Monthly Archives: December 2013

Obamacare’s Impact On Jobs

Job Market

First, I admit to acknowledging the noble intention of looking to insure more Americans.  I get that tug often.  When new employees straight out of college walk through our doors, I try and bring up the subject of insurance and 401ks.  Some listen – others don’t.

So I get it.

However, all the noble intentions in the world is not going to change the fact that people, in general, will tend to make decisions that maximize their best interests.

So when the government passes a law that requires employers to compensate employees in a certain manner – look for those employers to adjust their behavior.  Duke did just that – they looked at employers:

Durham, N.C. — Corporate financial chiefs say they expect to reduce hiring and also move more jobs to part-time status as a result of the Affordable Care Act, according to a new survey from Duke University and CFO Magazine.

Many companies also are considering a reduction in health care benefits for employees.

This is exactly the response that we’ve been predicting since the law was passed.

It’s not surprising.  Iin fact, what would be surprising is that someone was surprised:

“The results were startling to us. This will significantly impact employment,” said Campbell Harvey, a professor of finance at Duke’s Fuqua School of Business. “I think the people who drafted the bill probably never anticipated such a negative effect on employment, especially in a time when we really need employment growth.”

Okay, so Duke School of Business was surprised – but it would be hard to say that folks haven’t been warned.

How bad is it?

Almost half of the 500 companies surveyed are “reluctant” to hire full-time employees, the survey found, and one in 10 may lay off current employees in response to the law.

Some people could see their hours cut below 30 hours a week because the Affordable Care Act requires companies with 50 or more employees to provide health insurance to those working 30 hours or more a week or pay a penalty.

More than 40 percent of CFOs surveyed say their companies will consider switching some full-time jobs to part-time jobs in 2014.

“For the employee, often what that means is you have to get a second job, or you just take a hit in the amount of money you make. So, it is quite disruptive,” Harvey said.

The single best method to reduce costs, increase quality and expand availability is to expose the product to an ever free’er -yet maintaining contract laws- market.  Profit motive and self interests will prevail and the more expensive objects today will become commoditized tomorrow.

So really, the question shouldn’t be, “Do we want to provide health care to everyone?”  The question should be, “What costs are we going to expose our nation to in order to provide this coverage?”

Would you trade 43 hours a week for a 37 hour week for our nation?  Would you trade a single point of unemployment; go from 6.5 to 6.6 perhaps?

How many unemployed people would you be willing to accept in order to realize the gain of insurance for all?

Those are the questions that need to be answered.

Obama, Castro and Hanlon

Obama Castro

So, Obama shook hands with Castro at the Mandela funeral service.  A bunch of people seem to think that this is a big deal and is symbolic in some way.

While true that a sitting President should not shake hands with a communist dictator, I fail to get worked up over this turn of events.



1.  We know that Obama is a Marxist and resonates with the philosophy of the communist leader.

2.  Hanlon’s Razor:

Never attribute to malice that which is adequately explained by stupidity.

I am more convinced that Obama either didn’t know who he was shaking hands with or that his advance staff failed to tell him who he was.  Such an explanation is far more likely than Obama making a conscience statement with his actions.

Gender Gap Narrows


Hopefully this will make our friends on the left a little happier:

(Reuters) – General Motors Co said on Tuesday Chief Executive Officer Dan Akerson will step down next month and be replaced by global product development chief Mary Barra, who will become the first woman to lead a global automaker.

This makes 23 women CEOs in the Fortune 500 and 9 in the top 100.

Supply And Demand: Labor

Supply DemandThe minimum wage debate is heating up again.  On the Left, we have those that think the minimum wage needs to be raised.  Those of us on the right, disagree – we either think that the minimum wage is set just fine, or, if you are more honest, would like to see the concept abolished completely.

Sadly, the debate doesn’t come down to facts and science.  Rather, one side is using populist rhetoric while the other tries and tries to polish an unpopular message that setting a price floor results in surpluses.

Listen to the debates and you’ll hear what I’m talking about  Just this morning I was listening to The Diane Rehm Show and her panel was discussing the minimum wage.  The two supporters of the law invoked such constructs as “The minimum wage hasn’t kept pace with inflation” and “The purchasing power of the minimum wage is lower than it was 60 years ago”.

These things, while true, have nothing to do with the debate of whether or not a minimum wage is a good thing.

And it doesn’t end there.  I’ve heard the debate move into the fact that as the Holiday Season approaches, the republicans actually wanna end unemployment benefits just as people are trying to pay for heat in their apartments.  That as the gift giving intensifies, the republicans wanna take away the money that a growing number of people are dependent upon.

Again, tugs of populism that have nothing to do with the underlying facts of the minimum wage.

The above diagram is the Supply – Demand curve showing market equilibrium at point P and Q prime; where the two curves intersect.  Slide price up and demand is reduced while supply is increased.  And if that price happens to be above that market clearing price – you end up with a surplus of the commodity; in this case – labor.

This is undisputed.  There is no arguing this.

So, my conversation In Real Life are beginning to change when it comes to the minimum wage.  I’m beginning to point out that minimum wage jobs are NOT MEANT TO SUPPORT A FAMILY.  They are, in fact, meant to be transitory jobs that provide employers with inexpensive labor and provide laborers invaluable On The Job Training.

Looking further into the data suggests that less than 3% of wage earners make the minimum wage.  And of those, a decent number live in a household making the median income.

Another aspect of my conversations is this – and it’s critical – it MUST be acknowledged that both myself and my friend I’m debating admit that each of us is acting in manner that we think would benefit the marginal employee; the guy making the minimum wage.  Without such acknowledgement we are debating intention and not policy.  And when it comes to intention, I have no use for that brand of people who think that I want some people to have a worse life in order that I have a better one.

Liberal Arts and Stem


When I attended the University of Minnesota, I was enrolled in the Institute for Technology.  –That’s right, I attended MIT!–  The rest of the students, for the most part, were enrolled in the College of Liberal Arts or CLA.

It was high fun to openly mock our more leisurely peers often referring to them, in the most derogatory tone possible, as “CLA’ers.”  There was never any doubt, inside the Institute or out, that the rigorous courses were contained within that technology track.

It would seem that the same holds true – more or less – here in North Carolina.  I’m hanging out on the UNC campus while my daughter dances in the Raleigh Ballet’s production of “The Nutcracker” -she’s a Gingerbread-  and I’m reading the campus newspaper when I came across this:

Senior Lauren Schmidt originally entered college with the intention of becoming a pharmacist or physician assistant. Those plans changed after her experience in Chemistry 101 during her first semester at UNC.

“I spent hours working on Mastering Chemistry,” she said. “I’m not good at chemistry, and I’m OK with admitting that.”

Schmidt decided to drop the class after the first exam, and even though she completed Biology 101 the following semester, she started looking for a different major.

And Schmidt is not alone. Jennifer Krumper, a lecturer in the chemistry department, said a number of other aspiring pre-health students switch majors because of the difficulty in introductory science courses such as Biology 101, Chemistry 101 and Chemistry 102.

“Many students who are interested in science and have the abilities end up not majoring in science because they have a discouraging experience after their first year,” she said.

A somewhat sad, but not surprising commentary on the state of US education.  It would seem that kids are getting the message that the “goto” careers are within STEM fields, but that our kids either aren’t prepared or are simply too lazy.

A recent study by the U.S. Department of Education’s National Center for Education Statistics found that about half of the students in science, technology, engineering and mathematics fields leave their majors before they complete a bachelor’s degree.

Of the students who left these programs, about half switched to a non-STEM major, while the other half left school altogether.

Sad, really.  Especially as our economy is continually transitioning to a more and more technological one.

Certainly would be interesting to study the effects of this phenomenon as it pertains to income inequality.

How Much To Eat Healthy


Some time ago we discussed the cost of eating per month specifically as it pertains to food stamps:

We much more generous than the average as described by the democrats.In fact, an individual can earn up to $14,532 and still qualify for $200 a month.  To be sure, 14k a year isn’t much money at all; rent surely would take most of it.  But, 50 bucks is a bunch more than $31.50.  If I had an extra 20 to spend in my challenge I could almost certainly afford a twelve pack.

Where it gets really interesting, however, is at the 2 household range.  There a person can earn $19,680 a year and still qualify for $367.00 a month.  In fact, if approved, an individual could earn $30,000 and qualify for that amount.

As I mention in the post later on, “not the life of luxury”.

Now, what does it cost to go from a poor diet to a healthy diet?

If you want to eat a more healthful diet, you’re going to have to shell out more cash, right? (After all, Whole Foods didn’t get the nickname “Whole Paycheck” for nothing.)

But until recently, that widely held bit of conventional wisdom hadn’t really been assessed in a rigorous, systematic way, says , a cardiologist and epidemiologist at the Harvard School of Public Health.

So he and his colleagues decided to pore over 27 studies from 10 different developed countries that looked at the retail prices of food grouped by healthfulness. Across these countries, it turns out, the cost difference between eating a healthful and unhealthful diet was pretty much the same: about $1.50 per day. And that price gap held true when they focused their research just on U.S. food prices, the researchers found in their of these studies.

One dollar fifty American.

That’s less than $50 a month – the average amount played on the lottery.  And much MUCH less than the weekly food stamp challenge and certainly dramatically less than the amount allocated by the state currently.

The money line, pardon the pun?

“Just as an excuse to not eat healthy,” he says, “for most Americans, I think price is not an excuse.”


How Children Succeed

How Children Succeed

How Children Succeed

It seems that I have a stack of books that stretch forever high – forever.  And I never seem to get through them.  Worse, I start a book, get part way through and start another.  This habit results in me having 2-3-4 books in flight at all times.

That has to end, so maybe blogging my reading will enhance my completion rate as well as get me to finish the book I’m on before picking up a new one.

We’ll see.

Anyway, the first book to hit the blog is How Children Succeed.

I came across the book through a recommendation by Dr. Steve Green over at Fully Myelinated.  Steve mentioned that it was one of his favorite books on how kids achieve.  Further, Steve posts from a liberal perspective, so in the spirit of bi-partisanship, I felt that I owed it a college try.

All in all, not a bad read, though it did drag at points.

Anyway, here it is:

How Children Succeed – Introduction

The book is a look at how school children achieve in school.  I’ve been interested in this topic for quite awhile now.  I’m mostly interested in how we can increase reading, graduation and college completion, however, I think it’s important to study the why’s and the how’s.

In full disclosure, I’m highly influenced by the concept of IQ and the heritability of IQ.  While I’m sympathetic to the notion that IQ and IQ tests are, at best, imperfect measurements, the idea that there exists an “intelligence”, described by g, is a powerful one.

Further, I have read and am a firm believer in the research presented in “The Bell Curve”.

The book starts with the author researching a pre-school and identifying the fact that the school was using non-cognitive techniques to engage the kids.  And, as a new father, he was fascinated.  After all, all the rage in the research suggested that kids need to focus on cognitive techniques in order to maximize achievement later in life.

However, there may be a different way.  And at the center of that movement is Dr. James Heckman, an economist from the University of Chicago.  And the good doctor had studied the children of The Perry Preschool Project.  This is the project that demonstrated a preschool has  a positive impact on achievement but that benefit faded after only a few years.

However, when Dr. Heckman went deeper into the data he found that the benefits of that preschool manifest later in life:

At age 27 follow-up

  • Completed an average of almost 1 full year more of schooling (11.9 years vs. 11 years)
  • Spent an average of 1.3 fewer years in special education services — e.g., for mental, emotional, speech, or learning impairment (3.9 years vs. 5.2 years)
  • 44 percent higher high school graduation rate (66% vs. 45%)

Pregnancy outcomes for preschool group (versus control group):

At age 27 follow-up

  • Much lower proportion of out-of-wedlock births (57% vs. 83%)
  • Fewer teen pregnancies on average (0.6 pregnancies/woman vs. 1.2 pregnancies/woman)

Lifetime criminal activity for preschool group (versus control group):

At age 40 follow-up

  • 46 percent less likely to have served time in jail or prison (28% vs. 52%)
  • 33 percent lower arrest rate for violent crimes (32% vs. 48%)

Economic outcomes for preschool group (versus control group):

At age 40 follow-up

  • 42 percent higher median monthly income ($1,856 vs. $1,308)

  • 26 percent less likely to have received government assistance (e.g. welfare, food stamps) in the past ten years (59% vs. 80%)

Heckman discovered that while the preschool didn’t enhance IQ it DID manifest change in those kids.  And that change occurred in what Heckman would call non-cognitive skills:

  • Curiosity
  • Self-control
  • Social Fluidity
  • Many  others

This book is about those skills and how they help contribute to student achievement.


Public Records Law

Gene Nichol

Here in North Carolina we have a public records law:

 § 132-1.  “Public records” defined.

(a)        “Public record” or “public records” shall mean all documents, papers, letters, maps, books, photographs, films, sound recordings, magnetic or other tapes, electronic data-processing records, artifacts, or other documentary material, regardless of physical form or characteristics, made or received pursuant to law or ordinance in connection with the transaction of public business by any agency of North Carolina government or its subdivisions. Agency of North Carolina government or its subdivisions shall mean and include every public office, public officer or official (State or local, elected or appointed), institution, board, commission, bureau, council, department, authority or other unit of government of the State or of any county, unit, special district or other political subdivision of government.

(b)        The public records and public information compiled by the agencies of North Carolina government or its subdivisions are the property of the people. Therefore, it is the policy of this State that the people may obtain copies of their public records and public information free or at minimal cost unless otherwise specifically provided by law. As used herein, “minimal cost” shall mean the actual cost of reproducing the public record or public information.

In short, if you work for the state, your state “stuff” is free to be requested by the public.  It appears that some folks at The University of North Carolina are a titch upset:

A group of law professors at UNC-Chapel Hill is standing behind Gene Nichol, director of the school’s poverty center, after a conservative think tank requested the left-leaning professor’s emails, phone records and calendars.

Thirty law professors signed a letter questioning the motives of the Raleigh-based Civitas Institute, which promotes limited government and implementation of conservative policies. On Oct. 25, the institute used the state’s public records law to seek six weeks’ worth of Nichol’s email correspondence, his calendar entries, phone logs, text messages and a list of electronic devices issued to Nichol by the university.

“Surveilling a professor’s communications is a really troubling approach to protecting liberty,” the law professors wrote in a letter published Tuesday on the Chapel Hill News website and in the paper’s Wednesday print edition. “We deeply admire Gene Nichol’s commitment to protecting and speaking for the state’s poor and disempowered. The only comfort we take from this sorry request by Civitas is our confidence that it will increase his passion.”

Look, I have no idea why Civitas would request Nichols’ stuff, but they don’t have to explain themselves.  The good professor is an employee of the state, and the law says that people who are such employees are obligated to deliver their stuff when requested.

I think that a larger threat against our liberty is not that Government has to answer to the people, but that the people are somehow supposed to explain their desire to want that answer.