There’s a considerable amount of huffing and puffing about the President Obama’s requiring federal contractors to pay a higher minimum wage to their employees:

President Obama will announce in the State of the Union address Tuesday that he will use his executive power to increase the minimum wage to $10.10 per hour for workers on new government contracts, fulfilling a top demand by liberal lawmakers and groups, according to a White House document.

Obama will also renew his call for Congress to pass legislation to raise the federal minimum wage for all workers from $7.25 per hour to $10.10 per hour by 2015. But the president is taking the executive action with no clear timeline for Congress acting on the broader legislation. Previously, the White House said it wanted to concentrate on the legislative route for boosting the minimum wage.

What’s not being said is that the announcement may be largely or even completely symbolic. It won’t take effect until after 2015 when new contracts kick in. Just as importantly, no one knows how many workers will be affected. There’s apparently a study out there that says that 75% of the employees of certain federal contractors, “contractors who manufacture military uniforms, provide food and janitorial services, and truck goods”, are paid under $10 an hour. Sadly, the report seems to be unreachable. Based on the reported accounts there’s no reckoning of how much below $10 an hour is being paid (if there were, I would think the news accounts would report it) and the news reports fail to mention actual numbers of people. In any event I would think the additional labor cost will simply be passed on to the federal government’s general fund. There’s probably a limit to how much those contractors can utilize capital investment to offset the increased cost of labor.

There also appears to be no mention of how the order will be enforced.

Here’s an op-ed at USA Today by Sam Pizzigati of the Institute for Policy Studies arguing that we should double the minimum wage and the top marginal tax rate:

A century ago, Americans faced an income and wealth distribution even more top-heavy than today’s. But Americans trimmed the super rich down to democratic size. Our forbears had the courage, in short, to confront concentrated wealth and power. Do we?

One test: Berkeley economist Emmanuel Saez says our top marginal tax rate could hit 80% — double the current top rate — without negatively impacting anybody but the super rich. In the two decades after World War II, our top tax rate hovered around 90%.

Another test: Fast-food workers are pushing for a $15 hourly minimum wage. If the federal minimum had risen since the 1960s as fast as the incomes of the top 1%, that minimum today would exceed $22.

An 80% top tax rate, a $15 minimum wage. Simple steps. Let’s take them.

I’ve read any number of articles from economists to the effect that small increases in the minimum wage don’t have a great deal of effect on employment. That doesn’t appear to be a consensus view (the consensus view remains that the demand for labor continues to be elastic) but it is a mainstream view. Is doubling the minimum wage “small”?

I also think that, as long as Congress insists on maintaining what some call loopholes and others call tax expenditures (the source of a great deal of Congress’s influence), Mr. Pizzigati would be appalled at how little effect an 80%, 90%, or 95% top marginal tax rate would have. There’s a big difference between the top marginal rate which has bounced all over the place over the period of the last 80 years and the effective tax rate which has been remarkably steady in the low twenties.

How Mr. Pizzigati will convince Congress of his plan when they have refused to increase the top marginal tax rate beyond 40% is beyond me.

Tonight a few hardy souls will watch the pomp and circumstance and listen to President Obama deliver his State of the Union message, the sixth of his presidency. I’ll probably be one of them. Frankly, I wish he’d just send Congress a written message.

Instead, he’ll deliver yet another lengthy Christmas list, full of proposals many of which will never see the light of day again let alone be enacted into law.

If the president absolutely, positively must deliver another SOTU message, I wish he’d rededicate himself to the objectives he laid out in his first presidential campaign and mean it. I have no illusions that will happen.

I have never found the president to be a good orator. I’ve always thought he was prolix. Having the floor and being a great orator are not synonymous.

In Mr. Obama’s defense, I’ve never found any of the presidents of the last 40 years to be good orators. Reagan was a good communicator—the best spokesman for his own admiministration and his agenda—but not an orator. Some have been barely passable. Most have been much worse than that, tedious being too kind a word. The last decent orator I can recall was probably Kennedy and how much of that was because he had a great speechwriter it’s hard to tell.

Please chime in in comments on what you think of President Obama as an orator (not what you think of him as president or his policies) or, possibly, what you’d like to hear in tonight’s State of the Union message.

Consider the graph above. It’s pretty obvious that different people are worried about different things. Some people are worried about how long the tail is. I’m more worried about how fat the tail is and how much of that is due to rent-seeking. There are several articles that touch peripherally on this subject I wanted to bring to your attention.

First is this very dense post on trends in income inequality from physicist L. David Roper. A considerable amount of math is required. His most troubling finding is that the mode, the income that the largest number of households have, has been quite steady over time. I also find the relationship between modal income and the minimum wage concerning and note that it tends to support the view of those with strong support for increasing the minimum wage.

Related is this op-ed by Mickey Kaus in the Wall Street Journal:

When I started writing about income inequality in the 1980s, I expected to make a reassuring argument that incomes weren’t growing unequal. That article couldn’t be written. An unceasing barrage of data described an income scale that was pulling apart like taffy. The rich were getting richer faster than anyone else. But even within skill levels or professions—including journalism—the stars were making big money and everyone else was stuck or in decline.

Mickey goes on to express his concern about the loss of social equality that income inequality has carried along with it. He suggests some reasons that social equality has deteriorated:

We can, for example, honor the universal virtue of work by making it the prerequisite for government benefits wherever possible. There’s a reason Social Security checks are respectable and politically untouchable—unlike food stamps, they only go to Americans who’ve worked.

We can also pursue social equality directly, through institutions that mix people from all income levels together, under conditions of equal status—institutions like the draft, for example, or national service. Do we remember the 1950s as a halcyon egalitarian era because the rich weren’t rich—or because rich and poor had served together in World War II?

The draft isn’t coming back anytime soon. But the great social egalitarian hope—mine, anyway—was that Mr. Obama’s health plan might perform a similar function, offering the poor and middle class the same care, in the same hospitals, with the same doctors—and the same respect—that the affluent get (much as Medicare already does).

That doesn’t seem to be the course that the PPACA is taking. Rather it’s separating the American people into those who are covered under the PPACA and those who have more choices in physicians, treatments, medications, etc.

Social mobility is the topic of an article in Slate. A recent study has found that income inequality is not predictive of a decrease in social mobility but other factors are. Here are the factors listed in declining order of their ability to predict:

1. Family structure
2. Racial and economic segregation
3. School quality
4. Social capital
5. Income inequality

I don’t think it’s a coincidence that states like Illinois and Mississippi which have very low state contributions to public education also have lower social mobility. Low state contribution ties both spending on public education and expectations of public education to location and the rich and poor are increasingly living in different places (look at the map of relative mobility in this Atlantic article).

An interesting point is made in this article: as of this writing the PPACA has resulted in a net decrease in the number of persons with healthcare insurance in California of more than a half million. In other words the number of persons insured under the PPACA in California would need to double between now and March 31 just to get back to where we were before the PPACA took effect.

Sadly, it doesn’t matter. The PPACA’s supporters support the imagined idea of the law rather than what it actually accomplishes.

When I say our “civil religion” I mean something different than Diane Butler Bass apparently does here. I mean beliefs like all men are created equal, that the Founding Fathers were virtuous and far-sighted, that George Washington chopped down the cherry tree, that Abraham Lincoln was exceedingly honest, the American Dream, and so on.

Be that as it may I still found the article, on how President Obama has changed our civil religion, interesting. Here’s a snippet:

Gone is the God of biblical revelation, the generalized God-as-Father-in-Heaven, and the distant God of Providence. Rather, Obama’s public God is a personal spirit, the relational presence of inclusion, community, empathy, irony, justice, and service. The God of this new and emerging American civil religion is a God who is with humankind, a far more embracing rather than judgmental figure, who loves and acts in the world through the works of human beings. Most theists can recognize this God (or gods) in their own religious traditions; most non-theists can interpret this sort of God as a spirit of beauty or justice in humankind.

I was somewhat surprised that this article at Science Now on the effects that the development of agriculture had on the European genome highlights skin and eye color:

One surprise is that the La Braña man had dark skin and blue eyes, a combination rarely seen in modern Europeans. Although today’s southern Europeans tend to be somewhat darker than their northern counterparts, they are still relatively light-skinned compared with Africans, an adaptation often linked to the need to absorb more sunlight and so produce adequate amounts of vitamin D. That this feature of the La Braña skeleton might have been widely shared and not just a one-off is also suggested by recent findings, as yet unpublished but posted online in preliminary form, that other European hunter-gatherers also had dark skin and blue eyes.

rather than what is to me the most obvious development: the ability to digest milk, i.e. break down lactose. It is mentioned in passing

This is something I did not know:

But the La Braña man did have some talents thought to have originated only with farming societies: His immune system was apparently capable of fighting off a number of diseases, such as tuberculosis, pneumonia, and malaria (which was endemic in southern Europe until modern times), which researchers had assumed were passed to humans from animals once cattle, sheep, and other species were domesticated. Out of 40 genes involved in immunity that the team looked at, 24 (60%) were similar to those of modern Europeans. “It appears that the first line of defense against pathogens was already there,” says Wolfgang Haak, an ancient DNA researcher at the University of Adelaide in Australia. One possible explanation, Lalueza-Fox adds, is that “epidemics affecting early farmers in the [Middle East] spread to continental Europe before they went themselves.”

which would seem to support Jared Diamond’s hypothesis.

Greg Mankiw says that the rich have gotten richer since 1970 because their parents are richer:

The recent paper by Chetty et al. finds that the regression of kids’ income rank on parents’ income rank has a coefficient of 0.3. (See Figure 1.) That implies an R2 for the regression of 0.09. In other words, 91 percent of the variance is unexplained by parents’ income.

I would be willing venture a guess, based on adoption studies, that a lot of that 9 percent is genetics rather than environment. That is, talented parents have talented kids partly because of good genes. Conservatively, let’s say half is genetics. That leaves only 4.5 percent of the variance attributed directly to parents’ income.

I see a problem with his conclusion:

Even a highly successful policy intervention that neutralized the effects of differing parental incomes would reduce the gap between rich and poor by only about 2 percent.

I don’t think he’s looking at parental incomes critically enough. Bankers and physicians don’t have higher incomes due to market forces. They have higher incomes due to regulations and subsidies. If the banks hadn’t been bailed out in 2008 and 2009, a lot of bankers who are presently earning six and seven figure incomes would have earned no incomes because their banks would have gone out of business. or, at least, that’s what we were told at the time.

There’s no essential connection between ensuring that banks continue to operate and preserving the incomes of bankers. The fact that’s the way it worked out does make you wonder what the actual objective was.

We protect the jobs of some workers through licensing, barriers to entry, and other regulations. We don’t protects the jobs of others. That’s not genetic.

There’s an interesting post over at The Economist, musing over why the poor in America aren’t “up in arms”. Like a bad storyteller, I’ll jump to the conclusion:

1. Being poor isn’t as bad as it used to be.
2. In the United States the poor don’t think they deserve to be treated any better than they are.

Both of those factors may be true but I don’t think they fully explain why Americans are so docile. There are other factors which IMO are equally or even more important.

First, there’s a bipartisan consensus to subsidize the rich, both the ultra-rich and the merely well-off, and to imprison the miscreant poor.

Second, there’s no ready alternative. You can either support the Republicans who voted to cut taxes on the rich, increase taxes on the poor, and import low-skill workers to push the wages of the low-skill workers already here down. Or you can support the Democrates who voted to cut taxes on the rich, increase taxes on the poor, and import low-skill workers to push the wages of the low-skill workers already here down. It’s a Hobson’s Choice.

Finally, my study of revolutions suggests that the poor never rebel. The Glorious Revolution in England, the American Revolution, the French Revolution, the Russian Revolution, and the Chinese Revolutions of 1911 and 1949 were all launched by one group of elites against another group of elites. The general rule is that educated, urban elites foment revolution against agrarian elites who depend on the ownership of land for their wealth.

Here in the United States our own elites benefit mightily from the system as it is. They like the way things are. Unless the snow doesn’t get removed on the QT from their neighborhoods, of course. It will take a lot more than that to make one group of our elites unhappy enough to rebel against another. On behalf of the poor, of course.