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kathy

By Kathy G.

I’ve been remiss in replying to this post by Megan McArdle, but today I’ve finally gotten around to it. This will be a really long post, so don’t say I didn’t warn ya.

McArdle basically argues two things: that 1) the minimum wage has a disemployment effect, and 2) that monopsony is not a persuasive model for the labor market (or at least for the low-wage retail sector). First I’ll deal with the evidence on the minimum wage. McArdle mentions the famous 1994 Alan Krueger and David Card study which looked at the impact of a 1992 increase in the minimum wage on employment in fast food establishments in New Jersey. Krueger and Card found that in that case, contrary to what standard theory predicts, the increase in the minimum wage did not decrease employment.

Very reasonable criticisms of that study have been made. McArdle summarizes:

The original study was a phone study; when another study asked for actual payroll records, they found the same result the standard model would predict: fast food employment dropped in New Jersey. Additionally, as Kevin Murphy has pointed out, the survey started long after employers knew that a minimum wage hike was coming–he compares it to assessing a midnight curfew by comparing the number of teenagers on the street at 11:59 to the number on the street at 12:30.

In response, Krueger and Card did another study that looked at the impact of that same minimum wage increase on employment in fast food establishments in New Jersey. To counter the previous criticisms from economists like Kevin Murphy who said that their data was problematic and that they’d got the timing wrong, this time they used a more reliable data source (employer data from the Bureau of Labor Statistics) and looked at the data over a longer time period. And guess what? This new analysis confirmed their original findings: the increase in the minimum wage did not lead to a decrease in employment.

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By Kathy G.

It’s ironic that this James Surowiecki piece about Toyota’s success came out this week, given the fact that the the latest financial report from Toyota (via Megan McArdle) shows a substantial decline in profits. The decline is being blamed on “a stronger yen and soaring raw-materials costs.” Truck sales in the U.S. have also been down.

Whatever problems Toyota is currently having, Surowiecki points out that Toyota has “long been the auto industry’s most profitable and innovative firm” and that this year it may become the sales leader, as well. What have been the secrets to Toyota’s success? Surowiecki points to innovation, and in particular, Toyota’s vision of “innovation as an incremental process, in which the goal is not to make huge, sudden leaps but, rather, to make things better on a daily basis.”

Crucial this philosophy is

the idea that innovation is the province of an elect few; instead, it’s taken to be an everyday task for which everyone is responsible. According to Matthew E. May, the author of a book about the company called “The Elegant Solution,” Toyota implements a million new ideas a year, and most of them come from ordinary workers.

Though other companies have tried to duplicate Toyota’s techniques, they have had limited success, due in large part to the fact that “most companies are still organized in a very top-down manner.”

Though none of Toyota’s North American plants are unionized, their factories in Japan are, as are many of their factories elsewhere in the world. And Japan is where Toyota developed its innovative managerial techniques. The right-wing argument about unions is that “work rules” and lack of flexibility will inevitably stifle innovation and lower productivity. In fact, Ann Coulter’s arm candy loves to make this point, over and over. But Toyota’s success would appear to contradict this theory. And in fact, there is much evidence that contradicts the old conservative myths about the subject.

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By Kathy G.

The decision on the part of Washington University, the highly respected research university located in St. Louis, Missouri, to award an honorary degree to the odious Phyllis Schlafly is deeply distressing to me. One reason why is that this story has gotten nowhere near the attention it deserves, either from the mainstream media or from the left blogosphere (although there are a few blogs that, against the grain, have been on the case).

I think part of the problem is that, these days, many people have no idea who Phyllis Schlafly was and is. And, compounding that, a lot of folks don’t understand what awarding an honorary degree means. I will try to correct what I see as those lacunae, or misunderstandings, in this post (which I’ll warn you right here, is exceedingly long).

Let me start by posing a question: how would you feel if a great university decided to bestow its highest award — an honorary doctoral degree — on Ann Coulter? Or on Karl Rove? Well, the reprehensible Schlafly is very much their equivalent, as I’ll explain later.

Washington University has defended its outrageous decision to honor Schlafly with these disgusting weasel words:

Alumna Phyllis Schlafly’s articulation of her perspectives has been a significant part of American life during the last half of the 20th century and now the 21st century, serving as a lightning rod for vigorous debate on difficult issues where differences of opinion are profound and passionate. Not only should a university serve as a place where such discussions take place, but it may also choose to recognize those who provide leadership and articulation — both pro and con — on vital issues.

Well, yes, there can be doubt that Phyllis Schlafly has been a “significant part of American life,” that she has been a “lightning rod,” that she has shown “leadership.” As Alan Wolfe pointed out in a 2005 review of a biography about Schlafly that appeared in The New Republic (but which, unfortunately, is unavailable online, because the TNR archives are still screwed up, as they have been for about a year now):

If political influence consists in transforming this huge and cantankerous country in one’s preferred direction, Schlafly has to be regarded as one of the two or three most important Americans of the last half of the twentieth century. . . Had she never been born, the Constitution would now include an Equal Rights Amendment.

I am in complete agreement with Wolfe here — Phyllis Schlafly is indeed probably “one of the two or three most important Americans of the last half of the twentieth century.” That is a bitter and painful truth, but a truth nonetheless. Wolfe again:

Critchlow [author of the Schlafly biography Wolfe is reviewing] is right to insist on Schlafly’s influence–but influence is a neutral category. It may be a force for good or a force for ill, depending upon the ideas that animate it. Let it be said of Phyllis Schlafly that every idea she had was scatter-brained, dangerous, and hateful. The more influential she became, the worse off America became.

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Pain and inequality

by kathy on May 6, 2008

By Kathy G.

The results of this new study on pain assessment by Princeton’s Alan Krueger and SUNY Stony Brook’s Arthur Stone are for the most part not particularly surprising. As it turns out, economic inequality impacts practically every dimension of human existence; even physical pain is unequally shared. For example, the Krueger/Stone study found that respondents with low socio-economic status experienced “significantly higher pain occurrences and severity.” For instance:

The average pain rating is twice as high for those in households with annual incomes below $30,000 as for those in households with incomes above $100,000.

And

Participants with less than a high school degree reported twice the average pain rating as did college graduates.

Occupational status seems to play an important role, given that

the average pain rating for blue collar workers is 1.00 during work and 0.84 during nonwork, and for white collar workers it is 0.61 during both work and non-work episodes.

And in an interview, Krueger said, “Those with higher incomes welcome pain almost by choice, usually through exercise,” he says. “At lower incomes, pain comes as the result of work.” [click to continue…]

By Kathy G.

Well, what can I say? Henry has provided me with such a truly awesome intro that I can’t possibly hope to live up to it. But it does give me an additional incentive to do my best, which is what I’ll attempt to do.

Yesterday, following up on something Spencer Ackerman had posted, Matthew Yglesias wrote the following:

It’s really bizarre how, in the context of war, totally normal attributes of human behavior become transformed into into mysterious cultural quirks of the elusive Arab. I recall having read in the past that because Arabs are horrified of shame, it’s not a good idea to humiliate an innocent man by breaking down his door at night and handcuffing him in front of his wife and children before hauling him off to jail. Now it seems that Arabs are also so invested in honor that they don’t like it when mercenaries kill their relatives.

I completely agree, and this gives me an excuse to bust out an argument that has long been marinating in the recesses of the ol’ cranium. It’s this: that America, the Mideast, and the world would have been better off if “the single most popular and widely read book on the Arabs in the US military,” Raphael Patai’s racist tract The Arab Mind, had been taken off Pentagon reading lists, and been replaced with Edward Said’s Orientalism* instead. [click to continue…]