Full-employment, Progressive Era style. Nice photo of bowling pin setters in 1910.

This photo accompanies a nice article on "The Rise and Fall of Professional Bowling". 

It was taken in 1910.   From Wikipedia, here is the description of it:

1:00 A.M. Pin boys working in Subway Bowling Alleys, 65 South St., B'klyn, N.Y. every night. 3 smaller boys were kept out of the photo by Boss. Location: New York--Brooklyn, New York (State) Hine, Lewis Wickes, 1874-1940, photographer. April, 1910

Child Labor in action.  Nice illustration for a history class.

I am 53 years old and I remember watching bowling on TV in the late 60's.  I was a big deal! But I missed its real heyday long prior to that (pre and post WWII).

If you are interested in the subject or just like reading about historical cultural niches that people have mostly forgot, then this may be for you.

Source: Priceonomics

See how the price and quantity sold of the simple i-Pod as changed over time since its introduction in 2003. The i-Pod is Dead, Long Live the i-Pod...

Ok, it is not really dead, but it is on its way to becoming an impulse buy in line at the grocery store.

The iPod will go down in history as a breakthrough technology that lead to the "i"-everything revolution in consumer electronics.

When it debuted in 2003 (yes a short 11 years ago) its introductory nominal price was $400.00 (see left scale, blue line. Using the BLS inflation calculator for overall changes in prices, in today's dollars that would be equivalent to $510.30.

Following the BLUE line you can see the price dropped rapidly as more units were sold (GOLD line using the Right Hand scale).

In 2006 the price stabilized at its longer term price floor of just over $150.00 regardless of the number of units sold (with some seasonal fluctuations). Those seem to coincide with the very high peaks that center on the Christmas shopping season. Pretty consistent, eh?

For an additional reference point, I put the price of an i-Pod today (estimated at $155.00) in 2003 dollars: $121.47.  That is a 70% reduction in price using 2003 prices ($121.47-$400.00 = -$278.53/$400.00). Or you could use 2014 prices.

During that time, the general level of all prices, as measured by the Consumer Price Index, increased 28%.

Wish we could innovate with the cost of gas and or electricity to this extent so our heating bills would be lower by 70%.  :)

Source: Twitter Tweet via Quartz

A survey suggests businesses won't reduce staff, maybe slow hiring of new workers BUT raise prices if the minimum wage goes to $10.10. Let me show you how this is possible.

The Wall Street Journal had this graphic based on a recent survey regarding business sentiment towards a potential increase in the Federal minimum wage to $10.10 per hour.

Sixty-one percent of businesses won't cut their existing workforce (Red means NO, Blue means YES), which is good. About 52% say they won't reduce hiring in the future. Not a ringing endorsement going forward, but we will take it. About 63% say they would raise prices.  THAT doesn't sound good.

So, good for low wage workers who have a job. This is easy to quantify. Not so good for low skilled workers not in the labor force now but may/will be in the future. Not so easy (impossible?) to quantify.  Not good for people who purchase goods/services produced from low wage/low skilled labor. This is VERY easy to quantify.

Source: Wall Street Journal

In AP Microeconomics we have a unit called "Factor Markets" in which we use a very simplified model to graphically illustrate the "Profit Maximizing Number of Workers" a firm will hire given the changing market conditions, such as it described in the graphic.  

According to what you will learn below (all the relevant info is embedded in the slides) the ONLY way the conditions above can be met (no cut in workforce and possible reduced hiring) is if PRICES INCREASE.

The highly competitive industries that employ lots of low wage/low skilled workers AND is dealing with a relatively slow economy, this seems very difficult.  

But I am going to go with it and show you how it is possible for everything to work out just as the graphic suggests.  

Let me know if you spot any mistakes in content. Constructive criticism always welcome.

Which is the most and least expensive city to attend an NBA game for you and 3 friends? For once, geography does not seem to matter. See interesting data here...

Here is an interesting survey of NBA (National Basketball Association) teams and how much it costs to attend a game.  Lots of interesting data on individual costs for various items, from tickets to parking.

This report compiled a "Fan Cost Index".  It shows how much a "basket" of items costs for you and 3 friends to attend a game in all the cities that have a franchise. I highlighted that in YELLOW and they are in descending order from most expensive to least.

Here is how the report characterizes the components of the Fan Cost Index (FCI):

The Fan Cost Index® comprises the prices of four (4) average-price season tickets, two (2) cheapest draft beers, four (4) cheapest soft drinks, four (4) regular-size hot dogs, parking for one (1) car, two (2) game programs and two (2) least-expensive, adult-size adjustable caps. Costs were determined by telephone calls with representatives of the teams, venues and concessionaires, along with information provided on the teams’ official Web site, or through outside sources. Identical questions were asked in all interviews.

Source: 2013 Team Marketing Report via PRICEONOMICS

Nice real time data and graphs to illustrate a Price Floor. A must know concept for the AP Microeconomics test!

Agricultural commodities are produced in technically what is called a “Perfectly Competitive” Market. .  

The prices are established in commodity exchanges, like the Chicago Mercantile Exchange (CME), based on world-wide demand and supply.  Farmers simply have to accept what is offered.  In economics, these producers  are termed “Price-Takers”.

Agricultural markets are relatively stable over time, but because of many endogenous and exogenous variables that can and do affect farming, prices fluctuate.  Sometimes the price is higher than normal, sometimes lower.

In order to smooth out this pricing volatility nations often employ various polices to make the price a farmer receives for their crop more predictable over time.  The Unitied States does this within the context of the US Farm Bill.

One such policy the government uses to aid farmers is called a “PRICE FLOOR”

Price Floors legally establish a MINIMUM PRICE that the Farmer will receive per bushel of crop harvested. 

If the market price falls below the Price Floor, the government makes up the difference so the farmer receives the pre-determined Price Floor price.  This is what is termed a "BINDING PRICE FLOOR". 

If the market price rises ABOVE the legal Price Floor then the farmer receives the market price and the Price Floor becomes irrelevant. This is termed a "NON-BINDING PRICE FLOOR".

Below is a series of graphs I made to illustrate both binding and non-binding price floors.  For labeling purposes, I used Soybeans BUT it could apply to any of the commodities.

Within the slides I inserted a graph that shows the ACTUAL price floors past, present and future for Soybeans, Corn and Wheat as established in the recently passed US Farm Bill.  I got this from HERE via Agricultural Reader.

This is a MUST know concept for the AP Microeconomics test! Hope it helps.

A grade earned in an introductory college course is a pretty good predictor as to whether someone is going to major in that subject. HOWEVER, men and women respond very differently to that grade. Nice graphic with an example here.

This graphic comes from a study by Harvard professor Claudia Goldin (click for an article by her on this topic).

It shows, by grade attained in an introductory economics class, which gender is more likely to continue on and major in Economics.

When BOTH men (blue bar) and women (red bar) receive an "A" in the class, women are slightly more likely to go on and major in the subject.  However, as the grade earned gets lower women flee the major at a much higher rate than men do.

In other words, men are undeterred by a lower grade in deciding to major in economics and women quickly have second thoughts and move on to something else.

Economics suffers from a deficit of females in the major similar to the STEM majors.

This excellent analysis HERE at the Washington Post goes deeper into the potential reasons.  I highly recommend it if you are interested in the issue.

Source: Washington Post

Not in my area of expertise but here is what I think happened to Malaysian Flight 370.

I want to go on record with my theory of what happened to Malaysian Flight 370.

I just saw a profile of the pilots on CNN.  The co-pilot is a young-ish man and has been photographed smoking AND carousing with ladies in the cockpit.

The plane seems to have exhibited a pattern of flying that is intentional (sharp turns and a gain/loss/gain/loss in elevation) and under the control of SOMEONE.

In a 777 flight simulator, CNN reporter Martin Savidge sitting in the co-pilot chair, easily turned off  the transponder beacon.  Could do it with little notice from the pilot. 

I think the co-pilot was under pressure (real or imagined) and in fear for his job/career as a result of "indiscretions".  He cracked, folded, went crazy, choose your descriptor.

Well, that is what I think at 6:07pm Eastern on March 14.  

TurboTax e-mails price increase threat without giving ANY details. Not cool, Turbo Tax, not cool...

Just received this e-mail a few minutes ago from TurboTax, which I use for doing my Federal and State tax returns.

The yellow highlight is mine.

If I don't finish my return by March 21st they are going to increase the price for their so-called "Valued Customers".

Checked their website and could not find any pricing information in regards to this specific e-mail.  The message itself does not provide a clue as to how much it will increase.

Bad marketing move, Turbo Tax, in the middle of tax season.  Why make this "threat" on your customers at this point?

Did I say bad marketing move yet?

Give me a break...

More evidence the Federal government is a book-keeper and not a doer.

Here is some isolated data from the just released 2015 Budget Outlook by the White House.

Once again I find myself staring at numbers that demonstrate the Federal Government has become more of an entity that writes checks ("Transfer Payments") to people and less of one that "does things".

Below you see blocks of decades and a high lighted portion that shows transfer payments as a percent of ALL Federal government outlays for that last year of the decade (it is NOT an average for the decade).

Less of the budget spent on transfers, more available for "fun stuff" like defense, roads, bridges, education, space program, etc ad infinitum...sort of.

In 1950 we could spend 68% of the budget on all those fun things.  In 2014 we have only 30% to spend.

I am not saying this is a good thing or a bad thing, but it IS a thing.

I think most people don't give this much consideration on either side of the political spectrum when debates about the Federal budget take place.  Did I say "debates"?  Oh, I meant shouting matches. My bad.

One observation.  I do not know what happened in the 1950's that almost doubled private transfer payments (before dipping again in the 60's) but if I had to guess I would say it was a result of the GI Bill and the various benefits conferred on WWII vets.

Anyone else have any idea(s)???

If you are a "salaried manager" making MORE than $455 per week but LESS than ??, you will want to read this. Your paycheck may be changing in the near future.

Today the Obama Administration will direct the Department of Labor to revise an important regulation on the payment for overtime as it pertains to workers classified as "managers/supervisors" who are paid a fixed salary instead of an hourly wage, regardless of the number of hours worked.

There is a VERY low threshold under the Department of Labor regulations that allows employers to classify someone as a manager. It can be as few as TWO workers that the manager manages or if they have some day to day control over functions of a business. See HERE for more on that.

Right now, a business is required to pay someone in a management position at least $455.00 per week in salary to avoid paying over-time.  The Department of Labor has some defined parameters for who is considered a manager HERE.

At this point, it is not known exactly what the Administration will propose as a new threshold BUT with a tiny bit of research it seems like there is a consensus that it will be around $650.

This means if you are now paid somewhere BETWEEN $455.00 and $650.00 (tentative!) for your management expertise, then your employer will have to consider ANY overtime hours you work and pay you accordingly for them OR they can bump you up to at least $650.00 per week.

Or they could decide you are not worth that much at that pay level and cut your position and consolidate your duties with a manager already making over $650.00 per week.  Ouch.

Implementation of this won't happen any time soon, though.  It has to go though regulatory approval.

I will provide more details when they are released.

A single mom with two kids will get a 39% pay increase if the minimum wage goes to $10.10, right? She will be the first one to tell you NO, not even close! See the numbers here.

Here is a table (I modified it a little) from The Economix that shows how an increase in the minimum wage from $7.25 to $10.10 per hour will affect different peoples NET INCOME. That is income after taxes are subtracted and benefits are added in.

Two things (at least 2) happen when your income increases: (1) the payroll taxes owed increases and (2) government benefits tend to decrease because they are "means tested". This means the amount a person receives depends on the level of income earned AND the benefit decreases as income increases.

I high-lighted the "Single Mother with Two Children" category because these families tend to have higher poverty rates than the other categories.  And we care about the poor, right?

The first table shows the minimum wage at its current level of $7.25. The wage earner would pay no income tax on that level of income, but pay $1,154 in mandatory payroll taxes (6.2% in Social Security and 1.45% in Medicare tax(es)).  They would receive tax credits (a "refundable tax credit") in the amounts of $5,460 and $1,812.  They would also be eligible for $2,898 in a food stamp (SNAP) benefit.

If you take the persons total income, subtract payroll taxes, then add in the tax credits and the SNAP benefit, their effective "take home pay" is $24,069.

Using this number we can calculate the "effective hourly wage rate" ($24,069/2,080 hours (40 hours per week times 52 weeks) or $11.57 per hour in wages/tax credits and benefits. Remember that number.

Source: Economix at The New York Times

But what happens to the single mother's effective wage rate when the minimum wage increases to $10.10 per hour (a 39% increase)?  Will here total compensation rise by that much?  See the 2nd table.

Wage income increases.  Payroll taxes increase (the more you earn, the more you pay).  Income tax at that level of income is still $0.  However, there are changes in the mix of tax credits and SNAP benefits. On net, those are LOWER than they were before.

When all totaled together NET INCOME is now $28,200.  Certainly higher than it was before, but how much higher? As much as the minimum wage increase, as I think most people would believe?

If we divide $28,200 by 2080 hours worked in a year we get an effective wage of $13.56.

If we compare the change AFTER we include all the relevant numbers we can see that the single mom with two kids is making $13.56 per hour instead of $11.57.

That is an increase of 17%.  Far cry from the 39% increase in the minimum wage.

So, when discussing the minimum wage and the magnitude of help it will give a single mother, we need to include more than the nominal increase in it.

It tells only half the story.  BUT a hardworking single mother will probably already be able to tell you that things are not always as they seem.

Nice graphic on how much it costs to manufacture US coins. Time for the penny AND Nickel to go???

The Washington Post has an excellent story and a few graphs on the cost of making money. Not earning money but the actual manufacture of currency and coinage.

Making a dollar bill is pretty profitable but making pennies and nickels is a money losing proposition.  

Isn't is really time to let the penny go and become a historical footnote?

The cost of the metal bares much of the blame for the increased production costs.

The graph below shows how much it costs to produce $1.00 worth of each bill and coin.

Made a graphic to show why Chipotle is concerned about the supply of avocados. Maybe we DO need to be worried after you see this.

I pieced together two maps (sources cited below) to show why the Chipotle restaurant chain has expressed some concern about its supply chain in regards to avocados.

California produces 86% of the avocado crop in the US. Roughly 390 million pounds.

Chipotle uses about 35 million pounds of Avocados per year, or 9% of the total crop by itself.

Any reduction in the crop due to drought loss would have a negative impact on the over-all supply.  Hence rationing by price would be the order of the day.

Might be a good time to get into the futures market for Avocados....IF there is one!?!?!

Drought Map from Washington Post.  The avocado map from Mission Avacado

All the nuts are in California. No, really, they are. Nice graphic on nut production (and veggies and fruits) in the Bay State.

This from Mother Jones via Big Agriculture.

I was very surprised by the percentages here.  I am guessing you might be as well.

They include a nice reference map of the drought areas so you can see how it may affect food stuff production, hence the price of food in the chain.

Why did the unemployment rate INCREASE in February when more jobs were created than expected? You know what they say about Statistics. See here the what for's...

Lately the pace of job creating has been tepid, to say the least, BUT the unemployment rate has been going DOWN.  How does that happen?

This month (Feb 2014) the number of jobs created has been far better than in past months BUT the unemployment went UP.  How does that happen?

Mostly has to do with the movement of people in and out of the labor force.

I pluck the following data from the latest Household Survey on Employment (Feb 2014).  I highlighted the "Civilian Labor Force" in yellow.  This shows the number of people employed and unemployed added together.

I highlighted in brownish the numbers for the past two months and for one year ago (Feb 2013).  Notice the Civilian Labor Force DECREASED on net last year.  From January 2013 to December 2013 there was a net DECLINE in the Labor Force of 51,000.  This will tend to LOWER the unemployment rate as people exit the labor force for various reasons (retirement, giving up looking for work).

So, a decrease in the unemployment rate in the short run can be a bad sign.

However, in February there was a BIG bump UP in the Labor Force by 264,000.  This will tend to INCREASE the unemployment rate as more people jump back in (or enter for the first time) to the Labor Force.

This can be a GOOD thing!  If people are more confident about job prospects then initially more people who were not looking for jobs are not looking.

So, an increase in the unemployment rate in the short run can be a positive sign.

Don't you just love economics and statistics?