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Bill USA

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Member since: Wed Mar 3, 2010, 04:25 PM
Number of posts: 6,436

About Me

Quotes I like: "Prediction is very difficult, especially concerning the future." "There are some things so serious that you have to laugh at them.” __ Niels Bohr Given his contribution to the establishment of quantum mechanics, I guess it's not surprising he had such a quirky of sense of humor. ......................."Deliberate misinterpretation and misrepresentation of another's position is a basic technique of (dis)information processing" __ I said that

Journal Archives

The CBO Whiffs on the Minimum Wage -Daily KOS

[font size="3"] "...as Baker emphasizes, "...we are not going to see 500,000 designated losers who are permanently unemployed as a result of this policy." Instead, what will happen is people will work 2% fewer hours at an hourly rate that is 39.3% higher." "[/font]



http://www.dailykos.com/story/2014/02/19/1278712/-The-CBO-Whiffs-on-the-Minimum-Wage
(emphasis my own)

The Congressional Budget Office has just issued a report on the minimum wage that is a real head-scratcher. Analyzing proposals to raise the minimum wage to $9.00 or $10.10 per hour, it concludes in the latter case that there would be 500,000 fewer jobs in the second half of 2016 than there would be under current law (100,000 fewer for $9.00/hr.).

~~
~~

There are two problems with these claims. First, the CBO's calculations undervalue the best research on the minimum wage. Second, even in the CBO's estimated world, low wage workers are much better off as a whole than under the current $7.25/hr. minimum wage.

As I've discussed before, a relatively crude cross-national comparison of rich countries' minimum wages and unemployment rates does nothing to suggest any job-killing is going on. But the CBO's estimation procedure has serious flaws. It begins (p. 6) with what it calls "conventional economic analysis," which is already a big mistake. Simple Econ 101 reasoning (when the price of something goes up, the quantity purchased goes down) has had only sketchy empirical support, something that has been especially clear from meta-analysis of minimum wage studies (ungated version of Doucouliagos and Stanley 2009 here).

[font size="3"]The CBO, of course, has heard of these studies, but it remains with a non-transparent explanation of how it weighted different studies (p. 22), saying it gave the most weight to contiguous state comparison studies. The only thing is, according to Arindajit Dube, these are the studies least likely to find a negative employment effect. Thus, how CBO ends up with a baseline of job loss remains mystifying.[/font]
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Study: A Minimum Wage Hike Would Stimulate The Economy

http://thinkprogress.org/economy/2013/07/08/2256851/study-a-minimum-wage-hike-would-stimulate-the-economy/#

A federal minimum wage increase would likely benefit the U.S. economy, a new Chicago Fed Letter suggests. Daniel Aaronson and Eric French, economists at the Federal Reserve Bank of Chicago, provided an estimate of the effects on aggregate household spending of the $9 minimum wage Obama proposed in his 2013 State of the Union Address.

The authors found that raising the wage by $1.75 would increase household spending by about $48 billion the following year, which amounts to .3 percent of GDP. If the possibility of job losses is taken into consideration, the authors calculate that spending would still go up by $28 billion, or .2 percent of GDP. However, most studies suggest minimum wage hikes do not result in job losses for various reasons.

Because minimum wage earners tend to be low-income and are likely to spend more of their income, raising their wages is particularly beneficial. As the authors explain, “In the near term, a minimum wage hike can stimulate economic activity by putting money into the hands of people who are especially likely to spend it.”

These findings run contrary to Republican opposition to a raise in the wage. Almost immediately after President Obama proposed an increase, Speaker of the House John Boehner (R-OH) rejected the idea, citing potential economic harms as his primary concern. Republican aversion to the minimum wage seems to have grown since then, as Lamar Alexander (R-TN) recently suggested the minimum wage should be abolished.
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CBO report says: There would be a net INCREASE in DEMAND even if there would be job losses...

...of course, if they did not properly calculate the change in demand from a 4.8% increase in prices (per yr, over two years) (see below) and a[font size="3"] 38% increase in buying power[/font] for some percentage of the 59% of the country's employed (1.6 million, of 75.3 million hourly employees, are paid the minimum wage, but CBO correctly indicated that increasing the wages of those at the minimum wage would lead to increases in others just above minimum wage to maintain the relative pay scale), the number of jobs lost could be zero or it may be a number of jobs GAINED depending on how buyers reacted to a given price increase (not specified by CBO) and given the 38% increase in buying power for some proportion of all hourly wage workers).

The CBO said in their report on Increasing the minimum wage that it would lead to job losses. but on Page 27 of their report they say there would be a net increase in demand - without mentioning how much increase in demand they calculated. Without knowing what they calculated for the increased demand nobody can evaluate whether the amount the calculated was appropriate.


http://cbo.gov/sites/default/files/cbofiles/attachments/44995-MinimumWage.pdf#page=31
(emphasis my own)
On balance, according to CBO’s analysis, raising the minimum wage would increase demand for goods and services because, taken together, the second, third, and fourth direct effects would shift income from business owners and consumers (as a whole) to low-wage workers. Low-wage workers generally spend a larger share of each dollar they receive than the average business owner or consumer does; thus, when a dollar from business owners or consumers is shifted to low-wage workers, overall spending increases. The increase in demand from that shifting of income would be larger than the decrease in demand from the reduced consumption of people who became jobless, CBO estimates.



and ....
http://cbo.gov/sites/default/files/cbofiles/attachments/44995-MinimumWage.pdf
(emphasis my own)
An increase in the minimum wage also affects the employment of low-wage workers in the short term through changes in the economywide demand for goods and services. A higher minimum wage shifts income from higher-wage consumers and business owners to low-wage workers. Because those low-wage workers tend to spend a larger fraction of their earnings, some firms see increased demand for their goods and services, boosting the employment of low-wage workers and higher-wage workers alike. That effect is larger when the economy is weaker, and it is larger in regions of the country where the economy is weaker.




So, there will be reduction in number of workers even though there is a net increase in demand. Hm-m-m-m.

The CBO indicated that the increased cost of increasing the minimum wage would be in part passed on to consumers but they didn't say how much of a price increase they thought would occur. How much the price increased is important as it directly affects the degree to which consumer spending is affected. If CBO calculated too much of a price increase that will reduce the net increase in total consumer demand the CBO said would occur. Of course, a bigger net increase in total demand would reduce the jobs lost figure or could ELIMINATE IT.

So how much would prices increase due to an increase in the Minimum wage? The CBO didn't show what they computed this would be.... even though that is a critical number in figuring the impact on demand.

[div name="demnd" id="demnd" class="excerpt"]
Calculating a change in prices given a 38% increase in minimum wage

Here's one approach....

Most minimum wage workers are in the leisure and hospitality sector.

http://www.bls.gov/cps/minwage2012.htm#1a
(emphasis my own)
The industry with the highest proportion of workers with hourly wages at or below the federal minimum wage was leisure and hospitality (about 19 percent). About half of all workers paid at or below the federal minimum wage were employed in this industry, the vast majority in restaurants and other food services. For many of these workers, tips and commissions supplement the hourly wages received.


McDonald's is a good company to use as a model for employers in the leisure and hospitality sector. To get an idea how much prices would be increased by a given change in wages cost, I checked out McDonald's Profit and Loss sheet and it shows that wages expenses represent about 25% of the total revenues (just looking at company operated restaurants). An increase of the Minimum wage from $7.20 to $10.00 is 38% increase in wages - (assuming most workers at McDonalds are making the minimum wage). So how much would prices have to be increased to cover a 38% increase in wages at McDonalds - about 10% (.25 x .38). If that price increase was spread over two years the annual increase necessary to cover the wage increase would be 4.8% - and that is without any absorption of the cost increase by the company - that is, maintaining the same profit rate!

Now, how much would sales fall off due to an increase of 4.8% - or about 19 cents on a $4.00 order?

And for the 10% increase in the prices you've given minimum wage workers a 38% increase in their buying power (number of minimum wage workers: 3.6 million or 4.7% of hourly workers) !

http://www.bls.gov/cps/minwage2012.htm#1a
In 2012, 75.3 million workers in the United States age 16 and over were paid at hourly rates, representing 59.0 percent of all wage and salary workers

Obamacare Hasn’t Put Americans Out of Work

http://nation.time.com/2013/10/22/obamacare-hasnt-put-americans-out-of-work/

New federal jobs report doesn't support claim that the Affordable Care Act will decrease full-time employment

(emphases my own)

One of the most-cited arguments made by opponents of Obamacare is that the law is bad for business. The Affordable Care Act requires that companies with more than 50 full-time workers provide health insurance and the law’s critics have faulted this provision for accelerating a trend of businesses scaling back hours and eliminating full-time jobs in favor of part-time positions. Writing in the Detroit News in September, Republican Rep. Mike Rogers said the health care law had caused an “unsettling trend of a permanent part-time workforce.” CNBC’s Maria Bartiromo said as recently as Sunday the health care law was transforming the U.S. into a “part-time employment country.”

The problem with this line of thought was that there wasn’t any good evidence to support it. And a new federal jobs report released Tuesday shows that Obamacare’s effect on employment is not what its critics have claimed.

After an uptick in part-time work earlier this year, which Republicans seized on to attack the law, the new jobs report shows that, for the second straight month, the number of part-time jobs reported by the Bureau of Labor Statistics fell. In September, 691,000 full-time jobs were added to the economy while 594,000 part-time jobs went away. The average workweek remained about 35 hours. Plus, as Ben Casselman points out in the Wall Street Journal, part-time employees were actually working more hours in recent months, and because of differences in the way the Bureau of Labor Statistics and the ACA define “part-time,” there’s no evidence the law has had any impact on part-time employment over the past year. Part-time employment nationwide is higher than before the recession started in 2008, but that trend began before Obamacare became law in 2010. In addition, the health care law’s requirement that employers provide health insurance to full-time workers, doesn’t even begin until 2015.

~~
~~

Writing in Business Insider in July, investment banker Daniel Alpert noted that the growth of part-time jobs has happened in sectors where most work is already part-time, as opposed to rising in sectors where it has traditionally been full-time. Alpert concluded:


[blockquote style="background:#DDFFDD;"]Anecdotal Obamacare-scare stories abound, but they seem pretty specious at best….There is no empirical evidence that hiring practices relate to concerns over benefits, and a heck of a lot of evidence that the people being hired for new jobs are earning less than workers already employed and that the jobs that a significant proportion of jobs being created are not full time because of the sectors they are in. If the Obamacare hiring meme were accurate, the tendency game the law would be to game the system by hiring people to work just under the 30 hour “full time” cut off under the act. But that does not appear to be the case either.

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Florida County Eliminates Minority-Heavy Polling Places

http://thinkprogress.org/justice/2014/02/11/3278101/florida-county-reduces-minority-precincts/

On a party-line vote, a Florida county’s Republican majority Board of County Commissioners voted Tuesday to eliminate almost one-third of Manatee County’s voting sites. The board accepted a proposal by Supervisor of Elections Mike Bennett (R) by a 6-1 vote to trim the number of precincts, despite unanimous public testimony against the move — and complaints by the lone Democratic Commissioner that it would eliminate half of the polling places in his heavily minority District 2.

Bennett, in his first term as elections supervisor, proposed reducing the number of Manatee County precincts from 99 to 69. Citing decreased Election Day turnout, as more voters switch to in-person early voting and vote-by-mail options, he told the commissioners that the move would save money and allow the county to offer more early voting sites in the future.

In the public comment section of the meeting, all ten speeches strongly opposed the move. Representatives of the local NAACP and Southern Christian Leadership Council warned that the cuts would decrease voter turnout because voters would have to travel further to a polling place, especially among the elderly and people without cars, and noted that the cuts disproportionately affected minority-heavy precincts. Bennett dismissed these concerns, noting that because District 2 had received “preferential treatment in the past,” even with the changes, his district will have the smallest number of voters per precinct. “It was overbalanced before, it’s overbalanced now.” Bennett also repeatedly noted that he had discussed the move with civil rights groups and both the Republican and “Democrat” Parties.

Bennett assured the commission that if lines are longer in 2014 as a result of these changes, he would ask them to revisit the decision in 2015, before the 2016 elections. But it is unclear whether voter accessibility is a sincere priority for him. In 2011, while serving in the Florida Senate, he endorsed making it hard to vote: “I wouldn’t have any problem making it harder. I would want them to vote as badly as I want to vote. I want the people of the state of Florida to want to vote as bad as that person in Africa who’s willing to walk 200 miles…This should not be easy.” He made that comment as he supported a voter suppression bill that reduced the number of days for early voting in Florida and helped create long lines across the state.

Money laundering, Koch style - Daily KOS - WaPo

http://www.dailykos.com/story/2014/01/06/1267656/-Money-laundering-Koch-style?detail=action
(image title on cursor over - my own)


[div class="excerpt" title="Through the GOP I'll own the Government. FUCK Democracy!" style="width:500px;"]



A few layers of the big ol' stinky onion that is the Koch brothers' political attack industry are peeled back in this massive report in The Washington Post. It details myriad "nonprofit" organizations set up and shuffled around within the Koch network to fund what has become an almost exclusively anti-Obamacare campaign, and to conceal where all that money is actually coming from:

[blockquote style="background:#FFDDDD;"]The resources and the breadth of the organization make it singular in American politics: an operation conducted outside the campaign finance system, employing an array of groups aimed at stopping what its financiers view as government overreach. Members of the coalition target different constituencies but together have mounted attacks on the new health-care law, federal spending and environmental regulations. [...]

Its funders remain largely unknown; the coalition was carefully constructed with extensive legal barriers to shield its donors.

But they have substantial firepower. Together, the 17 conservative groups that made up the network raised at least $407 million during the 2012 campaign, according to the analysis of tax returns by The Washington Post and the Center for Responsive Politics, a nonpartisan group that tracks money in politics.

A labyrinth of tax-exempt groups and limited-liability companies helps mask the sources of the money, much of which went to voter mobilization and television ads attacking President Obama and congressional Democrats, according to tax filings and campaign finance reports.

Why all the secrecy? To hear them, it's all about protecting the very lives of the hardworking patriots who have donated their millions to bring down a presidency. Because, you see, "Koch has been targeted repeatedly in the past by the Administration and its allies because of our real (or, in some cases, perceived) beliefs and activities concerning public policy and political issues." That targeting, Charles Koch himself says, is extreme: "We get death threats, threats to blow up our facilities, kill our people. We get Anonymous and other groups trying to crash our IT systems. [...] So long as we’re in a society like that, where the president attacks us and we get threats from people in Congress, and this is pushed out and becomes part of the culture—that we are evil, so we need to be destroyed, or killed—then why force people to disclose?" See, their donors must remain anonymous because President Obama has basically ordered his followers to kill them. Okay, then.

What the whole structure seems to amount to is a massive, massive right-wing welfare program for the core set of people who seem to run all of these organizations. They are spending an awful lot of money on advertising, too, but they're not getting an much of a bang for those bucks. President Obama is still in the White House. The Senate is still held by Democrats. Obamacare is the law of the land. Still, though, through the Republican House of Representatives that they've bought and a Senate skewed toward giving the minority a great deal of power, the Kochs do have inordinate amount of power to keep the government from functioning.



[font size="3"]Inside the $400-million political network backed by the Kochs[/font]
http://www.washingtonpost.com/politics/inside-the-koch-backed-political-donor-network/2014/01/05/94719296-7661-11e3-b1c5-739e63e9c9a7_graphic.html
In an analysis of 2011 and 2012 tax filings, The Washington Post and the Center for Responsive Politics found that a coalition of nonprofit groups backed by a donor network organized by the billionaire industrialists Charles and David Koch raised more than $400 million in the last election cycle. Much of the money was distributed to a maze of limited-liability companies affiliated with the nonprofits, which used some of their resources to turn out conservative voters and run ads against President Obama and congressional Democrats. Read related story.


What I would like to ask the CBO regarding changes in hours worked due to the ACA

The CBO Director has made a statement:

CBO: Guys, We Didn't Say Obamacare Would Cost 2.5 Million Jobs
http://www.democraticunderground.com/1014723823


THe CBO said in their report The Budget and Economic Outlook:

“CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor."


Clearly they didn't say jobs were going to be destroyed. But ....
[font size="3"]
What I would like to ask the CBO:

"Since you said [font color="red"]'the ACA will reduce the total number of hours worked'[/font], what did you figure the number of additional hours worked will be by people taking fewer hours off due to illness because they will be getting pro-active health care at doctor's offices? How many more hours did you figure will be worked by healthier people, Huh? And how much longer did you figure these healthier people will be able to work before they retire, huh?"

... just curious [/font]


http://www.today.com/money/fewer-americans-count-retiring-65-1B8186406

A larger chunk of Americans are working into their late 60s and even beyond, part of a long-term trend that has continued despite the tight job market of the past five years and is expected to increase in coming decades.

“It’s one of the most important changes in the labor force over the last generation,” said Richard Johnson, director of The Urban Institute’s Program on Retirement Policy.
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Columbia University Study: Fatal Car Crashes Involving Marijuana Have Tripled (since 1999) -

http://seattle.cbslocal.com/2014/02/04/study-fatal-car-crashes-involving-marijuana-have-tripled/

~~

“Currently, one of nine drivers involved in fatal crashes would test positive for marijuana,” Dr. Guohua Li, director of the Center for Injury Epidemiology and Prevention at Columbia, and co-author of the study told HealthDay News.

Researchers from Columbia University’s Mailman School of Public Health gathered data from six states – California, Hawaii, Illinois, New Hampshire, Rhode Island, and West Virginia – that perform toxicology tests on drivers involved in fatal car accidents. This data included over 23,500 drivers that died within one hour of a crash between 1999 and 2010.

~~
~~

The researchers found that drugs played an increasing role in fatal traffic accidents. Drugged driving accounted for more than 28 percent of traffic deaths in 2010, which is 16 percent more than it was in 1999.

The researchers also found that marijuana was the main drug involved in the increase. It contributed to 12 percent of fatal crashes, compared to only 4 percent in 1999.
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[font size="+1"] "Hey mannn, but they didn't know what hit'm.... yeah man..."


But dude, some of the people killed weren't high... or driving, or in the car...[/font]

Wasted: How America Is Losing Up to 40 Percent of Its Food from Farm to Fork to Landfill

Crosspost:

http://election.democraticunderground.com/101683845

"... [font size="3"]40 percent of food in the United States today goes uneaten. ... Moreover, almost all of that uneaten food ends up rotting in landfills where it accounts for almost [font size="4" color="red"]25 percent[/font] of U.S.[font color="#EE4433"] methane [/font]emissions. [/font]


... this is posted for those who have expressed concern about how our our crops are being used.

whoever woulda thunk it! Traditional post Christmas layoffs with historically bad weather in Jan-Feb

[font size="3"] While the Republicans have obstructed 4.2 million jobs, they can't take credit for a historically bad cold snap and mega snowfalls affecting 23 states nor the traditional post-Christmas lay-offs phenomenon.



Regardless of historically bad winter weather in January- February period, ADP expects jobs added in January to be 175,000. Since the [font color="red"] Republican Trickle Down Deregulation Disaster[/font] began the average net change for the month of January is [font color="red"] -44,000[/font] - jobs lost (which includes the loss of 794,000 jobs in January 2009, at the beginning of the Supply Side Surprise courtesy of the GOP (with special ignominy going to Alan "Mr. Magoo" Greenspan and Phil "Deregulator REX" Gramm - Dr. FrankenGramm's monster: the Commodities Futures Modernization act 2000)).





Dr. FrankenGramm's monster: the Commodities Futures Modernization Act - 2000


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In other words, three of the nation's largest financial institutions had made more bad bets than they could afford to pay off. Bear Stearns was sold to J.P. Morgan for pennies on the dollar, Lehman Brothers was allowed to go belly up, and AIG, considered too big to let fail, is on life support thanks to a $180 billion investment by U.S. taxpayers.

"It's legalized gambling. It was illegal gambling. And we made it legal gambling…with absolutely no regulatory controls. Zero, as far as I can tell," Dinallo says.

~~
~~

The vehicle for doing this was an obscure but critical piece of federal legislation called the Commodity Futures Modernization Act of 2000. And the bill was a big favorite of the financial industry it would eventually help destroy.

It not only removed derivatives and credit default swaps from the purview of federal oversight, on page 262 of the legislation, Congress pre-empted the states from enforcing existing gambling and bucket shop laws against Wall Street.

(MORE!)



Alan "Mr. Magoo" Greenspan
http://www.theguardian.com/business/2012/aug/06/financial-crisis-25-people-heart-meltdown



Greenspan's super-low interest rates and consistent opposition to regulation of the multitrillion-dollar derivatives market are now widely blamed for causing the credit crisis. Under Greenspan's tenure the derivatives market went from barely registering to a $500 trillion industry, despite billionaire investor Warren Buffett warning that they were "financial weapons of mass destruction".

His rock-bottom rates encouraged Americans to load up on debt to buy homes, even when they had no savings, no income and no job prospects.

These so-called sub-prime borrowers were the cannon fodder for the biggest boom-bust in US history. The housing collapse brought the global economy to its knees.

He was given an honorary knighthood in 2002 for his "contribution to global economic stability" [font color="blue"](in true Marx Brothers style comedy_Bill USA)[/font], but in 2008, at a Congressional hearing investigating the causes of the financial crisis, Greenspan finally admitted he "made a mistake in presuming" that financial firms could regulate themselves.
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[/font]
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