Tuesday, February 26, 2013

It's time to make Chicago taxi passengers -- and drivers -- feel safer -- and more comfortable

Sexual assaults by taxi drivers may be extremely rare – 7,000 Chicago cabs taking only 30 passengers a day multiplies to over 76 million rides a year.  But female passengers want to feel safe – and taxi drivers want to actually be safe. 

I have hacked in New York City, Chicago and San Francisco.  The one safety feature that made me feel safe – the only one – was the on board/satellite camera in San Francisco.  It made you feel like someone is with you.

Partitions in Chicago are pointless because everyone leaves them open anyway.  They just deprive the passengers of heat in the winter, air conditioning in the summer, not to mention enough room for their feet.  Nobody wants them – except maybe management, which may not want to pay for cameras.

The large Crown Vics now going the way of the cavernous old Checkers may mark the perfect time to make the switch that should have been done a decade or more ago – to a security mode that can make passengers and drivers feel safer and more comfortable too.

Saturday, February 23, 2013

A hike to $15/hr in the federal minimum wage -- spread over 45 years -- would anyone have even noticed?

Could it plausibly
cause such a small economic hiccup, to more than double
the federal minimum wage, in just one, single year -- in, say, three quick jumps -- from $7.25/hr to $15/hr ... 

 ... 70 million workers (half our work force -- $15/hr being today's median wage) X average raise $8,000 (half the full $16,000 minimum wage jump) = a mere $560 billion increase in the cost of $15.6 trillion GDP output: yielding a piddling 3.6% direct inflation ...

 ... as to be barely noticeable

Now, imagine instead that starting from an even higher minimum wage (say, $10.50/hr -- just to pick a number out of a hat), we had spread the same raise to $15/hr over a whole 45 years (say, from 1968 to 2013 -- just to pick "arbitrary dates") -- and, that, per capita income grew 100% in the same 45 years to  further cushion the "shock" of 2% direct increase in GDP output costs (2% assuming the minimum wage would never sink back to, say, an "unthinkable" $8.00/hr by late 2007 -- or an "impossible" $5.75/hr in early 2007) ...

 ... would anyone have barely noticed a $30,000/yr minimum wage, today?

Wednesday, February 20, 2013

Hezbollah's strange Alchemy -- how Israel could take the wind out of its sails

I just read a book, "A Privilege to Die", which mapped out Hezbollah's strange alchemy which captures supporters into self-destructive modes of life (and death) most of all by returning their self-respect.

Move to a different scene: Scratch a supporter of Israel who calls critics "anti-Semitic" and you'll probably find a supporter of Israel who disparages Arab Spring ("they'll never be civilized") and despises Palestinians (ditto). Who do you guess spends their days consciously depriving Arabs of their self-respect -- and perpetuating the psychology of eternal war -- (most) Israeli Jews? 

Israeli Jews are not New York Jews. 1 1/2% of Israelis hail from the states. Western democratic attitudes are not extremely deeply rooted. The going attitude in Israel towards it's neighbors reminds me of the WWII Japanese attitude towards conquered peoples more than anything else.

If Israelis want peace they are first of all going to have to adopt more fully Western democratic postures towards their neighbors -- or should I just say a more (upper?) middle class (more adult?) outlook. What could it hurt?

Monday, February 18, 2013

American minimum wage might have been $20/hr with double-indexing!

If the minimum wage had gradually grown 50% from 1968 to present (from $10.50/hr to $15/hr) as per capita income grew 100% I don't think anyone should have objected strenuously to $15/hr today. In many economies the minimum wage is indexed to automatically grow in step with both inflation an increases in average income -- in which case the American minimum wage would be even higher than that ...

... depending on whose growth and income numbers you go by. The most commonly accepted inflation measure (CPI-U, used by the BLS) says the minimum was $10.50 in 1968. Another (sounds like CPI-U-RS, used only by the Census) say it was only $9.25/hr. Double-indexing (inflation and growth) would not give a much different overall index result however because when inflation registers lower, growth registers higher (because money is worth more) ...

... in which double-indexing case the American minimum wage would be closer to $20/hr.

Saturday, February 16, 2013

My comments on my "Open Letter" at Angry Bear

My day of commenting on my "Open Letter" at Angry Bear blog:


Denis Drew Feb 16, 2013, 12:01:00 PM  
HATE TO HOG BANDWIDTH (no I don't -- I hate to get blamed) but here is the first round of my smoke-and-mirrors attempt to get progressive economists to tell the real world (not argue arguments with non-progressive dupes which nobody witnesses -- empty stadiums) what it needs to know. BIG PROBLEM TO GET PAST -- THE ONLY PROBLEM -- MALES ARE SO SLAVED TO PACK HUNTING COOPERATION THEY CANNOT, WILL NOT EVEN THINK ABOUT ANY PRACTICAL NEW PATH IF NOBODY ELSE IS ALREADY ON IT. If the mayor of Oakland were male I wouldn't have bothered to try to get anything rolling.

Denis Drew Feb 16, 2013, 4:21:00 PM  
Allow me to use up more bandwidth with my own destroyed by the American labor market 30 years of taxi driving tragedy.

Between 1981 and 1997, Chicago allowed one 30 cent increase in the mile charge at which 1990 mid-point it started adding 40% more taxis, opening up livery unlimited, building trains to both airports and then, the shot in the head not the stick that broke the camel's back, free trollies between all the hot spots downtown.

I ended up 2000 miles away in San Francisco in a $600/month room to make a living. In San Francisco they are so liberal they treat you like you have a union even if you don't.

In New York in 1976 the last successful taxi strike raised the meter to $2.25/mile in 2004 dollars. By early 2004 the meter had dropped to $1.50/mile. Guys were going back to India for a better life. (An old Pakistani cab driver from nearby Evanston recently told me was going back to make a better living.)

The union was broken by moving to the (independent contractor) lease system. Under that system profit comes only after the company gets its money -- so the short meter hits the driver twice as hard.

Used to be a good job -- buy a house; put kids through college -- 60 hour weeks.

Just came from super market where new employees are paid less -- no longer a ticket to the middle class thanks to Wal-Mart underpaying its employees. Wal-Mart closed 88 big boxes in Germany because it could not survive paying the same as everyone else.

Think any of this registers at "Harvard"?

Wednesday, February 6, 2013

My open letter to Oakland Mayor Jean Quon -- the only law that can end violence

Open letter to Oakland mayor Jean Quan:
The only legislation that can realistically end gun violence in Oakland – and Chicago – is a labor law: doubling the minimum wage to $30,000/yr.  The Crips and the Bloods could not whip a decent paying Ronald McDonald

 Crackpot?  More than doubling the federal minimum wage from $7.25/hr to $15/hr ($600/wk) would cause less than 4% direct inflation:

$3.87/hr (half/average raise)  X  2080 hours (full work year) = $8,049/yr  X  70 million workers (half the workforce -- $15/hr is today’s median wage) = $563.4 billion.  (3.5 million workers at the minimum wage would get a full $16,020 raise may be left out to simplify eighth-grade math.)  Divide $563.4 billion by a $15.8 trillion GDP and we get 3.6% direct inflation (not counting leap frog pushups which may not add up to that much – LBJ’s median wage was only 25% higher than his minimum – high minimum wages often approach median level in other economies).  

Oakland won’t educate its way out of poverty and crime.  Catch 22: political scientist Martin Sanchez-Jankowski, from neighboring UC Berkeley -- who spent nine years in five poor New York and Los Angeles neighborhoods (and ten years before that researching street gangs) -- explains in his 2008 book Cracks in the Pavement that ghetto schools don't work mostly because students (and teachers!) don't expect anything decent awaiting for them in the labor market, so think it hopeless to make the effort.

In 1956 majority leader LBJ steered an $8.50/hr ($1/hr nominally) minimum wage bill through the US Senate.  In 1968 (hourly increments and retail workers added in years between) president LBJ piloted a minimum wage of $10.50/hr ($1.60/hr nominally) into law -- per capita income having expanded 25% in the dozen years intervening.

Per capita income has doubled in the two generations since 1968.

There would be a dismal gap even between a minimum wage of  $15/hr, or $30,000/yr and a reality-based minimum needs (poverty) level for a family of three – and even between a median wage 25% higher of $18.75/hr, or $37,500/yr. 

A realistic poverty line for a family of three is $45,476 in 2012 dollars according to the 2001 Ms. Foundation book Raise the Floor (table 3-2 on p.44 -- includes $8,786 medical insurance cost).  Raise totals up from a comprehensive list of expenses, including taxes to get its figure.  (Raise provides extensive explanations for its minimum needs parameters in Appendix B, citing Solutions for Progress -- allots $3,000 to yearly medical expenses even if the family has insurance.) 

$19,090, supposedly covers the minimum needs for a family of three under the 1955 era federal formula.  Both the Ms. and government formulas calculate about $6 per person/per day for food – the ancient federal methodology multiplies the cost of food three times and leaves it at that.  Which is why you won’t see the federal measure quoted much anywhere except as a formula multiple (2X, 3X, 4X).

A wage even 50% higher than today’s median, of $22.75/hr or  $45,000/yr, would barely support a family of three. 

"Since 1973 [note: the last year national income gains were shared across-the-board], productivity has grown roughly 80 percent while median hourly compensation improved by roughly 11 percent.”  Something more elemental than “raising the floor” needs to be prescribed. 

Anyone can work up a list ruses by which the average American’s interests are being hung out to dry these days.  I was just going to say the only thing not foisted upon us so far is foreign firms buying up local water rights and charging them back to us triple.

Then I remembered Chicago leasing its parking meter system for 75 years for $1.15 billion: 
Up the road from Oakland City Hall – up College Avenue – on the UC of Berkeley campus labors as progressive a progressive economics faculty as anyone should wish.  They could you tell you, Madam Mayor, and tell everyone else at the same time [this essay may hopefully edge them in the latter direction] about a species of labor legislation that can potentially re-write the American social contract front to back, economic to political.

Legislation that has been tried and tested over half a century in the first world (Germany, France) moving to the second and third worlds (Argentina, Indonesia) as well as right next door (French Canada).  Legislation bringing to Americans a labor market setup devised – not by Karl Marx – but by post WW II German and other continental industrialists – not to empower labor -- but to stifle union wage races-to-the-top that would divert money from industrial bases rebuilding.  (England did not take this path which is why it fell behind – which I’m pretty sure I read in Berkeley’s, Barry Eichengreen’s 2008 The European Economy Since 1945.)

Europe's fabled welfare state was offered as a compensation for labor price moderation. Magic bullet: legally mandated, sector-wide collective bargaining – wherein everyone working the same category of job (e.g., retail clerk) in the same geographic locale (where applicable) works under one common contract with all employers – thwarts the race-to-the-bottom just as surely – just the right barraging balance.

The late David Broder, dean of the Washington press corps, said that, when he came to D.C. 50 years ago, all the lobbyists were union – which meant: naturally balanced campaign financing, someone minding the store on the average person’s interests, all backed by the majority of voters -- perfect democracy.

Your friendly economics faculty up the avenue can tell you all about all of this – but you’ll have to ask.