban heavy drinkers? Is it fair that healthy employees have to subsidize the health insurance policies of their unhealthy (by choice) colleagues? Is it your employer’s business what you do outside of the workplace? Where do we draw the line?

Facebook Is Defending Our Privacy (and Their Bottom Line)

Employers want your Facebook password, but Mark and Co. are here to help. Nice, but there is still no hope.

No intro for this post – we already know that Facebook is taking over our lives.

What’s more disturbing, however, is the recent trend of employers asking candidates for Facebook passwords in job interviews. Most companies already search your name in Google and Facebook to glean any public information, but requiring the disclosure of your password is tantamount to handing over a copy of your house keys in case your boss ever feels like dropping by to make sure you aren’t misbehaving. Apparently Facebook has noticed and has made it known that they are not happy.

Last Friday, Facebook issued a statement, condemning the soliciting of passwords. And then they took it to another level.

Facebook takes your privacy seriously.  We’ll take action to protect the privacy and security of our users, whether by engaging policymakers or, where appropriate, by initiating legal action, including by shutting down applications that abuse their privileges.

Did you catch that? Initiating legal action! The prospects of a legal battle with Facebook makes the ACLU (who is working on the matter too) seem like a minor nuisance. Hopefully, this will discourage employers from overstepping their boundaries (now if only we could get Facebook to do so as well).

So why is Facebook so concerned with our privacy? By partnering with users to maintain strict boundaries around personal information, Facebook is ensuring that they, and only they, can have access to (and profit from) your personal information. This is the basis of their entire business model. Also, if employers had access to accounts, people would be less likely to use the site as freely as they do now. Fewer users and reduced volume translates to less information to sell.

Although Facebook has taken a stand against intrusive employers, in the long run, we may be defenseless against entities that know us better than we know ourselves. There are plenty of other companies and government authorities who are actively working to track our behavior in order to facilitate material consumption and political coercion. The irony is that we are voluntarily giving up our privacy. Complaints about corporate intrusiveness are superseded by our frantic appetite to consume more of their products. We may be safe from our employers for now, but if we are headed toward a dystopian future of conformity and control, perhaps it will be our own fault for signing up. For a more full explanation, see this important video.

Is College Worth it? Part 1: Jobs

A degree used to guarantee secure employment – not so any more, but the alternatives are even worse.

There was a time when the United States had so many well-paying jobs  that having a college degree wasn’t necessary, but if you did have one, you got an even better job. Adam Davidson argues in this past weekend’s New York Times that much has changed since this “golden age”, which lasted roughly from 1945 to 1973. The two main reasons for this change both have to do with competition.

More big fish in the pond: In the early 1970s, only 10% of Americans had a college degree. In 40 years, that number has tripled. On the one hand, this means that there are more skilled people and, thereby, better conditions for overall economic growth. But it also means that the level of internal competition is greater than it has ever been and that each graduate must do more to stand out. There’s a real chance that we have too many liberal arts majors (it’s not just them, but that’s the stereotype) who lack real world job skills. Now that it’s expected that you get a degree, too many kids are coming out of high school and getting a degree for the sake of getting one, i.e. not actually learning anything.

The pond is connecting to the sea: Technology has made it much easier to ship jobs overseas. It started with manufacturing and now includes virtually everything (it’s not just call centers either).

So what’s the lesson? Don’t bother getting a degree? Not quite. It’s easy to encounter high levels of unemployment in the Great Recession and think that perhaps college is not worth the investment. While it’s true that a college degree no longer guarantees you a job and a pension, not getting a a degree is increasingly becoming the best way to guarantee underemployment and low earnings.

According to the US Census, a college graduate earns, on average, more than $23,000 more per year than a high school graduate. The unemployment rate among college grads is the highest it has been since 1970, but at just over 5%, it is still only half that of high school graduates. It’s bad for grads, but worse for non-grads. College seems to be a necessary, but not sufficient aspect of full employment.

So stay in school…unless you’re brilliant, in which case, don’t waste your time with class – get good at computers, drug trafficking or money laundering. Check out the list of college dropout billionaires.

It looks like college is still the best way to land a good job. Next time, we look at whether or not it’s worth the (skyrocketing) price of tuition.