Incomes over time
I looked at the Census Bureau's Income, Poverty, and Health Insurance Coverage in the United States: 2005 report at http://www.census.gov/prod/2006pubs/p60-231.pdf That report link I sent you on page 9 says The income and poverty estimates shown in this report are based solely on money income before taxes and do not include the value of noncash benefits such as food stamps, Medicare, Medicaid, public housing, and employer-provided fringe benefits. See page 45 for male and female median income. Male is just slightly lower in 2005 than 1980 but female is much higher. To be fair to trickle down policies I don't think we should make the comparison until 1982 when the 1981 tax cut started having an effect. Male median income is a little higher in 2005 than in 1982 and it was a little higher in 1989, the year Reagan left office but a little lower in 1990. Overall household income is much higher in 2005 than in 1980. See graph on page 11 Cyril Morong, Ph. D. Associate Professor of Economics San Antonio College
Median Wages and Income
I was told by someone at the BLS that they do not keep track of real median wages over time. The following link is from the Census Bureau. The following site from the Census Bureau has information on median income http://www.census.gov/hhes/www/income/histinc/p05ar.html It looks like median income is higher in 2005 for both men and women. The next site shows that hours worked are down since 1980 ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb2.txt So I wonder how the real median hourly wage can be less now than in 1980 if income is up in fewer hours. Is it because not all workers get paid by the hour? There is more info at the next link http://www.census.gov/hhes/www/income/histinc/incpertoc.html Cyril Morong, Ph. D. Associate Professor of Economics San Antonio College
Median Wages
Robert Frank wrote in the New York Times With the median wage, adjusted for inflation, lower now than in 1980 Does anyone know where there is a data series on median wages? It seems like a breakdown by gender, race and immigration status (native born vs. foreign born) would be helpful. Thank you for your time. Cyril Morong, Ph. D. Associate Professor of Economics San Antonio College
Median Wages
Thanks to Fred for that good suggestion. I have contacted BLS once before and they were helpful. So I will try again. I emailed Frank earlier today but have not heard back from him. Fred Childress [EMAIL PROTECTED] wrote: On Thu, 12 Apr 2007 11:07:22 -0500, Jason DeBacker said: I couldn't find a way to make a table go back earlier than 2000 on their website, so you might actually have to go to the raw data- or use some data service like Economy.com or Haver Analytics. Jason, I suggest you give the good folks at BLS a call, (202) 691-6378. Having worked there, they have people sitting around with nothing better to do than pull up some old comma delimited files for your analysis fun. Regards, Fred PS - I would love to know the creative math used by Mr. Frank. On Thu, 12 Apr 2007 11:07:22 -0500, Jason DeBacker said: The likely source of this statistic was the CPS: http://www.bls.gov/cps/home.htm I couldn't find a way to make a table go back earlier than 2000 on their website, so you might actually have to go to the raw data- or use some data service like Economy.com or Haver Analytics. FRED II (St. Louis Fed) only has average (not median) hourly earnings. I'm not sure what wages Frank is talking about though. When I've looked at the CPS both men and women (ages 20-65) had wages increase from 1980-2005. Men didn't have a large increase, but women's median wages went up about 50%. It could depend on what he used to deflate the series or some other sample selection issue. Sincerely, Jason DeBacker On Apr 12, 2007, at 10:34 AM, Gabriel Mihalache wrote: I don't know, but *these* might help... Cato Unbound » February 2007: Interrogating Inequality http://www.cato-unbound.org/archives/february-2007/ Cato Unbound » March 2006: When Does Inequality Matter? http://www.cato-unbound.org/archives/march-2006/ Gabriel On 4/12/07, Cyril Morong wrote: Robert Frank wrote in the New York Times With the median wage, adjusted for inflation, lower now than in 1980 Does anyone know where there is a data series on median wages? It seems like a breakdown by gender, race and immigration status (native born vs. foreign born) would be helpful. Thank you for your time. Cyril Morong, Ph. D. Associate Professor of Economics San Antonio College Fred Childress
Median Wages
If real median wages have fallen, especially over a long time, why would that be? Are there barriers to entry to the higher paying occupations? Everything else being equal, people would rather apply for higher paying jobs. So if they have low pay, why don't they try to get the better paying jobs? If they did, the wages would fall in the higher paying jobs and fall in the lower paying jobs. What stops this from happening? Having to get costly eduation? Is that the barrier? Or is it an information problem-that people don't know what education to get or where the higher paying jobs are (or will be)? Since the process of falling or stagnant wages began maybe even back in the 1970s (and I think the growing wage premium from education), people, espeically younger people, would start moving into higher paying jobs or going to school to get them. If they did that, why would real median wages fall? And if they did not try to get that income enhancing education, why not? What explanations have been offered by those saying wages have declined or stagnated? Cyril Morong, Ph. D. Associate Professor of Economics San Antonio College
Fun with monopostic competition
I came up with a monopostic competition example where the firm earns a zero economic profit, the ATC and MC lines are mathematically consistent with each other, the demand and MR lines are mathematically consistent with each other, and ATC is tangent to demand at the exact same quantity that MR crosses MC. If anyone has seen this before, please let me know. You can read this at http://www.geocities.com/[EMAIL PROTECTED]/MonopolisticCompetition.doc Cyril Morong
How to Stop the PlaySation Violence
If people are turned off by high initial prices, they can wait to buy it. Maybe if they wait, they won't get one. But alot of people are not getting them anyway. They wait in line and might not get one. The goodwill can be made back by giving some of the excess profit to charity. If it was announced ahead of time that Sony and/or the stores were going to charge a high price initially to keep the crowds and security problems down and that they were going to give some of the money to charity, it could alleviate any goodwill concerns. Having to wait in line and get mugged is not going to promote goodwill, either. The article said a Walmart had to close. That does not create goodwill. And how serious can the goodwill issue be given that people are paying so much for it on eBay? It may be a social waste to have to close stores, have people waist their time in lines and have the police come investigate crimes. All of that could be avoided by higher prices Cyril Morong Jared Faris [EMAIL PROTECTED] wrote: I think there is another factor here: company goodwill. Accountants already know how to treat goodwill so it could probably be analyzed in this case by an economist, but my theory is this: Most consumers (not the ones buying the playstations on ebay) don't like the idea that the product they just bought for a high price is now selling for a lower price. If it became known that Sony was using this type of pricing discrimination based on time to purchase from launch it might put a bad taste in the mouths of consumers for that product or all of Sony's products. People often expect some sort of fairness when purchasing goods regardless of what the market will tolerate. However, airlines do this all the time so I might be totally wrong. Maybe some part of the market is elastic. But there could be a segment that is inelastic (the ones that want to get it right away). So you could charge them more. There won't be any resales by the low price people since they will be getting it later on. I think the fact that it goes for so much on eBay shows that for at least some segment, the demand is inelastic. Maybe they are willing to sell the consoles at a loss to sell more games. But the stores could sell them for more to avoid the panic, stampedes and security problems. And if people want to pay so much more for the consoles (evidenced by the high eBay prices and the fact that people are willing to wait in line so long), Sony might not have to sell them at a loss. Lines might be free advertising, but as Landsburg points out in the book, you could sell the consoles for a higher price and use that money to advertize Lines might be negative externalities. But is there some reason why the retailers cannot raise the price to cover them?
How to Stop the PlaySation Violence
Maybe some part of the market is elastic. But there could be a segment that is inelastic (the ones that want to get it right away). So you could charge them more. There won't be any resales by the low price people since they will be getting it later on. I think the fact that it goes for so much on eBay shows that for at least some segment, the demand is inelastic. Maybe they are willing to sell the consoles at a loss to sell more games. But the stores could sell them for more to avoid the panic, stampedes and security problems. And if people want to pay so much more for the consoles (evidenced by the high eBay prices and the fact that people are willing to wait in line so long), Sony might not have to sell them at a loss. Lines might be free advertising, but as Landsburg points out in the book, you could sell the consoles for a higher price and use that money to advertize Lines might be negative externalities. But is there some reason why the retailers cannot raise the price to cover them? Cyril Morong John Perich [EMAIL PROTECTED] wrote: How to Stop the PlaySation Violence Cyril, The pricing strategy you describe is effectively in place now - it's just that X, where $500+X is the clearing price, is what the PS3 resells for on eBay. So the producers and retailers get none of it. As to why Sony doesn't do it already? Several theories: * The demand for video game consoles is SO elastic that the slightest deviation in price would drastically alter the quantity. Since there are relatively few instances to track - how often is there a big console launch? - the big companies haven't quite figured out the market-clearing price yet. * There's an existing and documented strategy for big companies to sell their console *at a loss*, with the presumption that they'll make up for it by selling games. The Nintendo Wii is the only recent console to deviate from this strategy (my neighbors are playing on mine as I type this). I can't speak to the strategy's validity - I'm an economist, not a marketer - but apparently, yes, the consoles COULD sell for more. * Lines are free advertising. * Lines are a negative externality. The producer sets the prices; the retailer has to live with them. The costs of lines (gamers in tents outside your store for days) are borne by Best Buy, Target, WalMart and the like - not Sony. My thoughts, -John P.
Odd Request From Journal in Foreign Country
I submitted an article to a foreign journal. This is something they requested, which, of course, I am not going to send them."Dear Professor Cyril Morong: thank you very much for your prompt response. We need your birth date in order to complete your personal data in our registers. Also, the ID number (Identification number, it could be from your passport, social security number...etc.).Our journal is periodically evaluated by internacional indexes, which ask for these information in order to recognize the authors and referees. Some times they check our information with other economic data bases and the personal information helps to identify and clasify the data base."My guess is that none of you have ever been asked for something like this before.Cyril Morong
Critiques of Traditional Economic Theory
I could not think of a better phrase. Has anyone heard of the following books""Debunking Economics" by Steve Keen "Death of Economics" by Paul Ormerod Anyone know if they are worth reading or if their critiques are useful?Cyril Morong
What are the best economics blogs?
What blogs do people on this list like? And are blogs the reason not much gets posted to this list anymore?Cyril Morong
Edmund Phelps and Harry Hopkins
I have not read any books by Phelps. Does anyone know if he ever quoted Harry Hopkins? Below are quotes from each man and they both relate to how unemployment dimishes skills and hurts morale.In a 1935 NY Times article, Harry Hopkins, Federal Emergency Relief Administrator was quoted:"There are those who tell us that we should avoid relief. They sat that straight relief is cheaper. No one will deny this contention. It costs money to put a man to work. Apparently, to the advocates of direct relief the primary object of relief is to save the government money. The ultimate humane cost to the government never occurs to them-of a continued situation through which its citizens lose their sense of independence and strength and their sense of individual destiny. Work preserves a man's morale. It saves his skill. It gives him a chance to do something socially useful."(if you have access to Proquest or some data base like that, you can find this article-some information on it is below)Below is a quote from the Chronicle of Higher Education (Monday, October 9, 2006-extra email edition)on Phelps winning the Nobel Prize:"In a 1972 book, he suggested that large spikes in unemployment might have irreversible destructive consequences, as workers' skills and morale deteriorated while they sat at home. Just as inflation can have cancerous effects on business owners' long-term expectations, he suggested, unemployment can have poisonous effects on workers' long-term hopes."Article information THE ROAD TO RECOVERY: SPENDING OR SAVING?; The Debate Is Renewed Between Those Who Advocate Large Expenditures for Public Works and Those Who Insist That Steps Should Be Taken to Balance the Budget and Encourage Private Business By HENRY HAZLITT.. New York Times (1857-Current. Jan 6, 1935. p. XX1 (1 page)
Drivers give helmeted cyclists less room?
This sounds like the discussion in the "Armchair Economist" book about the baby on board signs and how it might affect accident rates.http://my.netscape.com/corewidgets/news/story.psp?cat=50900id=2006091307570002003114 TORONTO (Reuters) - Motorists give greater leeway to cyclists who do not wear safety helmets, according to a study by a academic in Britain who was hit by traffic twice as he rode his bike to carry out his research. Researcher Ian Walker from the Department of Psychology of Britain's University of Bath found drivers were up to two times more likely to get close when passing cyclists wearing helmets than when overtaking bare-headed pedalers. He said wearing a helmet might therefore make a collision more likely, but a safety-advocacy group cautioned against giving up a helmet's protection against head injury in hopes of avoiding a crash. To conduct his experiment, Walker rode a bicycle fitted with a computer and an ultrasonic distance sensor and recorded data from more than 2,500 overtaking motorists. He spent half his time wearing a helmet and half bare-headed. He says he was struck by a bus and a truck while wearing the helmet but was uninjured. Walker, whose research has been accepted for publication in the international journal Accident Analysis Prevention at a date not yet set, said his study followed previous research that found many drivers saw cyclists as a group of "lycra-clad street-warriors.." "This may lead drivers to believe cyclists with helmets are more serious, experienced and predictable than those without," he said in a statement released on Tuesday. Walker found drivers passed an average of 3.3 inches (8.5 cm) closer to cyclists with a helmet than without, giving cyclists the room needed to avoid drain covers and potholes. As part of his experiment, Walker also donned a blond wig and found drivers gave him an average of 5.5 inches more space when they passed what appeared to be a female cyclist. "We know helmets are useful in low-speed falls, and so definitely good for children, but whether they offer any real protection to somebody struck by a car is very controversial," said Walker. "Either way, this study suggests wearing a helmet might make a collision more likely in the first place." A spokesman for Britain's Royal Society for the Prevention of Accidents said the study highlighted the vulnerability of cyclists and the need for drivers to take greater care. "But we would not recommend people stop wearing cycle helmets because of this research. Helmets have been shown to reduce the likelihood of head and brain injuries in a crash," said the spokesman.
Price Gouging is Bad Medicine
That is the title of an interesting article on page A9 of the May 20/21 Wall Street Journal by Alexander Tabarrok. A longer and more in depth version can be found athttp://www.manhattan-institute.org/html/cjr_10.htmCyril Morong
NAFTA took jobs, workers from Mexico
There was an article in my local paper, the San Antonio Express-News, a couple of days ago titled "NAFTA took jobs, workers from Mexico." The author claimed that NAFTA drove 1.5 million farming families out of business by allowing subsidized U.S. corn into Mexico. Those workers went to cities, driving down wages and that they had no workplace rights under NAFTA. Now the workers in manufacturing can't even earn enough to afford basic necessities. So that is why more Mexicans have been trying to immigrate. Also, the author says, there was a drop in Mexican immigration before NAFTA, but then it started rising after NAFTA went into effect. It seems to me that 1.5 million families losing their farms is pretty far fetched. Also, wasn't there a recession (not related to NAFTA) back around 1994 or so that could have caused this problem? If you have anyone has anyrelevant information on this, please let me know or send me some links that can refute this article.A link to the article is below.Cyril Moronghttp://www.mysanantonio.com/opinion/letters/stories/MYSA041306.2O.rosalescomment.169a10e3.html
Real Wages
In the inside cover of the principles book by Tollison, Ekelund and Ressler, they show average hourly earnings in 1964 at $11.88. For 2004, they have $15.64. I think they are using 2002 as the base year, but it is not clear (perhaps 2004). This shows about a 31% increase in the real hourly wage. But using the following sites ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb2.txt ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt The nominal wage was $2.53 in 1964 and $15.67 in 2004. The 2004 figure was 6.19 times has high as the 1964 figure. For the CPI, it went from 31.2 in December of 1964 to 190.3 in December of 2004. The 2004 figure is about 6.1 times the 1964 figure. This all seems to suggest just about no increase in real wages. Anyone know why this book shows an increase? The sources listed in the book are The Statistical Abstract of the United States and The Economic Report of the President. Cyril Morong
Benefits of education
A company called CCBenefits, INC did a study and found that the community college I teach at yields a 27% rate of return from taxpayer dollars spent on it. That seems very high. Has anyone heard of this company or an economist named Kjell Christopherson, who works for them? Cyril Morong
Historic districts
Does anyone know of any studies on the economic impact of designating neighborhoods in big cities historic districts? Does doing this create any net benefits? Cyril Morong
Diversity in Higher Education
I think I have read that some who favor affirmative action in college admissions say something like "with more racial and ethinic diversity in the class room, we here more viewpoints (or more liberal or more tolerant points of view)" Anybody else here or read that? And if so, anybody know of a citation or link? It seems that if that is true, then perhaps if the faculty is dominated by liberals, we will be less likely to here free market views expressed on a campus. My guess is that when people gather, if they are all of a similar mind or belong to the same type of group, they may tend to express only certain types opinions and look down on or ridicule other types of opinions. Off the point, but there was a quote in the paper yesterday (I forgot from who) it was something like "Social scientists make an art of out trying to pull habits out of rats." Cyril Morong
NAFTA, umemployment rates and trade deficits
I asked the other day about research that addresses the link between the trade deficit and unemployment rates. My guess is that it has been studied quite a bit, with probably alot of papers on it. But I tried something myself anyway. I ran a regression in which the yearly percentage point change in the unemployment rate was the dependent variable (UE). The independent variables were BAL= the yearly percentage point change in the tradebalance (as a percentage of GDP). For example, in 2000 it was -3.8% and in 1999 it was -2.8%. So for 2000, the change was -1.0. LF = the yearly percentage point change in the labor force participation rate. PR = the yearly percentage change in productivity. GDP = the yearly percentage change in the real per capita GDP (with the labor force used instead of the population). The OLS regression equation was UE =.40 + .36*BAL + .12*LF- .92*PR - .36*GDP The r-squared was .84 and the stadard error was .40 The t-values were BAL2.63 LF 2.74 PR -3.67 GDP -11.09 So holding the other factors constant, as the yearly percentage point change in the tradebalance gets more positive (negative), the yearly percentage point change in the unemployment rate gets bigger (smaller). This says that as we get bigger trades deficits, the lower the unemployment rate (at least compared to the previous year). It looks like as the labor force participation rate rises, the unemployment rate goes up, ceteris paribus. But the bigger the productivity improvement, the lower the unemployment rate. I expected the opposite. I thought that if productivity goes up, firms could increase output without adding workers. And of course, the bigger the increase in GDP, the lower the unemployment rate. So if GDP goes up 4.0%, then the unemployment rate would fall 1.42 percentagepoints. If the trade balance gets 1.0 percentagepoints more negative, then the unemployment rate would fall .36 percentage points. If productivity rises 3.0%, then the unemployment rate would fall 2.75% points. If the labor force participation rate rise 1.0 percentage points, unemployment would rise .12 percentage points. There may be time series issues like serial correlation which I have not tested for. There may also be other factors like minimum wage laws, regulations, etc that might affect this. Comments welcome. Cyril Morong
NAFTA, umemployment rates and trade deficits
Sorry. That study I did covered the U.S. from 1961-2000. Cyril Morong
NAFTA, umemployment rates and trade deficits
I added a real wagechange variable to the regression I explained earlier. Doing so had little effect on the r-squared and the standard errror. The r-squared increased from .841 to .854 and the standard error fell from .396 to .3908. The coefficients and t-values for the GDP, trade balance and labor force participation variables changed very little. But the sign on the productivity variable changed from negative to positive but its value wasonly about .09. The t-value was 1.48. The coefficient on real wage change was .054 and the t-value was 1.07. I used some data on hourly wages from a department of labor website and that series started in 1964. So the period for the regression was 1965-2000. But the same result for the trade deficit. The more negative it gets, the lower the unemployment rate. Cyril Morong
Re: the answer is...
Could there be some collinearity with education or educational attainment? If people with more education make more income (and were more likely to vote for Kerry), maybe something else is going on. I actually don't know if Kerry got more support from the best educated.
