Saturday, March 30, 2013

How much would you have to earn in a job in order to not take Federal Disability Compensation (assuming you qualify)? I do the math for you and ask: "What would YOU do in this situation?"?

This post comes as a result of thinking about the much discussed NPR story on the Federal Disability program and the real (or perceived) abuses.

I want to put the benefit amount recieved by qualified recipients in perspective.

The average monthly check a person receives from the Federal Disability program is $1,202.96 (Source HERE).

If this person were working and earning a wage, to earn this amount after taxes, they would have to make about $1,382.00 (I took $1,202.96 and multiplied by 1.15 to add on 15% in various taxes and deductions--this may be high OR low)

If this person were to work 4.3 weeks a month (on average) and work 40 hours per week, then that would work out to an hourly wage of $8.03 (40 X 4.3 = 172.  $1382/172 = $8.03)

Opportunity Cost.  Presumably, the incentive to "get off" Federal Disability compensation would require a nominal wage of AT LEAST $8.03 per hour, but it is probably much higher. This is assuming there are no addtional benefits being collected.  There are also additonal costs of going to work---transportation costs, clothing costs, daycare, etc that people have to factor in.

The minimum wage is $7.25 per hour (some States it is higher).

This is the choice people face. It is the incentive before them.


The story of 7 million missing horses and mules in the 1920's and why it was a good thing for YOU today!!

I have really enjoyed reading some very old published reports on prices and other data from the 1920's and 1930's.

I found this gem in a 1930 report from the Bureau of Labor on the effect the transition from a horse and mule economy to a mechanized one (cars, trucks, farm implements, etc). 

Note the yellow highlighted numbers. During the decade of 1920 to 1930 the number of horses and mules used in cities and on the farm decreased by 7.037 million.  This freed up 18.5 million acres to produce food for human consumption instead of feeding those horses and mules.

For reference, the WHOLE State of South Carolina is 19.26 million acres.  So, in the decade of the 1920's alone there was the equivalent of the state of S.C. put into play food production to feed people rather than to feed  animals.

The usual story is that mechanization, especially on the farm, increased productivity in terms of food production as if the equipment itself produced those higher yields.

At least in the beginning, the fact that agricultural yields did not have to be used to "fuel"  animals and could instead head to market for HUMAN consumption seems to be a better explanation. The supply of food increased and decreased prices---a BIG DEAL!!

Source: HERE
Another great tidbit from this report is the suggestion that mechanization was a BAD thing for farmers AND people in general:

 LOL! I think history has answered that question!

 And this (sorry it is so small---Blogspot really stinks sometimes).  Notice the reasoning on why mechanization will produce negative results for agriculture:

And finally this:

Friday, March 29, 2013

Decorating Easter Eggs and feeling nostalgic? How much did eggs cost during The Depression era compared to today? I think you will find this interesting...

The idea for this blog entry comes from HERE, but I have wanted to use for a while the historical data from the link below.  Now is my chance!

Let's go back 80 years to the depths of The Great Depression and see how the price of eggs to make the traditional Easter decoration has changed.

A dozen eggs in 1933 cost 22.3 cents (source HERE and noted below from the document)

Source: HERE
Today, the US average for a dozen eggs is $1.93 (Source: CPI Detailed Report (complete text and tables) February 2013 (PDF))

In inflation adjusted dollars, 22.3 cents in 1933 would be $3.98 in 2013.

The $1.93 we would pay for a dozen eggs today would be the same as 11 cents in 1933. 

What people in 1933 would have given to get eggs half price!!

Eggs are a bargain TODAY compared to Depression Era prices.

If you are a teacher, THIS link is great for finding prices and wages from the 1920's and up.  A terrific way to teach inflation and standard of living.

Oppa, Kim Jong-un style...Here is my entry into the "Why Austin?" for nuclear annihilation. :)

Kim Jong-un and company. 

For my Aggie friends...

Thursday, March 28, 2013

Nice graph showing the change in "Routine vs Non-Routine" jobs over time. If you are in the first category you need to look over your shoulder. See here why...

This graph blows me away (Source: AEI).  It shows over time, the change in the share of jobs that are "routine" or "non-routine" in nature. 

"Routine" jobs are ones that entail performing tasks that have become so standardized and simple they require very little skill to accomplish.  Labor contributes a relatively small amount to the overall value of the product or service created. They can be replaced by technology to perform the routine tasks or by low wage workers around the world.  

"Non-Routine" jobs are ones that require the labor performed to evolve and actively participate in creating a product or service.  Labor contributes a relatively large amount to the overall value of the product or service created.  Non-routine jobs depend on the use of technology and higher level skills (education) to create that value.

Technology and competition from low wage workers globally can be a substitutes for routine jobs.  Technology and higher level skills are complements to non-routine jobs.

Source: American Enterprise Institute
As you can see from the graph, this trend in the labor market has been going on for a LONG time.

How do we address and change this?  How do we get people to want to stay in school, get additional training, and constantly upgrade their skills to keep up in a changing world.

Dunno.  But seems like that is what we should think about as a country.

Wednesday, March 27, 2013

If your high school granted admissions on the basis of a single test what would the demographics look like? Well, NYC does this and the results are quite amazing. See the numbers here...

I did not know NYC did this for admission to various high schools. Quite extraordinary.

Here are the results of admitting students to select high schools in New York City based SOLELY on a competitive exam to get in (HT: Newmarksdoor).
—Stuyvesant offered admission to 9 black students; 24 Latino students; 177 white students; and 620 students who identify as Asian. 
—Bronx Science offered admission to 25 black students; 54 Latino students; 239 white students; 489 Asian students; and 3 American Indian/Alaskan Native students. 
—Brooklyn Tech offered admission to 110 black students; 134 Latino students; 451 white students; 960 Asian students; and 5 American Indian/Alaskan Native students.

Read more here:  Most Eighth Graders Matched to a High School of Their Choice

Read more on the use of a single test to determine admissions:  Debate of Single-Test Admissions Policy Divides on Access and Race

Immigration is a feature of a Market Economy not a bug. We need to get on the right side of this issue. Read here why I think so...

We need more immigrants, not fewer. The benefits, in my opinion, far outweigh the costs.  We just don't seem to be aware of (or acknowledge) the benefits as much as we do the costs. 

Shame on us for not measuring twice and cutting once. 

Please read this whole posting that the following excerpt comes from: Why The Red States Will Profit Most From More U.S. Immigration.

Most immigrants come to the US but they GO to work:
Over time, the immigrant impact may prove greatest in terms of economics. Immigrants, in a word, tend to be resilient, and opportunistic by nature. Although many immigrants and their offspring still lag behind economically, over time they appear to be integrating. Overall their rate of home ownership still lags that of native born Americans, but appears to have held up better since the recession. 
Nowhere is the impact greater than in the entrepreneurial sector. Between 1982 and 2007, the number of businesses owned by the primary immigrant groups, Asian Americans and Hispanics grew by 545% and 696% respectfully. In contrast businesses owned by whites grew by only 81%.

Perhaps more important still, even in the midst of the recession, newcomers continued to form businesses at a record rate, even as those by native-born entrepreneurs declined. The immigrant share of all new businesses, notes
Kauffman, more than doubled from from 13.4% in 1996 to 29.5% in 2010.

Where are these industrious immigrants moving to and which political party should benefit from their presence?:
(In addition to #1 Nashville)...Other cities are equally surprising, including #2 Birmingham, AL; #3 Indianapolis, IN; #4 Louisville, KY and#5 Charlotte, NC, all of which doubled their foreign born population between 2000 and 2011. Right behind them are #6 Richmond,VA, #7 Raleigh,NC , #8 Orlando, Fl, #9 Jacksonville,Fl and #10 Columbus, OH. All these states either voted for Mitt Romney last year or have state governments under Republican control. None easily fit the impression of liberally minded immigrant attracting bastions from only a decade ago. 
 The Republican Party has the biggest incentive to appeal to these immigrant groups, but fails to do so.  

You can't be pro-business and entrepreneurship and at the same time hold harm against those same people, who also share those values, because of their country of origin.

We all fight our own battles no matter how insignificant... :)

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