Sunday, April 20, 2014

Workplace Discrimination Is Everywhere! Bureau of Labor Statistics Proves It!

President Obama and many of his fellow Democrat politicians think they have identified a terrible injustice in the “gender pay gap.” But with almost no effort, anyone who can access the Internet can go to the Bureau of Labor Statistics website and find information showing a far greater injustice: the pay gap between young people and older workers.

Obama and company are scandalized that women are paid 77 percent of what men are paid. Yet I have heard them say nothing about BLS numbers showing 16- to 24-year olds are paid only 54 percent of what workers 25 and older are paid.

Sex discrimination in the workplace? Apparently it’s nothing compared to age discrimination in the workplace!

The BLS informs us: “Median weekly earnings were highest for women age 35 to 64 in 2012, with little difference in the earnings of 35- to 44-year-olds ($747), 45- to 54-year-olds ($746), and 55- to 64-year-olds ($766).” Women 16 to 24 years old were paid only $416 a week, according to the BLS.

“Among men,” the BLS tells us, “workers who were age 45 to 64 had the highest earnings, with 45- to 54-year-olds ($994) making about the same as 55- to 64-year-olds ($1,005).” Men 16 to 24 years old were paid only $468 a week, according to the BLS.

Outrageous! And the more we delve into the BLS report, the more discrimination we find! For instance:

“Asian women and men earned more than their White, Black, and Hispanic or Latino counterparts in 2012. Among women, Whites ($710) earned 92 percent as much as Asians ($770), while Blacks ($599) and Hispanics ($521) earned 78 percent and 68 percent as much as Asians, respectively. In comparison, White men ($879) earned 83 percent as much as Asian men ($1,055); Black men ($665) earned 63 percent as much as Asians; and Hispanic men ($592), 56 percent.”

It’s clear as crystal: Employers discriminate against Whites, Blacks and Hispanics of both sexes while favoring Asians of both sexes!

Oh, no. We read a little farther and find this: “Earnings growth has been largest for White women, outpacing that of their Black and Hispanic counterparts. Between 1979 and 2012, inflation-adjusted earnings (also called constant-dollar earnings) rose by 31 percent for White women, compared with an increase of 20 percent for Black women and 13 percent for Hispanic women. In contrast, earnings for White and Black men in 2012 showed little or no change from their 1979 constant-dollar levels, while Hispanic men’s earnings were down by 8 percent after adjusting for inflation. . . . Asians were not included in this analysis because comparable data for the group are not available until 2003.”

So, since 1979, in constant-dollar terms, employers have been discriminating against men, holding down their earnings while giving White, Black and Hispanic women double-digit increases in their earnings!

Oh, and it gets worse!

“At each level of education, women have fared better than men with respect to earnings growth. Although both women and men without a high school diploma have experienced declines in inflation-adjusted earnings since 1979, the drop for women was significantly less than that for men: a 14-percent decrease for women as opposed to a 32-percent decline for men. On an inflation-adjusted basis, earnings for women with a college degree have increased by 28 percent since 1979, while those of male college graduates have risen by 17 percent.”

So employers have gone more than 30 years discriminating against men regardless of education!

I can’t stand to read any further. Paragraph after paragraph of discrimination laid out for us by the government’s own Bureau of Labor Statistics! Read it all yourself, if you have the stomach for it.

President Obama has not been shy about wielding that famous pen of his to right all sorts of workplace wrongs. Recently he has decreed a minimum wage of $10.10 an hour for federal government contractors. On Tuesday he signed an Executive Order prohibiting federal contractors from retaliating against employees who discuss their compensation. And he signed a Presidential Memorandum “instructing the Secretary of Labor to establish new regulations requiring federal contractors to submit to the Department of Labor summary data on compensation paid to their employees, including data by sex and race,” according to a White House press release.  “The Department of Labor will use the data to encourage compliance with equal pay laws and to target enforcement more effectively by focusing efforts where there are discrepancies and reducing burdens on other employers.”

Equal pay laws? After reading the BLS report, it appears there is no such thing as equal pay. Discrimination is the only possible explanation for all these numbers! The mystery to me is why President Obama and other Democrat leaders have so narrowly focused their attention on the gender pay gap when the BLS has highlighted so many other egregious workplace injustices that scream to be righted.



Three Cheers for Tax Scofflaws (They Keep Us Afloat and Limit Government's Reach)

Today is Tax Day, the day by which Americans' tax returns must be postmarked or electronically submitted in order to avoid the wrath of the shakedown artists at the Internal Revenue Service. Mind you, that's not the same as Tax Freedom Day, the day on which Americans as a whole have earned enough money to pay the year's total tax bill—that's April 21 in 2014, three days later than last year. But the bill due on Tax Day isn't high enough for some, nor is Tax Freedom Day late enough in the year. Jonathan Cohn, of The New Republic, thinks the U.S. government should follow the example of other regimes that demand a bigger take from people's labors and that "a bigger April 15 bill would mean a better society."

What Cohn fails to mention is that tax-happy governments tend to drive tax-averse people to hide in the shadows, concealing vast shares of the economy from officials, and severely limiting the reach of the state. If prople like Cohn really want to emulate other country's tax rates, he'll have to take their off-the-books economies, too—and the limits they impose on what the state can actually take.

Cohn writes in praise of all the good things he sees in a high tax tab.

That payroll tax taken out of everybody’s check? It’s buying you Medicare and Social Security, which means a more secure retirement free of crippling medical bills. Your federal income tax? Its effects are a lot more diffuse. But chances are pretty good that you’ve already used some infrastructure today—whether it was a road or railway you took to work, or maybe the information technology connections you’re using to read this article. Federal, state, and local taxes helped pay for that. Is your water and air clean? Are you safe from threats, domestic and foreign? Then you’re getting something valuable from the Environment Protection Agency, the Federal Bureau of Investigation, and the Department of Defense. Your tax dollars paid for those, too.

He has a tough sales job ahead of him, though. Seventy-six percent of respondents to our recent Reason-Rupe poll say that private charity does as well or better than government in getting mileage from their tax dollars. That means Americans are unlikely to knuckle down and submit to a bigger bill without protest. That's no small concern when you consider that the U.S. has traditionally had the highest income tax compliance rate in the world, and the smallest shadow economy—that is, people engaging in otherwise legal economic activity, but out of sight of the tax man and regulators.

But that's changing.

In recent years, the income tax compliance rate in the United States dipped to 83.1 percent. That's still high, compared to the United Kingdom at 77.97 percent or Switzerland at 77.7 percent, but the gap is closing.

The U.S. shadow economy has also traditionally been smaller than that of other countries. But last year, estimates that it had reached $2 trillion and might account for the country avoiding a return to recession made headlines.

"You normally see underground economies in places like Brazil or in southern Europe," said Laura Gonzalez, professor of personal finance at Fordham University. "But with the job situation and the uncertainty in the economy, it's not all that surprising to have it growing here in the United States."

Estimates are that underground activity last year totaled as much as $2 trillion, according to a study by Edgar Feige, an economist at the University of Wisconsin-Madison.

That's double the amount in 2009, according to a study by Friedrich Schneider, a professor at Johannes Kepler University in Linz, Austria. The study said the shadow economy amounts to nearly 8 percent of U.S. gross domestic product.

Why the sudden growth?

Schneider, the shadow economy expert mentioned in that CNBC story quoted above, remarks, "In almost all studies it has been found out, that the tax and social security contribution burdens are one of the main causes for the existence of the shadow economy." He adds, "The bigger the difference between the total cost of labor in the official economy and the after-tax earnings (from work), the greater is the incentive to avoid this difference and to work in the shadow economy."

Which is to say, if you raise taxes, many people stop paying part or all of them. They hide their efforts, and their income, from the government. In fact, a lot of countries have much bigger economies than official figures suggest, since so much of it happens off the books. If underground activity is equivalent to 8 percent of the U.S. economy, it might be 15 percent of Sweden's, and 20 percent of Spain's.

So, that larger government take that Cohn likes so much becomes nominal, since it's only a share of the official portion of the economy. In fact, once you adjust for the size of the shadow economy, the government's share in the U.S., at roughly (my estimates) 39 percent, is nearly identical to the German state's 40 percent.

Cohn and his friends may not like to hear it, but the tax scofflaws who flee the high taxes he favors have already been credited with keeping America out of recession, and Spain functioning at all. Let's hear it for their scofflaw efforts.



Gold bugs weeping and wailing and garnishing their teeth

Whichever route private investors chose to get exposure to the precious metal, the past three years have not been an easy rise for gold fans.

Both the bullion price and shares in gold mining companies have fallen significantly. Those who put their faith in a fund manager who specialises in both have racked up huge paper losses.

There are seven gold funds available to British investors, and on average they have lost 68pc over the past three years. An investor who ploughed £10,000 into one of these funds three years ago will today find that their investment has shrunk to just £3,200.

Those who bought an exchange-traded fund that aims to track the performance of the gold price have faired slightly better, but have still posted a hefty loss. The precious metal was trading at around $1,547 an ounce in April 2011, but today has slumped to just over $1,300, a 17pc fall.

Gold is viewed as the Marmite of investment. On one side of the coin gold bugs argue that the precious metal offers the best insurance against the risk of inflation and other hazards that could potentially derail global stock markets.

But bears argue that it is impossible to value gold because it pays no income.

Last year investors slashed their gold positions, but since the turn of the year sentiment seems to have improved. Index fund provider ETF Securities said gold had been by far its most popular product over the past two months, with $858m flooding in



Calls grow for money printing in Sweden

Sweden has become the first country in northern Europe to slide into serious deflation, prompting a blistering attack on the Riksbank’s monetary policies by the world’s leading deflation expert.

Swedish consumer prices fell 0.4pc in March from a year earlier, catching the authorities by surprise and leading to calls for immediate action to avert a Japanese-style trap.

Lars Svensson, the Riksbank’s former deputy governor, said the slide into deflation had been caused by a “very dramatic tightening of monetary policy” over the past four years. He called for rates to be slashed from 0.75pc to -0.25pc to drive down the krona, and advised the bank to prepare for quantitative easing on a “large scale”.

Prof Svensson said Sweden was at risk of a “liquidity trap” akin to the 1930s, with deflation causing debt burdens to ratchet up in real terms. Swedish household debt is 170pc of disposable income, among Europe’s highest.

The former Princeton University professor wrote the world’s most widely cited works on deflation, his advice being sought by the US Federal Reserve’s Ben Bernanke during the financial crisis.

Sweden’s Riksbank admitted in its latest monetary report that something unexpected had gone wrong, perhaps due to a worldwide deflationary impulse. “Low inflation has not been fully explained by normal correlations between developments in companies’ prices and costs for some time now. Companies have found it difficult to pass on their cost increases to consumers. This could, in turn, be because demand has been weaker than normal,” it said.

The Riksbank has been trying to “lean against the wind” to curb house price rises and consumer credit, pioneering a new policy that gives weight to the dangers of asset bubbles. But this is proving easier said than done without hurting the productive economy, suggesting that it may be better to use mortgage curbs or other means to rein in property mania.

It is unusual for the Riksbank – the world’s oldest central bank – to be accused of being too hawkish. Swedish economists have been among the most avant-garde for a century. John Maynard Keynes borrowed many of his boldest ideas from the Stockholm School in the 1920s. Sweden largely avoided the Great Depression because the Riksbank tore up the rule book and pursued a reflation strategy very early, with great success.



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