Thursday, March 01, 2012

Another ill effect of US government meddling with corn

This is a bit overstated but it does have a point

Dr. Seth M. Holmes, a professor of Health and Social Behavior at the University of California -- Berkeley, identified the source of the problem in his watershed 2006 paper, “An Ethnographic Study of the Social Context of Migrant Health in the United States.” In the study we learn that 95 percent of agricultural workers in the United States were born in Mexico and 52 percent are undocumented. Most researchers agree that inequalities in the global market make up the primary driving force of labor migration patterns. Mexico’s current minimum wage is US$4.60 per day. In contrast, the US federal minimum wage is $7.25 per hour, while it is $7.65 in Arizona, $8 in California, $7.50 in New Mexico, and $7.25 in Texas.

The 2003 North American Free Trade Agreement (NAFTA) deregulated all agricultural trade, except for corn and dairy products. The Mexican government complains that since NAFTA’s initial implementation in 1994, the United States has raised farm subsidies by 300 percent. As a result, Mexican corn farmers, who comprise the majority of the country’s agricultural sector, experienced drastic declines in the domestic price of their product. It should come as no surprise, then, that the United States began to experience an influx of Mexicans looking for employment in the latter half of the 1990s. Mexican farmers are now rightly protesting because they cannot compete against prices that are artificially deflated for the sake of protecting Americans from necessary market corrections.

Holmes explains that migrant and seasonal farm workers suffer the poorest health status within the agriculture industry. For example, migrant workers have increased rates of many chronic conditions, such as HIV infection, malnutrition, anemia, hypertension, diabetes, anxiety, sterility, blood disorders, and abnormalities in liver and kidney function. This population has an increased incidence of acute sicknesses such as urinary tract and kidney infections, lung infections, heat stroke, anthrax, encephalitis, rabies, and tetanus. Tuberculosis prevalence is six times greater in this population than in the general United States population. Finally, Holmes reports, children of migrant farm workers show high rates of malnutrition, vision problems, dental problems, anemia, and excess blood lead levels.

Economically speaking, Mexico's central bank recently announced that the $22.7 billion in remittances that Mexican migrant workers sent home from the United States in 2011 increased by 6.86 percent over the previous year. Remittances are Mexico's second-largest source of foreign income following oil exports. Nearly all of that the money comes from the United States, with a Mexican citizen population of 12 million.

Can you imagine what would happen if the United States had no farm subsidies, Mexican farms were flourishing, and $22.7 billion was generated within Mexico’s economy to catalyze more wealth creating opportunities? We can only dream at present, but one thing is for certain: Mexican migrant workers would be far better off. As such, through federal corn farm subsidies, America’s government is morally culpable for the oppression, dehumanization, and poor health of Mexican migrant workers.



Some inequalities are inevitable

Rick Santorum's speech at the Detroit Economic Club stirred a bit of controversy when he said: "I'm not about equality of result when it comes to income inequality. There is income inequality in America. There always has been, and hopefully – and I do say that – there always will be." That kind of statement, though having merit, should not be made to people who have little or no understanding. Let's look at inequality.

Kay S. Hymowitz's article "Why the Gender Gap Won't Go Away. Ever," in City Journal (Summer 2011), shows that female doctors earn only 64 percent of the income that male doctors earn. What should be done about that? It turns out that only 16 percent of surgeons are women but 50 percent of pediatricians are women. Even though surgeons have many more years of education and training than do pediatricians, should Congress equalize their salaries or make pediatricians become surgeons?

Wage inequality is everywhere. According to the Bureau of Labor Statistics, Asian men and women earn more than white men and women. Female cafeteria attendants earn more than their male counterparts. Females who are younger than 30 and have never been married earn salaries 8 percent higher than males of the same description. Among women who graduated from college during 1992-93, by 2003 more than one-fifth were no longer in the workforce, and another 17 percent were working part time. That's to be compared with only 2 percent of men in either category. Hymowitz cites several studies showing significant career choice and lifestyle differences between men and women that result in income inequality.

There are other inequalities that ought to be addressed. With all of the excitement about New York Knick Jeremy Lin's rising stardom, nobody questions league domination by blacks, who are a mere 13 percent of our population but constitute 80 percent of NBA players and are the highest-paid ones. It's not much better in the NFL, with blacks being 65 percent of its players. Colleges have made diversity their primary calling, but watch any basketball game and you'd be hard-put to find white players in roles other than bench warming. Worse than that, Japanese, Chinese and American Indian players aren't even recruited for bench warming.

There's inequality in most jobs. According to 2010 BLS data, the following jobs contain 1 percent female workers or less: boilermaking, brickmasonry, stonemasonry, septic tank servicing, sewer pipe cleaning and working with reinforcing iron and rebar. Maybe the reason female workers aren't in these occupations is that too many are in other occupations. Females are 97 percent of preschool and kindergarten teachers, 80 percent of social workers, 82 percent of librarians and 92 percent of dietitians and nutritionists and registered nurses.

Anyone with one ounce of brains can see the problem and solution. Congress has permitted – and even fostered – a misallocation of people by race, sex and ethnicity. Courts have consistently concluded that "gross" disparities are probative of a pattern and practice of discrimination. So what to do? One remedy that Congress might consider is to require females, who are overrepresented in fields such as preschool and kindergarten teaching, to become boilermakers and brickmasons and mandate that male boilermakers and brickmasons become preschool and kindergarten teachers until both of their percentages are equal to their percentages in the population. You say, "Williams, that would be totalitarianism!" But if Americans accept that Congress can make us buy health insurance whether we want to or not, how much more totalitarian would it be for Congress to allocate jobs in the name of social equality and the good of our nation?

Nobel laureate Milton Friedman said: "A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both." Equality before the general rules of law is the only kind of equality conducive to liberty that can be secured without destroying liberty.



Leftists have got a lot of hating to do

One good example is Mariellen Jewers offering 5 Tips to Being a Responsible Consumer to her fellow progressives. Here's a quick snapshot.

1. Don't shop Walmart. They won't unionize. But progressives never quite tell us whether the majority of Walmart employees are covered by their working spouse's benefits or how many use their Walmart training to move up to better jobs.

Walmart's first union-negotiated contract (in China) "resulted in an 8% pay increase for workers," yet progressives never consider if this means an 8% markup on prices for everyone, including Walmart employees themselves, and for the poor for whom they express so much unending angst.

2. Buying Brawny paper towels generates profits for the libertarian Koch brothers who lobby against climate change and its government-imposed regulations, but Seventh Generation paper towels are recycled and "has environmentally friendly practices." So progressives must mindlessly accept climate change? Has Al Gore been officially canonized?

3. Tom’s of Maine is part of Colgate-Palmolive who isn't environmentally pure but Arm & Hammer is, so always buy environmentally good products, including, apparently, those mercury-filled light bulbs.

4. "Shoppers who get a latte with anti-minimum wage rhetoric" (whatever that means) pay the salary of Whole Foods' CEO John Mackey, "an unabashed libertarian." So libertarians are definitely evil in Jewers' personal catechism. (Note to libertarians: Don't try to explain how a minimum wage harms the poor that progressives say they're concerned about. They neither comprehend nor care about the simple logic of it, they believe in it because it "feels right" to them.)

5. AT&T lobbying funnels millions into John Boehner's pockets but Credo Mobile’s lobbying funnels millions into "progressive organizations," thereby making lobbying okay.

So all non-progressive corporations are evil if they lobby for special laws or support wrong politicians, but progressives don't think the same way about "their" corporatist cronies.

Libertarians hold that all crony corporatism is evil because they and their political cronies seek power over all of society.

The only solution is the complete separation of government and the marketplace, thereby creating a true free market, not crony corporatism, not Marxist-defined capitalism, not progressive master-planned technocratic authoritarianism, not socialism, not fascism.



What Is the Male Marriage Premium?

Married men make a lot more money than single men. In the NLSY [National Longitudinal Survey of Youth], married men make 44% extra, even after controlling for education, experience, IQ, race, and number of children. How is this possible?

There are three competing economic explanations. Each of the three may be partly true.

Explanation #1: Ability bias. The causal effect of marriage on male income is smaller than it seems. Even after adjusting for all the previously listed control variables, men with higher income are simply more likely to be married. Maybe income makes it easier to attract a spouse; maybe Puritan attitudes lead to both income and marriage. In a pure ability bias story, marriage has zero causal effect on earnings.

Explanation #2: Human capital. Marriage causally increases male income by making men more productive workers. Maybe marriage makes men work more hours; maybe it makes them work harder per hour; maybe it makes them control their tempers better; maybe all of these and more. In a pure human capital story, marriage actually causes men to become 44% more productive.

Explanation #3: Signaling. Marriage causally increases male income by changing employers' beliefs about worker productivity. As long as married men happen to be more productive, and employers can't costlessly see their productivity, employers will rationally (and profitably!) pay married men more. In a pure signaling story, marriage makes employers expect you to be 44% more productive, but has zero causal effect on productivity.

Economists who study the male marriage premium usually conclude that much of it is causal. This paper, for example uses shotgun weddings to isolate the causal effect of marriage on income, and finds:

"Using the statistical experiment of premarital conception as a potentially exogenous cause of marriage, about 90% of the marriage premium remains after controlling for selection."

So what is the male marriage premium? I'm still deciding, but here's my tentative opinion.

1. The shotgun wedding paper notwithstanding, I think that about half of the marriage premium stems from ability bias. Men who marry are just more conscientious, ambitious, and cooperative, and the NLSY lacks good measures of these traits. This remains true even when men have a shotgun wedding; the stand-up guys go through with the wedding, while the slackers skulk away.

2. At least in the modern American economy, the signaling channel explains no more than 10% (not 10 percentage-points) of the male marriage premium. My reasoning: When employers make hiring decisions, they heavily scrutinize educational credentials, but barely notice marital status. I can easily believe that the signaling channel was far more important in the past; when almost every man marries, the failure to marry raises a red flag. But nowadays?

My main doubt is that I know little about hiring in more traditional occupations and regions of the country. Do employers in Kansas still raise their eyebrows when they see that a 35-year-old male applicant is single? What about CBN?

3. If the male marriage premium is 50% ability bias, and less than 10% signaling, then human capital explains the rest: 40-50%. Much of this effect probably reflects longer work hours and lower unemployment. But it's quite plausible that marriage causally increases hourly productivity by 10%.




CO: Polis mocks state’s new DEA chief: "Democratic Rep. Jared Polis of Colorado on Wednesday poked fun at his state’s new head drug enforcement agent, joking that the Drug Enforcement Agency’s new motto was 'protecting America from mold and water damage.' Barbra Roach, the chief of Denver’s Drug Enforcement Administration, recently told the Denver Post that medical marijuana was dangerous because it caused 'mold and water damage' in the homes of people who grew it."

Study: Upper classes “more likely to lie and cheat”: "Members of the upper classes are more likely to lie, cheat and even break the law than people from less privileged backgrounds, a study has found. In contrast, members of the 'lower' classes appeared more likely to display the traditional attributes of a gentleman. It suggests that the traditional notion of the upper class 'cad' or 'bounder' could have a scientific basis."

The insanity of health insurance: "It is insane that we get our health care from our employers. That happens because we have given a tax advantage to in-kind compensation such as health care. It’s a horrible idea and it leads people to complain about our employers deciding what health care we can receive. Our employers are just a conduit for government mandates, rent-seeking and inefficiency related to health care."

The price of employment “fairness”: "If you receive an application for a position requiring a lot of driving or operating heavy machinery, and the applicant has a known history of alcohol or substance abuse, you’d probably be justified in turning the applicant down for the job, right? You probably already know the answer to this, but: wrong."



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