See here how Google gets its employees to make healthier eating choices without the heavy hand of force. Are you listening NYC Mayor Bloomberg?

Below is an except from a recent article in the NYTIMES on Google's corporate work structure, or lack of it.  This passage I found interesting (HT: Marginal Revolution for the prompt) because it employs behavioral economics to "nudge" people, of their own free will, to a desired outcome. 

"...In keeping with a company built on information, this seeming spontaneity is anything but. Everything has been researched and is backed by data. In one of the open kitchen areas, Dr. Welle pointed to an array of free food, snacks, candy and beverages. “The healthy choices are front-loaded,” he said. “We’re not trying to be mom and dad. Coercion doesn’t work. The choices are there. But we care about our employees’ health, and our research shows that if people cognitively engage with food, they make better choices.”

So the candy (M&Ms, plain and peanut; TCHO brand luxury chocolate bars, chewing gum, Life Savers) is in opaque ceramic jars that sport prominent nutritional labels. Healthier snacks (almonds, peanuts, dried kiwi and dried banana chips) are in transparent glass jars. In coolers, sodas are concealed behind translucent glass. A variety of waters and juices are immediately visible. “Our research shows that people consume 40 percent more water if that’s the first thing they see,” Dr. Welle said. (Note to Mayor Bloomberg: Perhaps New York City should hide supersize sodas rather than ban them.)..."---NYTIMES
 

Google is employing a technique called "Choice Architecture" as developed by Economists Cass Sunstein and Richard Thaler in their book "Nudge: Improving Decisions about Health, Wealth, and Happiness

Choice architecture describes the way in which decisions are influenced by how the choices are presented. It is in arranging the choice architecture in a certain way that individuals can be nudged in a certain way without taking away their freedom of choice. A simple example of a nudge would be placing healthy foods in a school cafeteria at eye level, while putting less healthy junk food in harder to reach places. Individuals are not prevented from eating whatever they want, but the arranging of the food choices in that way has the effect of decreasing consumption of junk food and increasing consumption of healthier foods.---Wikipedia

.Re-read the initial passage.  Recognize the concept?

There are ways to get people to do what you would like them to do without force, real or perceived.

This kind of thinking could help create better policies and more cooperation.

This is a GREAT example of how COOL Economics can be (is).  :)

Demand for gasoline is down and fuel efficiency is way up. Who gets the credit? See the answer here...

I may be suffering from a mild case of the "correlation is causation" fallacy, but the other day I posted the second graph you see below and suggested fuel efficiency was one of the factors in "demand destruction" of fuel consumption in the US. 

Today, I saw this graphic posted at Quartz that shows the change in fuel efficiency in Miles Per Gallon (MPG) change for cars and trucks over the last 35 years.  After a 20 year decline in efficiency from 1985 to 2005, efficiency shot up (yellow highlight).

Which auto manufacturers are leading the charge in making fuel efficient vehicles?  Scroll down, I will meet you there....

Source: Quartz

Surprised?  Probably not.  The first 7 out of the 11 listed are "foreign" manufacturers (not that there is anything wrong with that!).  They all have a significant manufacturing presence in the US, so it is all good.  :)

Update on Manufacturing to Employment Ratio. Production has recoverd with 1.5 million fewer workers. This defines the New Economy in a nutshell. See important graphs here.

Mark Perry at AEI has this first graph touting the recovery of manufacturing output to pre-recession levels.  He graphs the recovery in Durable Good Manufacturing (things designed to last 3 years and up) in RED and motor vehicles and parts in BLUE.



I wanted to see how this good new translated into employment in manufacturing.  Using the graph maker from the St Louis Federal Reserve, I duplicated only the Industrial Production: Durable Manufacturing line from the graph above (RED) and I added employment in that sector (both since 1992) in GREEN.

There is definitely a change in the output-to-employment ratio in US manufacturing, post-2000.  Output trends upward, as you can see going back to 1992, but employment trends DOWN dramatically after 2000 and never recovers fully even to post 2007 "Great Recession". 

So, output has recovered with about 1.5 million FEWER workers (eyeballing the tip of the GREEN line is about 7.5 million.  Pre-recession about 9 million were employed)

Nice graph that shows the leveling off of fuel consumption for the foreseable future in the US. How can this possibly happen?

Americans are using less fossil-based fuel than prior to the "Great Recession" and it looks like it is going to continue based on projections from the US Energy Information Agency (USEIA). 

Reasons I can think of off the top of my head:  Persistently high gas prices over the last few years have "nudged" people to trade up (down?) to more fuel efficient vehicles, baby boomers retiring and hence tend to consume less fuel, a trend in teenagers waiting until they are 18 to get drivers licenses AND they tend to drive less relative to teenagers in the past.

I want to include the idleness created by the recession as a reason for a decrease in consumption, which is certainly part of the equation, but that does not explain the projection that consumption will stay level for some time to come.  Surely the economy will recover and fuel consumption  will increase on a per person basis.

How would YOU explain the long(er) term trend in less consumption of various fuels ? (for planes, trains and automobiles et al)

Source: Fiscal Times

Personal Reflection: How come ALL teachers don't chapperone events at school? It is a mystery to me...

The popular Freakonomics blog has a posting today regarding the best way for schools to get teachers to chapperone dances/proms and such.

I was always perplexed as to why ALL teachers would not want to pull this duty, or any other duty where a large number of students congregate.  There is NO BETTER way for a teacher who is not a coach or sponsor of a major activity to get themselves known to a broad swath of students---the ones they teach and the ones they don't.

It pays dividends (not cash, but intangible benefits more valuable than money) in the classroom, in the hallway, recruiting for your classes, et cetera when students know who you are AND they KNOW you care enough to attend their events.

Opportunity Costs---give up a little time now and again and earn some "street cred" with students.  This should not be seen as an imposition but an investment.  I cannot count the number of potential negative encounters that have turned positive because of a little recognition and respect the student showed to me.

Plus, why would a teacher NOT want to see students in a controlled environment OUTSIDE of school?  You would be amazed at the postive things you can learn about them, if you observe.

Young teachers take heed.  The best advice I can give you is to attend, attend, attend, as many events as you are able. Not just sports but the all the other "minor"(minor  in scope, not in impact) activities.

 Your teaching experience will be so much better for it.

More evidence that the Federal Budget is about Health Care spending and not much else.

How times have changed regarding the Federal Budget.  In 1960, 50% of the Federal budget was allocated to National Defense. In the 2010 budget it accounted for 19%. 

Like squeezing a balloon, virtually all of the difference has been a movement from Defense to Federal spending on Health Care programs. 

Source: Color coded pie charts copied from AEI but from a study by the Philadelphia Federal Reserve

To put this in perspective I will adjust for inflation and put 1960 spending in terms of what that means in today's dollars.  I think that will be helpful in understanding the scope of issue

Defense spending in 1960 dollars was $53 Billion dollars (source HERE). Adjusting for inflation, that would be equivalent to $390 billion in today's dollars. Actual Defense spending in 2010 was $872 Billion---a 2.25 fold increase OVER inflation.

Health care spending in 1960 was $1.5 Billion dollars (source HERE). Adjusting for inflation, that would be equivalent to $11 Billion in today's dollars. Actual Federal spending on health care in 2010 was $846 Billion----a 77 fold increase OVER inflation. YIKES!! But hold on...

 Caveat:  The Federal program Medicare did not kick in until 1965-66 time period so spending in 1960 on health care might be considered low.  Let's use 1970 for Federal health care spending and use that as the base.

Health care spending in 1970 was $12.1 Billion dollars. Adjusting for inflation, that would be equivalent to $68 billion today. Given health care spending in 2010 was $846 billion that would be a 12.5 fold increase over inflation.

Defense spending in 1970 was $95 billion. In today's dollars that is equivalent to $534 billion, Given actual Defense spending in 2010 was $872 billion, that is a 1.6 fold increase over inflation.

To be more accurate and relevant, the economist who wrote this report probably should have used a post-Medicare implementation time period to use as a base.  Given the realities of the Baby Boom generation, that would have been more helpful.

Perspective--not Political...

Which V-P's wife do you think sleeps better at night?

The picture of Dick Cheney on the left comes from a t-shirt I bought on 6th Street in Austin, Texas. I saw the picture of VP Biden and could not resist putting the two together to make this meme.



See this graphic on "Big Bank" profits and how much of those profits are from Taxpayer Subsidies. Have a nice Sequestration Day. Meh!!

Bloomberg Online recently published this article and graphic showing "Big Banks" stated profits AND the amount of Federal Government subsidies (money transfers from Govt (Taxpayers!!) to private entities).  Those are the first two bubbles, respectively.

The tiny bubble to the left of the big bubbles represents the difference between the two.  In other words if you subtract the subsidies from the bank profits, you find that MOST of the profits were due to the subsidies.  To put it ANOTHER way, tax money accounted for virtually ALL the profits Big Bank earned.  Meh!

Crony Capitalism.  To make a baseball analogy, the banks listed below form a Farm System for appointees to high level Federal Govt positions--"the Big Leagues".  Unlike baseball, the ones who make it to the Big League of regulation and policy making NEVER forget the farm team. In fact, they are anxious to get back, once their tour of duty is over in D.C. 

Bloomberg Online

Terrific interactive resource on migration patterns for just about every country on earth. Great for a term paper, debate class or Model UN for background info.

Go HERE for the website.  Click on a country and see where people are migrating to and fro.  Nice resource for basic demographic research for a term paper, debate class or Model UN.

Source: Peoplemovin'

Nice graphic showing jobs losses and job gains in the last 4 years cross-referenced by wage level. Where did the Middle Class go??

Here is a nice summary of job losses and jobs gained since the advent of the Great Recession.

They are broken down into wage categories (High, Mid and Low) and by losses (dark blue bar) and gains (light blue bar).

High wage jobs are back to even. Mid-wage jobs have taken a beating.  Low wage jobs have come back with a vengeance.

Is this a textbook case of "hollowing out of the middle class"?

Source: Washington Post

My summary of the impending "Federal Budget Sequestration" in 9 sentences plus a "Have a good day!"!

The "Good News"---The actual amount that agencies need to cut THIS budget year amounts to approx $45Billion, about half the $85Billion we have heard so much about.  The $85Billion number we see bantied about includes cuts that can be delayed into future budget year(s).  I dont say this, the Congressional Budget Office says as much.  Such is the corrupt nature of Federal Budgeting/Accounting.

The "Bad News"---The cuts are "across the board"cuts.  In other words, ALL Federal Agencies affected (not all are) have to cut a few percentage points off ALL programs under their purview, regardless of the merits of the program. If one program is GREAT and very effective, then it has to cut the same percentage as a program that may be ineffective or redundant.  A more significant cut in one area cannot be made to subsidize no cut in another.  Such is the corrupt nature of the way the law was phrased.

Have a good day!!

Nice Graphic showing the results of a recent poll on Americans attitude about cutting Federal Govt spending in light of the upcoming mandatory budget cuts. Interesting results!!!

Here are the results of a very recent Pew Research Poll on Americans attitude toward cutting Federal Spending in light of the looming "sequester".

While not a perfect correlation, Americans want to cut spending on the things we spend the least amount on and want to increase spending on the things where we already spend the most.

The 4 major areas that consume a preponderance of the Federal budget (Social Security, Medicare and Healthcare (Medicaid) and Defense) and really overwhelm the other spending categories show the public has little stomach for reducing those programs.

Pretty amazing that 30% or more people want to increase spending in just about all the categories. 


Pew Research Poll February 2013

Nice map showing State by State comparison of Minimum Wages. Why does it vary from State to State? Find out why HERE.

I think there is some confusion regarding the way the minimum wage is set in the US.

The Federal Government, through the Federal Fair Labor Standards Act, sets a uniform minimum wage which applies to all 50 US States.   Currently that is $7.25 per hour. It is lower for some other classes of workers (see excerpts below the map for examples).

However, each individual State has the discretion to set it ABOVE the Federal mandate if they so desire.  This map shows a State by State comparison of the prevailing minimum wage.

There are LOTS of interesting exceptions to the minimum wage law.  Here is a link to the Dept of Labor FAQ page that explains these exceptions.

Source: MinimunWage.org

There are LOTS of interesting exceptions to the minimum wage law. Here is a link to the Dept of Labor FAQ page that explains these exceptions.

Here is the most common one I hear from students:

What is the minimum wage for workers who receive tips?
An employer may pay a tipped employee not less than $2.13 an hour in direct wages if that amount plus the tips received equal at least the federal minimum wage, the employee retains all tips and the employee customarily and regularly receives more than $30 a month in tips. If an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.
Some states have minimum wage laws specific to tipped employees. When an employee is subject to both the federal and state wage laws, the employee is entitled to the provisions of each law which provide the greater benefits.

What minimum wage exceptions apply to full-time students?
The Full-time Student Program is for full-time students employed in retail or service stores, agriculture, or colleges and universities. The employer that hires students can obtain a certificate from the Department of Labor which allows the student to be paid not less than 85% of the minimum wage. The certificate also limits the hours that the student may work to 8 hours in a day and no more than 20 hours a week when school is in session and 40 hours when school is out, and requires the employer to follow all child labor laws. Once students graduate or leave school for good, they must be paid $7.25 per hour effective July 24, 2009.

Must young workers be paid the minimum wage?
A minimum wage of $4.25 per hour applies to young workers under the age of 20 during their first 90 consecutive calendar days of employment with an employer, as long as their work does not displace other workers. After 90 consecutive days of employment or the employee reaches 20 years of age, whichever comes first, the employee must receive a minimum wage of $7.25 per hour effective July 24, 2009.

Other programs that allow for payment of less than the full federal minimum wage apply to workers with disabilities, full-time students, and student-learners employed pursuant to sub-minimum wage certificates. These programs are not limited to the employment of young workers.

Hans Rosling as a "Myth Buster" on the issue of Child Mortality Rates. Worth a couple of minutes of your time.

Here is Hans Rosling "clarifying" the issue of historical Child Mortality Rates around the world. 

This is really terrific!  Watch and Learn.  The world is getting BETTER in so many categories of quality of life. Yes, even for the most poorest amoung us.