The bickering about increasing the minimum wage continues, stirred up by the CBO report I mentioned yesterday. See here and here, for a taste of the discussion.

If anything, the CBO’s report convinces me that a 40% increase in the minimum wage would be problematic. The report rather clearly states that a 24% increase would destroy significantly fewer jobs than a 40% increase would. And a close reading of the report suggests that much of the benefit of a minimum wage increase would be realized by white teenagers living at home with Mommie and Daddy in reasonably prosperous circumstances while the pain would be born by black teenagers. I don’t find that an acceptable outcome.

I pointed out some of the shortcomings in the CBO report yesterday. There’s one thing that puzzles me. The 500,000 jobs lost figure for a 40% increase in the minimum wage seems to be a brute force, split-the-difference figure between zero jobs lost and a million jobs lost. Does the CBO really believe that all of the probabilities from zero to a million are equally likely?

Update

Alexis Simendinger read it the same way I do. If there’s an increase in the minimum wage, it might well be to $9.00 rather than to $10.10.

Since the brouhaha over Secretary Kerry’s remarks about climate change is continuing, viz. here, I thought I’d repeat my views on the subject.

First, I think there are pressing geopolitical reasons for the United States to reduce its oil consumption. I have thought that for more than 30 years and the reasons for it today are, if anything, more pressing than they were decades ago. Even if all of the other reasons we might want to reduce our carbon emissions turned out to be balloon juice, those geopolitical reasons would constitute enough reason for us to consume less oil. A good place to start might be to trim our subsidies for oil consumption. I’m not a big fan of carbon trading schemes—too much opportunity for gaming the system which, presumably, is why they’re so highly favored in some political circles. After trimming subsidies a good, stiff tax on gasoline consumption would be my second alternative.

The earth as we know it has been around for, what, a billion years or so? (I know that the age of the planet is about 4.5 billion years; it wasn’t much like the earth we know then.) The climate has been changing all of that time and it will continue to change regardless of what we do.

Climate change, regardless of its cause, presents a problem for us. It’s not just the dire conditions under which the planet becomes inhospitable to human life that we need to worry about. 10,000 years ago when the climate changed, people just picked up and moved. That’s a lot harder than it used to be. There are a lot more of us, just about every place already has people in it, and over the last millennium or so we’ve developed something called “robust property rights” that makes it even harder to pick up and move than it was ten or twenty thousand years ago.

Robust property rights are Good Things. They’ve produced more prosperity, happiness, and well-being than just about anything else I can think of. They’re worth preserving. So, climate change, preserving the lives of millions (or billions) of people, robust property rights. You can’t have all three.

My preference for coping with climate change (whatever its cause) would be technological solutions. I’ve posted on any number of them over the years. For one thing, you don’t need every other country in the world’s cooperation to put them into effect.

I don’t think the models of climate change due to human-produced emission of greenhouse gases are robust enough to make detailed predictions of the sort that warmist alarmists are trying to make. See the linked op-ed above for more on that. And, as Glenn Reynolds has pointed out any number of times, it would be a lot easier to take their predictions seriously if they were behaving as though their predictions were true.

The notion that every country and every place in every country should have exactly the same energy needs, ways, and means is baffling to me.

I think that the failure to build more nuclear generators to produce power, a decision made 40 years ago, was an enormous error. I thought so then, too. I have great hopes for very small scale nuclear power generation, especially small scale power generation using thorium as fuel. Note that most of the electrical power that I use was generated by a nuclear power plant. California, however, is a lousy place for nuclear power plants. California is a lousy place for a large population but that’s a completely different subject.

I’m a lot more worried about ocean acidification than I am about climate change.

I’ve rambled on long enough. That should be something to chew on.

Richard Reeves suggests that rather than thinking about the 1% vs. the 99% it would be more productive to think about three groups—the affluent, the “squeezed”, and the entrenched poor:

At the very least, recent economic and social trends suggest a trifurcation rather than bifurcation of society, with two consequent divides. At the top, we can see an elite doing well in a labor market offering big returns to human capital. This is perhaps not the just the top 1% (much though politics might be easier if that were so) but, say, the top decile, or 10%, of the income distribution.

This stratum is not only prospering economically. For the people on this top rung, education levels are high and rising. Families are planned, marriages strong, neighborhoods safe and rich in social capital, networks plentiful, BMIs low and savings rates high.

Below this affluent class is a broad swath sometimes dubbed the ‘squeezed middle.’ This group have decent labor market participation rates, but wages that are rising slowly. In many cases, two wages are needed to support the family. They own a home, but are not otherwise wealthy. Savings exist for emergencies or one-off expenditures, but run out fast if the households has a serious downward shock to income. Private schooling is rarely an option, financially. (This is a group that might benefit from one of the schemes of wage insurances currently being discussed, most recently by Prof Miles Corak).

At the bottom of the social scale are those whose poverty is entrenched. Labor market attachment is weak, with many people in long-term unemployment. Teen pregnancy is still heard of, unlike in most communities today. Poverty is felt in most domains of life – crime, health, education, parenting, drug addiction and housing. The growing economic segregation of neighborhoods further isolates this group from chances of work, better schooling or valuable social networks. Upward intergenerational mobility rates are low.

Color me “squeezed”, marginally attached to the labor force as I am now. I think there might actually be four groups—I’d divide the poor into “entrenched poverty” and “imported poverty”. See here for some statistics on the demographics of poverty in the United States. About a third of the poor are black; a majority of the increase in the poor since 1972 are Hispanic.

I’m not really clear on the theory for importing more poverty into the United States when we already have poverty that’s becoming increasingly entrenched.

I see that in Ruth Marcus’s defense for the substantive success of the ARRA, nowhere does she present actual evidence of its efficacy. She does assert that fiscal stimulus is “a classic, and sensible, Keynesian response to recession”, something with which I agree.

The problem is that to be effective fiscal stimulus must be of an appropriate size, timed properly, and structured correctly. None of those was the case.

I think that several things were necessary for an effective stimulus. All of it should have been spent as quickly as possible rather than dribbling it out over several years. If it had been as effective as it should have been, political support for it would have grown rather than weakened as it manifestly did. The only way to spend so large a stimulus quickly is through the tax system (remember the president’s rueful remark that he learned there were no shovel-ready projects?). My preference would have been a payroll tax holiday, a complete suspension of both sides of the payroll tax.

There really isn’t much in the CBO’s projection on the effects of increasing the minimum wage that you wouldn’t expect. It would help some people. It would hurt others. It would reduce employment.

Reactions to the report, too, are much what you’d expect, i.e. where you stand depends on where you sit. I do notice that few are mentioning the substantial difference the CBO finds between increasing the minimum wage to $9.00 (24%) as opposed to $10.10 (40%)—the larger increase would throw five times as many people out of work.

There are other things that aren’t mentioned. For example, the CBO doesn’t essay a projection into the effect that any increase would have on future job growth. Or on what sectors and populations the deleterious effects of an increase would fall heaviest or the beneficial effects help most. And they don’t appear to consider that increasing the minimum wage would incentivize a black market in labor.

Whatever the boosters or critics say there ain’t much new here.

You may not be familiar with the word “triboelectricity” but you’ve probably experienced it. It’s the phenomenon of a material becoming charged electrically when it comes it contact with another through friction. For example, when you get sparks by running a comb through your air (something that may be more familiar to some of us than others). Or when you produce a spark after walking across a wool rug.

Researchers at Georgia Tech are attempting to capture, store, and use the energy produced through the triboelectric effect:

A professor at the Georgia Institute of Technology, Wang is using what’s technically known as the triboelectric effect to create surprising amounts of electric power by rubbing or touching two different materials together. He believes the discovery can provide a new way to power mobile devices such as sensors and smartphones by capturing the otherwise wasted mechanical energy from such sources as walking, the wind blowing, vibration, ocean waves or even cars driving by.

Beyond generating power, the technology could also provide a new type of self-powered sensor, allowing detection of vibrations, motion, water leaks, explosions – or even rain falling. The research has been supported by a variety of sponsors, including the National Science Foundation; U.S. Department of Energy; MANA, part of the National Institute for Materials in Japan; Korean corporation Samsung and the Chinese Academy of Sciences. The research has been reported in journals including ACS Nano, Advanced Materials, Angewandte Chemie, Energy and Environmental Sciences, Nano Energy and Nano Letters.

“We are able to deliver small amounts of portable power for today’s mobile and sensor applications,” said Wang, a Regents professor in Georgia Tech’s School of Materials Science and Engineering. “This opens up a source of energy by harvesting power from activities of all kinds.”

That isn’t a completely novel idea. People have been trying to do this for years but success has proven elusive. My off-hand guess is that triboelectricity has certain niche applications, particularly in the area of self-powered sensors, and the effect receiving more attention and study may result in some of these applications being exploited.

There’s been a burst of activity attending this paper from Robert Gordon at the NBER on slowing economic growth in the United States, produced by four factors: demographics, educational attainment, income inequality, and debt. Tyler Cowen is largely in accord with the conclusions:

I agree with a great deal of this paper, to say the least, especially when it is compared to previous mainstream opinion on these topics. My favorite parts are his discussions of how multi-faceted were the waves of earlier progress starting in the 19th century, compared to some of the more recent and weaker tech revolutions. That said, in some key ways this piece falls short of meeting the standards of reasoned argumentation.

I only have one remark and it’s tangential: the more you know about technology the less threatening you recognize it is.

One more thing: I think we have slowing growth because the policies put into place over the last two to four decades produce slower growth.

Former Chicago Congressman Mel Reynolds has been arrested in Zimbabwe:

HARARE, Zimbabwe (CBS) – Former Congressman Mel Reynolds – who spent time in prison for statutory rape and child pornography charges – has been arrested in Zimbabwe, suspected of making pornographic videos.

WBBM Newsradio’s Regine Schlesinger reports Reynolds, 62, was arrested at his hotel in the capital of Harare, and was being investigated for alleged possession of pornography and a violation of immigration laws.

Zimbabwe’s largest newspaper, the state-controlled Herald, quoted a former Reynods aide as saying Reynolds had shot pornographic videos with models and other women in his hotel room.

Another source told the paper Reynolds had filmed more than 100 videos, and shot 2,000 nude pictures of at least 10 different women on various occasions. The paper also said he owes more than $24,000 in unpaid hotel bills.

Until his convictions for statutory rape and charges relating to pornography (later corruption in office), Reynolds served Illinois’s 2nd Congressional District. He was succeeded by Jesse Jackson, Jr.

Yevgeniy Feyman has one hit and one miss in his post about why U. S. healthcare is so expensive. Here’s his hit:

The verdict on U.S. spending is that it’s generally driven by price increases rather than volume. A 2013 report from the Health Care Cost Institute found that in 2012 “[t]he relatively slow growth of utilization compared to intensity-adjusted prices for inpatient, outpatient, and professional procedure services, reflects the ongoing trend in price growth outpacing service use.” Realizing that American prices for health care are responsible for high levels of health care spending (across the entire distribution), usually leads to one simple proposal – price controls.

Actually, there’s a miss hidden within his hit. Price controls alone won’t cure our healthcare system. Since much of the demand for healthcare in the U. S. and, presumably, elsewhere is physician-induced, that’s got to be brought under control as well since even if prices are controlled spending (and compensation) can be made to rise by prescribing more treatment. Any approach to solving the actual problem we have requires changing incentives.

The bigger miss is his assumption (to be fleshed out in the second part of his series) that costs can be reduced by the application of new treatments and technology. See the preceding paragraph.